Market Review

The FBM KLCI closed relatively flat at 1,671.3 (-0.1%) on profit-taking after previous strong gains. Among the index constituents, the top
gainers were HLFG (+3.6%) and NESTLE (+2.5%), while the top decliners were YTL (-3.4%) and SDG (-2.7%). In terms of sectors, the positive performance was led by Health Care (+1.1%) and Consumer Products & Services (+0.4%), while the negative performance was mainly
led by Energy (-1.7%) and Utilities (-1.2%). The overall broader market breadth was slightly negative, with 585 decliners against 525 gainers.

Economics

US: Second-quarter economic growth unrevised; GDI revised sharply higher

Gross domestic product increased at an unrevised 3.0% annualised rate last quarter, the Commerce Department's Bureau of Economic Analysis said in its third estimate of second-quarter GDP on Thursday. Growth in the first quarter was revised up to a 1.6% rate from the previously reported 1.4% pace. GDI increased at a 3.4% rate last quarter, revised up from the initially estimated 1.3% pace. (Reuters)

US: Weekly jobless claims unexpectedly fall

Initial claims for state unemployment benefits dropped 4,000 last week to a seasonally adjusted 218,000 for the week ended Sept 21, the Labor Department said on Thursday. A strike by about 30,000 machinists at Boeing, which has forced the aerospace company to announce temporary furloughs of tens of thousands of employees, including what it said was "a large number of US-based executives, managers and employees" could boost claims in the weeks ahead. The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased 13,000 to a seasonally adjusted 1.8m during the week ending Sept 14, the claims report showed. (Reuters)

Malaysia: Eyeing joint task force with Laos to boost energy sector

Malaysia is planning to establish a task force with Laos to strengthen cooperation in developing the energy sector of both countries, said Deputy Prime Minister Datuk Seri Fadillah Yusof. Fadillah said the task force would examine various aspects of cooperation, including efforts to increase the power supply from Laos to Malaysia and exploring investment opportunities for Malaysian industry players in Laos' energy generation sector. Meanwhile, Fadillah said that the Lao-Thailand-Malaysia-Singapore Power Integration Project (LTMS-PIP) has entered Phase Two (2024-2026), with Malaysia supplying up to 100 megawatts (MW) of electricity to Singapore. He also emphasised the LTMS-PIP's reciprocity aspect, where the participating countries can mutually support each other when facing power shortage. (Bernama)

China: Mulling US$142b capital injection into top banks, Bloomberg reports

China is considering injecting up to one trillion yuan (US$142bn or RM588.6bn) of capital into its biggest state banks to increase their capacity to support the struggling economy, according to people familiar with the matter. The funding will mainly come from the issuance of new special sovereign bonds, said the people, asking not to be identified discussing a private matter. The details have yet to be finalised and are subject to change, the people added. (Bloomberg)

Malaysia: Producer price index down to 0.3% y-o-y in August

Growth in Malaysia’s producer price index (PPI), which measures price changes at the producer level, eased to 0.3% year-on-year (y-o-y) in August, compared with 1.3% in the previous month, according to the Department of Statistics Malaysia (DOSM). In a statement on Thursday, chief statistician Datuk Seri Dr Mohd Uzir Mahidin said this was the lowest growth rate recorded since February, mainly due to lower primary commodity prices. On a monthly basis, he said local PPI production declined by 0.9% in August (July: -0.2%), driven by a 6.8% drop in the mining sector (July: +0.7%), affected by both extraction of natural gas (-9.1%) and crude petroleum (-6.1%). (Bernama)

Malaysia: Launches policy to transform fossil fuel industries, boost green growth in manufacturing

The government is seeking to lift the sector’s contribution to gross domestic product from its current baseline of 24% but via more “sustainable pathways”, according to Investment, Trade and Industry Minister Tengku Datuk Seri Abdul Aziz. He did not provide a target. “This is opportune forum to launch the circular economic policy framework, which aims to reformulate fossil-fuel-based industrial models and catalyse green growth practices across the manufacturing value chain,” he said in his speech at a petrochemical conference. The framework also aims to ensure the sector reduces its carbon dioxide (The Edge)

Companies

Gamuda: Plans one-for-one bonus issue, posts higher 4Q net profit

Gamuda Bhd proposed a one-for-one bonus issue, involving an issuance of up to RM3bn bonus shares. In a filing with the stock exchange, the group said the bonus shares will be issued as fully paid, at no consideration and without capitalisation of the group’s reserves. Separately, Gamuda reported an 8.2% increase in net profit to RM272.5m for the fourth quarter ended July 31, 2024 (4QFY2024) against RM251.8m in the same quarter a year ago. Quarterly revenue expanded 38.7% to RM4.7bn from RM3.4bn previously. The group did not declare any dividends for the quarter under review.

In a filing with the stock exchange, Gamuda said its overseas construction revenue tripled to an all-time high of RM9bn for FY2024 from RM3.5bn. Its construction order book hit another record high for the third consecutive year at RM25bn as the construction division posted record-breaking revenue and earnings of RM11bn and RM501m respectively, contributing 72% of group revenue and 55% of group earnings. The property division also delivered a robust revenue growth of 47%. Annual overseas revenue currently contributes 75% of overall group revenue. Property sales surged to an all-time high for the third consecutive year at RM5bn. The property division posted record-breaking revenue and earnings of RM4.2bn and RM411m respectively, accounting for 28% of group revenue and 45% of group earnings.

Commenting on the outlook, Gamuda expects its next year’s performance will be largely driven by overseas and domestic construction activities, including the construction of several data centres and higher contribution from the property division’s various QTPs. (The Edge)

Capital A: Fernandes: AirAsia to charge mandatory carbon fees from January 2025

AirAsia Bhd is planning to introduce mandatory carbon fees on air travel across all AirAsia operations starting January 2025, said its chief executive officer Tan Sri Tony Fernandes. Fernandes said the group is in the process of seeking approval from all the authorities in the country where it is operating including Thailand, Indonesia, Philippines and Cambodia. “We will do it in January next year because I don't want to just do it in Malaysia. We are trying to get all the approvals from the ASEAN governments [to impose the carbon fees],” Fernandes told reporters on Thursday. (The Edge)

Censof: Bags RM5.4m Perkeso contract for accounting system maintenance

Censof Holdings Bhd has secured an RM5.4m contract from Pertubuhan Keselamatan Sosial (Perkeso) to provide maintenance services for an accounting system. The three-year contract will run from February 1, 2025, to January 31, 2028, with no option for extension or renewal (The Edge)

Citaglobal: Secures RM47.6m road construction project in Terengganu

Citaglobal Bhd has secured an RM47.6m road construction project in Terengganu. It includes a range of tasks such as earthworks, pavement construction, drainage works, road furniture and geotechnical works, Citaglobal told the stock exchange on Thursday. According to Citaglobal, construction for the project is set to commence on Oct 7, 2024, with an anticipated completion date within 12 months. (The Edge)

Yenher: Acquiring RM18.6m feedmill equipment to boost animal feed production

Yenher Holdings Bhd is purchasing a fish mill and pet food and silos (machinery), for US$4.4m (RM18.6m), cash. The acquisition is aimed at supporting Yenher’s venture into the downstream feedmill business while expanding its product offerings. The equipment will be supplied by Famsun Co Ltd, a Chinese firm that is involved in the manufacturing of special equipment for feed, agricultural and sideline foods. The purchase consideration will be funded by internally generated funds and/or bank borrowings, said Yenher. (The Edge)

Source: Mercury Securities Research - 27 Sep 2024