Budget 2025 To Be Focused

Market Review

Malaysia: The FBM KLCI (-0.67%) ended lower after hitting an intraday high of around 1,661, as banking and transportation & logistics heavyweights dragged down sentiment on the local front despite the positive quantitative easing in China. Furthermore, profit-taking activities emerged ahead of Malaysia Budget 2025.

Global markets: The US Treasury and Wall Street gained, even as the Federal Reserve signalled a neutral stance for the November meeting, indicating it would be data- dependent moving forward. Meanwhile, European stock markets closed lower, while Asian stock markets rose, buoyed by China's ongoing quantitative easing.

The Day Ahead

Despite positive sentiment in China and Hong Kong, local stocks faced pressure, with selling interest building across the board. Meanwhile, in the US, the rally persisted as the Dow and S&P 500 reached new highs. Traders reacted to remarks from Jerome Powell, who indicated that if the economy evolves as expected, monetary policy would gradually shift towards a more neutral stance. The probability of a 25-basis-point rate cut by the FOMC in November jumped to 64%, up from 47% last Friday. Key upcoming events that traders will be closely monitoring include: ISM Manufacturing PMI, Non-farm payrolls, and Unemployment claims. In the commodities market, Brent crude oil traded below USD 72 as OPEC+ plans to increase oil production. Meanwhile, gold prices hovered near the USD 2,630 mark, and CPO prices, although retracing, remained above the significant RM,000 level.

Sector Focus: With China heading into the Golden Week holiday, we expect market activity to slowdown. As the USDMYR pair trades in the RM4.10–4.12/USD range, export-oriented sectors like Gloves and Technology may see limited upside, while domestic-driven Consumer stocks should benefit. Also, we favour the Construction, Property, Building Materials, and Utilities sectors in anticipation of catalysts such as the upcoming Budget 2025 and potential news surrounding the KL-SG HSR project.

FBMKLCI Technical Outlook

The FBM KLCI index closed lower towards the 1,648 level. Additionally, the technical readings on the key index were negative, with the MACD histogram turned into negative territory, and the RSI trended below 50. The resistance is envisaged around 1,663-1,668, and the support is set at 1,628-1,633.

Company Brief

Yinson Holdings Bhd’s (YINSON) net profit fell 11.74% to RM203m in 2QFY2025, from RM230m a year ago, on the back of lower revenue and as finance costs more than doubled. Quarterly revenue dropped 31.19% to RM2.14bn, from RM3.11bn, mainly due to lower contribution from its engineering, procurement, construction, installation and commissioning segment. The company declared an interim single- tier dividend of 1 sen per share, amounting to RM30m. (The Edge)

Cypark Resources Bhd (CYPARK) booked its third consecutive quarterly net loss in its 1QFY2025, dragged mainly by unscheduled downtime at its waste-to-energy plant in Negeri Sembilan. The group posted a net loss of RM18.07m in the quarter, from a net profit of RM305,000 in 1QFY2024. Revenue rose 36.4% to RM49.82m, from RM36.52m, mainly on stronger contributions from its construction and engineering segment. (The Edge)

Astro Malaysia Holdings Bhd (ASTRO) posted a net profit of RM54.71m in 2QFY2025, its best quarterly results since the quarter ended January 2023, on the back of lower expenses, and better finance costs on favourable foreign exchange impact. Quarterly net profit more than doubled y-o-y from RM23.65m despite a 5.98% decline in revenue to RM787.3m, from RM837.37m, due to lower subscription and advertising revenue. No dividend was declared for the quarter. (The Edge)

Dagang NeXchange Bhd (DNEX) is partnering with Singapore-based Google Asia Pacific Pte Ltd to provide sovereign cloud services in the country. DNeX signed a Google Cloud Partner Advantage commercial agreement with Google, authorising it to operate Google Distributed Cloud as a managed provider, with a focus on air- gapped configurations for organisations in Malaysia. The agreement allows the company to resell Google’s cloud solutions, including Google Cloud Platform (Public Cloud), Google Distributed Cloud — Edge (Connected), and Google Distributed Cloud — Air-gapped (Disconnected). (The Edge)

TCS Group Holdings Bhd (TCS) through its wholly owned subsidiary, TCS Construction Sdn Bhd has secured a contract worth RM116.58m from a subsidiary of S P Setia Bhd (SPSETIA), I&P Kota Bayuemas Sdn Bhd. The contract involves building and related infrastructure works for 561 units of affordable housing as part of the Setia Bayuemas project in Klang, Selangor. (The Edge)

