Getting Nearer To Budget 2025 And US Election

Market Review

Malaysia: In tandem with the performance of regional markets, the FBM KLCI (+0.33%) gained momentum led by PMETAL and SIME; the latter rose due to an uptrend in crude palm oil prices, which moved above the RM4,300 level. The Technology sector rebounded benefiting from the weakening bias of the ringgit.

Global markets: The Wall Street saw a pullback, pressured by rising Treasury yields as markets recalibrated expectations for further cuts from the Fed, while heightened geopolitical tensions in the Middle East kept traders on the sidelines. Meanwhile, both European and Asian stock markets ended on a positive note.

The Day Ahead

In line with the upward rally in regional markets, the FBM KLCI rebounded to close above the 1,630 level, while the FBM Small Cap stabilised after recent sell-offs. In the US, Wall Street began the week on a retracement, pressured by rising oil prices due to ongoing developments in the Middle East. Also, rising bond yields weighed on markets as expectations of a Fed rate cut faded after the non-farm payroll data came in above expectations. In the commodities market, Brent crude rallied above USD 81 amid ongoing tensions in the Middle East, which could threaten Persian Gulf oil supplies, while gold hovered just below USD 2,650. Crude palm oil traded nearer to RM4,400 ahead of the Diwali festive season.

Sector Focus: With stronger crude oil and CPO prices, we believe traders may focus on O&G and Plantation stocks in the near term. Besides, we expect mild accumulation in Technology stocks due to slightly weaker ringgit conditions, as the USD/MYR rebounded from RM4.11 to RM4.27 yesterday, but upside may be capped with weaker Wall Street performance. Traders are also likely to position themselves in sectors that may benefit from Budget 2025, such as Construction, Property, Building Materials, and Utilities.

FBMKLCI Technical Outlook

The FBM KLCI index closed higher towards the 1,635 level. The technical readings on the key index were negative, with the MACD histogram formed another negative bar, and the RSI trended below 50. The resistance is envisaged around 1,650-1,655, and the support is set at 1,615-1,620.

Company Brief

Aurora Mulia Sdn Bhd, a company linked to tycoon Tan Sri Syed Mokhtar Al-Bukhary, has exited Media Prima Bhd (MEDIA) after five years as the largest shareholder in the media group. Aurora Mulia sold its entire 31.9% stake in Media Prima, comprising 353.82m shares. The transaction price was not disclosed, but based on Media Prima’s closing price of 46.5 sen on Monday, the stake would have been valued at RM164.52m. The identity of the buyer is not immediately known. (The Edge)

HeiTech Padu Bhd (HTPADU) has terminated its agreement to acquire a 30% stake in Souqa Fintech Sdn Bhd, less than two weeks after entering into the share subscription agreement (SSA). HeiTech said its wholly owned subsidiary Synergy Grid Sdn Bhd had issued a notice of rescission “under clause 3.3 of the SSA”, rendering the agreement null and void with immediate effect. It did not provide details regarding clause 3.3 of the SSA. (The Edge)

Oil and gas services provider Uzma Bhd (UZMA) said its maiden 50MW LSS4 project located in Sungai Petani, Kedah has reached its commercial operation date on Sept 25. Uzma Kuala Muda Sdn Bhd, the group's indirect wholly owned subsidiary, received the Energy Commission's no-objection letter on Oct 4 followed by an acknowledgement from the Single Buyer on Oct 7. (The Edge)

Dayang Enterprise Holdings Bhd (DAYANG) has secured order awards from Petronas Carigali Sdn Bhd for six accommodation work boats. The contracts come with different charter durations of between 61 and 153 days for each vessel. The contracts involve four Dayang vessels and two vessels under its 64%-owned Perdana Petroleum Bhd (PERDANA), based on the list of vessels provided by Dayang. (The Edge)

Hibiscus Petroleum Bhd (HIBISCS) has completed the farm-in arrangement with Petronas Carigali Sdn Bhd to acquire a 30% participation interest in the PM327 production sharing contract. Its indirect wholly owned unit Straits Hibiscus Sdn Bhd has received regulatory approvals from the national oil firm Petroliam Nasional Bhd, through Malaysia Petroleum Management. (The Edge)

Sapura Resources Bhd (SAPRES) said its managing director Datuk Shahriman Shamsuddin has been placed on a leave of absence effective Sept 11, pending ongoing investigations, confirming a report in The Edge Malaysia weekly. The property and aviation company informed Bursa Malaysia that its chief corporate officer Mai Eliza Mior Mohamad Zubir has been appointed as the officer-in-charge to temporarily oversee the managing director's responsibilities. However, the company did not disclose the specific reasons for the investigation. (The Edge)

Dialog Group Bhd's (DIALOG) chief operating officer (COO) Mustaffa Kamal Abu Bakar has been promoted to chief executive officer, effective Monday. Mustaffa currently holds 3.11m shares in Dialog. Meanwhile, Dialog also appointed Keith Collins to take over the COO position from Mustaffa. The 63-year-old British citizen was previously the managing director of upstream oil and gas, and a member of the executive leadership team for Dialog. (The Edge)

Tuju Setia Bhd's (TJSETIA) joint venture (JV) company has secured a RM317.6m contract to build a new block at Gleneagles Hospital in Jalan Ampang. Tuju Setia– GPQ JV — an unincorporated JV between Tuju Setia's wholly owned unit Pembinaan Tuju Setia Sdn Bhd and GPQ Sdn Bhd, a unit of Terengganu Incorporated Sdn Bhd — was awarded the contract by Ampang 210 Sdn Bhd. The JV will undertake the design and construction of Block C of the hospital, with a project duration of 37 months, slated to begin this month. (The Edge)

Ramssol Group Bhd (RAMSSOL), a human capital management provider, has been appointed as the authorised business partner for sales and marketing activities for a Singapore-based company. Rams Solutions Sdn Bhd, the group's wholly owned subsidiary, signed an addendum agreement with Hono Asia Pte Ltd for such appointment. Under the updated arrangement, Rams will promote Hono's AI-driven human resources (HR) solutions, including the HR Generative AI Platform and HR Chat GPT, in Southeast Asian markets such as Malaysia, Singapore, Thailand, Indonesia, Vietnam, and the Philippines. (The Edge)

HE Group Bhd (HEGROUP), which debuted on the ACE Market in January, has proposed a special issue of 45.6m new shares or 9.39% of its enlarged share capital to meet its Bumiputera equity condition. Currently, slightly over 3% of HE Group’s equity stake, or 15.1m shares, are held by Bumiputera investors approved by the Ministry of Investment, Trade and Industry. (The Edge)

Source: Mplus Research - 8 Oct 2024