Market Review

The FBM KLCI recovered earlier losses and closed higher today at 1,620.7 (+0.3%), driven by strong late buying activities that lifted the benchmark index to its intraday high. Market expectations suggest that Bank Negara’s Monetary Policy Committee (MPC) will maintain the Overnight Policy Rate (OPR) unchanged during its meeting tomorrow. Among the index constituents, MAXIS (+2.8%), SDG (+2.0%) and PPB (+1.7%) were among the top three outperformers. Sector-wise, the top- performing sectors were led by Health Care (+0.7%), Financial Services (+0.6%) and Plantation (+0.4%). Overall, the broader market breadth remained positive, with 512 gainers outnumbered 476 losers.

Economics

China: Services growth picks up more than expected after stimulus

China’s service activity expanded at the fastest pace since July, a private survey showed, a sign that consumer demand may be on the mend after Beijing’s recent barrage of stimulus measures to shore up growth. The Caixin China services purchasing managers’ index rose to 52 in October from 50.3 the previous month, according to a statement released by Caixin and S&P Global on Tuesday. The expansion exceeded a median forecast of 50.5 by economists in a Bloomberg survey. A reading above 50 suggests growth. “Supply and demand continued to grow as the market improved,” Wang Zhe, senior economist at Caixin Insight Group, said in a statement. “Businesses expressed confidence in macroeconomic conditions in the near term.” (Bloomberg)

US: Equity funds record biggest weekly outflow in five weeks

US equity funds saw substantial outflows in the week to Oct 30 as investors exercised caution ahead of Tuesday's presidential election and a Federal Reserve policy decision on Wednesday. According to LSEG data, investors divested a net US$5.8bn (RM25.5bn) worth of US equity funds during the week, the most since the seven days to Sept 25. Investors ditched US growth funds worth a net US$4.1bn in the largest weekly selloff since Oct 2. Value funds also saw US$2.2bn of net outflows. The industrial, gold and precious metals, and healthcare sectors suffered net outflows amounting to US$779m, US$392m and US$278m respectively. The consumer discretionary sector attracted US$478m worth of net inflows. (Reuters)

Malaysia: Islamic finance set to revitalise economy with three core principles

Islamic finance holds substantial potential to revitalise the economy through three core principles — Maqasid Shariah, innovation, and global integration, said Bank Negara Malaysia (BNM). BNM governor Datuk Seri Abdul Rasheed Ghaffour outlined these principles as embedding Maqasid Shariah in economic and sustainable reforms, advancing innovation for value-based solutions, and enhancing global integration for mutual development and shared prosperity. (Bernama)

EU: UK services sector lost steam in lead up to the budget, PMI shows

Britain's services sector lost momentum in the run-up to the new government's first budget in October, with business activity growing at the weakest rate in 11 months and the first fall in employment since December, a survey showed on Tuesday. The S&P Global UK Services Purchasing Managers Index stood at 52.0 last month from September's 52.4 — the slowest pace of increase since November 2023. October's reading was slightly higher than a preliminary estimate of 51.8. The composite PMI — which combines the services data with last week's downwardly revised manufacturing survey — also fell to an 11-month low, slipping to 51.8 from September's 52.6. (Reuters)

Companies

Smile-link, MCOM: To be suspended after failing to meet results deadline

Trading in the shares of Smile-Link Healthcare Global Bhd and MCOM Holdings Bhd will be suspended on Friday (Nov 8) due to the two LEAP Market companies' failure to submit their annual audited financial statements for the period ended June 30, 2024, said Bursa Malaysia Securities. Smile-Link and MCOM have also failed to submit their auditors' and directors' reports for the financial period within the stipulated time frame, Bursa Securities said in filings by the two companies. Trading in their shares from Friday at 9am until further notice, the exchange regulator said, adding that if the companies failed to submit the relevant statements within six months from the expiry of the timeframe, the exchange may commence delisting procedures against them. (The Edge)

IOI Corp: Allocates land in Johor for solar power plant

IOI Corp Bhd said on Tuesday that it allocated part of its aged plantation landbank in Johor to build a solar power plant in a move to venture into the renewable energy sector. The group did not disclose the land size, saying the project is still in its early stages. IOI Corp's total landbank in Johor spans 23,961ha, according to the group's latest annual report. IOI Corp managing director and CEO Datuk Lee Yeow Chor said the solar power project will be developed through a consortium comprising three or four partners. (The Edge)

TCS Group: Secures RM86m construction contract from Sime Darby Property

TCS Group Holdings Bhd has secured an RM86.4m contract from Sime Darby Property Bhd for the construction of 60 units of two-storey semi-detached factories at the Elmina Business Park in Sungai Buloh. The two-year contract will commence in December, said TCS, adding that it will fund the works via internally generated funds and borrowings. In a statement, TCS managing director Datuk Tee Chai Seng said this new job further supports the company's growth momentum, providing strong earnings visibility for the next two to three years. (The Edge)

Aneka Jaringan: Secures RM39m construction contract in Kuala Lumpur

Construction firm Aneka Jaringan Holdings Bhd has secured an RM39m contract to undertake earthwork, piling, pile caps and contiguous bored piling works in Jalan Pantai Sentral, Kuala Lumpur. The three-phase contract was awarded to its wholly-owned subsidiary, Aneka Jaringan Sdn Bhd, by GDP Architects Sdn Bhd on behalf of Murni Lapisan Sdn Bhd, the company said in its filing to Bursa Malaysia. The contract is set to commence on Nov 7, 2024, with completion expected by Mar 6, 2026, according to the bourse filing. (The Edge)

T7 Global: ExxonMobil awards T7 Global Pan-Malaysia offshore maintenance services contract

T7 Global Bhd has secured a contract from ExxonMobil Exploration and Production Malaysia Inc. for an enabling agreement for the provision of Pan-Malaysia offshore maintenance, construction, modification (MCM) and hook-up commissioning (HUC) services. The contract is for Package B2 — Guntong and awarded to its wholly-owned unit Tanjung Offshore Services Sdn Bhd, said the oil and gas service provider in a bourse filing. The contract is effective from Dec 1, 2024 for five years, with an optional extension of three years, followed by another two years. (The Edge)

Gagasan Nadi Cergas: Buys student hostel management concession for RM185m

Gagasan Nadi Cergas Bhd is acquiring Serata Ehsan Sdn Bhd and Seri Delima Anggun Sdn Bhd for RM185m to gain full ownership of Konsortium PAE Sepakat Sdn Bhd, which manages student hostel concessions at seven polytechnics. This acquisition aims to expand Gagasan Nadi’s portfolio from two to nine hostels and enhance profitability through economies of scale. Expected to be completed by Q3 2025, the acquisition will be financed through internal funds, sukuk, or bank borrowings and is anticipated to yield an annual return of around 7%. (The Edge)

Source: Mercury Securities Research - 6 Nov 2024