Samaiden Group Bhd (SAMAIDEN) unit Samaiden Sdn Bhd has secured a two-year contract worth RM52m to build a 14MW LSS PV power plant in Sungai Petani, Kedah, in a related-party transaction from Legasi Green Power Sdn Bhd. The scope includes the design, supply, delivery, installation, testing and commissioning in connection with the project, and it shall be completed within 12 months. (The Edge)

Infrastructure and engineering company Jati Tinggi Group Bhd (JTGROUP) has secured a sub-contract worth RM50.87m for 132kV underground single circuit cable installation in Cyberjaya, Selangor. The contract was awarded to its wholly owned subsidiary, Jati Tinggi Holdings Sdn Bhd, by Worktime Engineering Sdn Bhd. The scope of work includes the supply and erection of power cables, fibre optic cables, jointing and termination, testing, commissioning and other ancillary activities. (The Edge)

Critical Holdings Bhd's (CHB) wholly owned subsidiary Critical M&E Engineering Sdn Bhd has been awarded an RM82m contract from a client it quoted as "multinational company headquartered in the US". The contract is to undertake mechanical and electrical-related fit-out, cleanroom and interior design works for a three-storey office building, and a one-storey production and warehouse at Pasir Gudang, Johor Bahru. (The Edge)

Kawan Food Bhd (KAWAN) is closing its manufacturing facility in China, due to the impact of US tariffs and limited room for expansion. The group, which produces food products like paratha, flatbread and pastries, operates two manufacturing plants — one in Pulau Indah and the other in China through wholly owned Kawan Food (Nantong) Co Ltd (KFN). The imposition of US tariffs on Chinese imports since 2018 had made it more competitive and efficient to export from the Pulau Indah factory. (The Edge)

Cape EMS Bhd (CEB) said its executive director Lim Chue Wan had resigned due to health reasons. Lim, 57, joined the Johor-based electronics manufacturing services provider's board as the director of corporate, finance, and accounts in 2020, before taking on the role of an executive director in March 2022. Lim had no family ties to any other directors or major shareholders. (The Edge)

Tenaga Nasional Bhd (TENAGA) has named former MMC Corp Bhd group CFO Badrulhisyam Fauzi as its new CFO with effect from Jan 1, 2025. He will replace Nazmi Othman, 60, whose employment contract will expire on Dec 31, 2024. Badrulhisyam, 44, who was also the covering CEO of MMC group member company Alam Flora Sdn Bhd, joined MMC group in 2011. (The Edge)

Property developer Plenitude Bhd (PLENITU) said its chief executive officer Lee Wee Kee has stepped down from his position effective immediately, due to personal reasons. Lee, who has extensive experience in property development and project management, was appointed as Plenitude CEO in February 2023. (The Edge)

RHB Bank Bhd (RHBBANK) has proposed the establishment of a note programme of up to RM10bn partly to refinance outstanding borrowings. The programme allows the bank to issue senior notes, tier-2 subordinated notes and/or additional tier-1 capital notes in multi-currency, including ringgit, from time to time. The bank has lodged the programme with the Securities Commission Malaysia on Monday. (The Edge)

AMMB Holdings Bhd (AmBank Group) (AMBANK) has granted financing facilities totalling RM115m to Senibong Cove Development Sdn Bhd and RM78m to JBB Builders (M) Sdn Bhd, the appointed contractors for the reclamation of 60.7 hectares of waterfront land in Senibong Cove, Johor Bahru. The project is an extension of the Senibong Cove masterplan and expansion of landbank, to provide more high-quality designed homes in curated communities. (The Edge)

Hong Leong Bank Bhd (HLBANK) has issued RM500m worth of green senior MTNs under its RM10bn multi-currency programme. The MTNs have a five-year tenure with a coupon rate of 3.8% per annum, payable semi-annually. The notes have been rated “AAA” by RAM Rating Services Bhd. (The Edge)

AME Elite Consortium Bhd (AME) is planning to establish a sukuk wakalah programme, with a total value of up to RM1.8bn. Its wholly owned subsidiary AME Capital Sdn Bhd submitted a proposal to the Securities Commission Malaysia for the establishment of an Islamic MTN programme valued at up to RM1.5bn, as well as a separate Islamic commercial papers programme of up to RM300m. (The Edge)

Datuk Seri Wong Sze Chien and Seah Ley Hong have emerged as substantial shareholders of property developer Magna Prima Bhd (MAGNA) through their private vehicle, Edxus Solutions Sdn Bhd. On Sept 27, Edxus Solutions acquired 95m shares or a 23.91% stake in Magna Prima via a direct business transaction, its filings with the stock exchange showed. However, the acquisition price was not disclosed. Following the acquisition, Edxus Solutions now holds 26.93% of Magna Prima, being the largest shareholder. (The Edge)

Source: Mplus Research - 1 Oct 2024