Market Review

The FBM KLCI ended Monday on a positive note at 1,597.5 (+0.5%), buoyed by strong performances in banking stocks. Investor attention remains focused on corporate earnings as the reporting season enters its final phase this week. Among the index constituents, all the banking counters ended in green and the overall positive performance were led by YTLPOWER (+5.5%), YTL (+4.5%) and HLBANK (+2.0%). Sector wise, Technology (+2.0%) was the best-performing sector especially with gains seen in technology index heavyweight counters such as INARI (+2.4%), VITROX (+6.9%) and GREATEC (+3.4%). The overall broader market breadth were quite balanced, with 540 losers matching 501 gainers.

Economics

Singapore: Core inflation at weakest pace in almost three years

Singapore's core inflation in October slowed to the weakest pace since December 2021, as healthcare and recreation price gains eased. The core measure, which excludes housing and private transportation costs, rose 2.1% last month from a year earlier, government data showed Monday. That's lower than the median estimate of 2.5% in a Bloomberg News survey. Headline inflation came in at 1.4%, the slowest pace since March 2021, the data showed. That was slower than the 1.8% median estimate in a Bloomberg News survey. The non-seasonally adjusted monthly measure fell 0.3%. (Bloomberg)

Malaysia: Malaysia-South Korea free trade agreement will be finalised next year

The Malaysia-Korea Free Trade Agreement (FTA) will be finalised next year, with both countries committed to speeding up any stalled negotiations. Prime Minister Datuk Seri Anwar Ibrahim said the agreement is expected to be signed during the return visit of South Korean President Yoon Suk Yeol to Malaysia. According to Anwar, who is on a three-day official visit to South Korea, the negotiations have been delayed since 2019 due to the political instability that hit Malaysia at the time, but the domestic business and political scenario now is better. Anwar also highlighted Malaysia's attractiveness as a trading country with a clear policy to increase the economic potential of the country and the Asean region as a whole. (Bernama)

EU: ECB policy should not remain restrictive for too long

There is still some way to go before eurozone inflation is sustainably back at 2% but European Central Bank (ECB) policy should not remain restrictive for t oo long, otherwise price growth could fall below target, Philip Lane, the bank's chief economist said in an interview. Eurozone inflation has fallen rapidly in recent months, and policymaker are now debating when they could declare victory and whether the current pace of rate cuts is still appropriate. "Monetary policy should not remain restrictive for too long," French newspaper Les Echos quoted Lane as saying on Monday. "Otherwise, the economy will not grow sufficiently and inflation will, I believe, fall below the target." (Reuters)

Malaysia: Short-term rates set to remain stable on BNM operations

Short-term rates are expected to remain stable on Monday on Bank Negara Malaysia's (BNM) operations to absorb surplus liquidity from the financial system. Liquidity is estimated at RM30.7bn in the conventional system and RM18.6bn in Islamic funds. On Monday, the central bank will conduct three reverse repo tenders comprising a RM2bn tender for seven days, a RM1.5bn tender for 31 days and RM1.2bn for 92 days. (Bernama)

US: Gold tumbles as traders mull Treasury pick and Fed outlook

Gold prices fell by up to 2.1% on Monday, despite weaker US dollar and bond yields, as traders digested the appointment of Scott Bessent as Treasury Secretary. The choice of Bessent, seen as stabilizing for the US economy, eased concerns over inflationary policies and reduced gold's appeal as a hedge against rising prices. Investors are now focused on upcoming US data, including the Federal Reserve's next rate decision, which may impact gold's performance as it has gained 30% this year amid geopolitical risks and central bank actions. (Bloomberg)

Companies

Infomina: Wins RM27.3m IT contracts from Land Bank of the Philippines

Infomina Bhd has bagged a three-year purchase order (PO) from the Philippines' state-owned banking group the Land Bank of the Philippines worth RM27.3m. The technology solutions provider said under the PO, its subsidiary, Infomina Philippines Inc will deliver technology application and infrastructure operations, maintenance, and support services to LandBank commencing from Nov 30, 2024 until Nov 30, 2027. (The Edge)

RHB: Exits Thai securities market with RM161.81m divestment to Phillip Brokerage

RHB Bank Bhd will be divesting its entire 99.95% stake in RHB Securities (Thailand) Public Company Ltd to Singapore-based stock brokerage firm Phillip Brokerage Pte Ltd for THB1,253.8m (RM161.8m), marking its exit from Thailand's stockbroking and securities market. The stake is currently held via its wholly owned RHB Investment Bank Bhd. The divestment is expected to be completed by the fourth quarter of 2024, subject to the approval of Thailand's Securities and Exchange Commission. The proposed disposal is not subject to the approval of the shareholders of RHB Bank or any relevant regulatory authority in Malaysia. (The Edge)

IJM: Announces RM283m deal to buy 50% stake in UK-based JRL

IJM Corporation Bhd said it is buying a 50% stake in UK-based construction firm JRL Group Holdings Ltd for £50m (RM283m) to expand into the UK and strengthen its core construction capabilities. In a media release, IJM Corp said the transaction involves its subscription to 50% of the enlarged equity interest in JRL. The fresh capital injected by IJM Corp will help strengthen JRL's balance sheet, enhance liquidity for working capital, and support future growth. (The Edge)

Radium Development: Buys 13-acre land in Cheras for RM458m

Radium Development Bhd said it is acquiring 13 acres of leasehold land in Cheras - which will be used for mixed development - for RM458m. The company is acquiring the land from Dupion Development Sdn Bhd in a related-party deal. Dupion Development is owned equally by Jakel Development Sdn Bhd and Platinum Victory (WM) Sdn Bhd, a firm controlled by Tan Sri Gan Yu Chai, who is the brother of Radium managing director Datuk Gary Gan Kah Siong. Yu Chai is also the managing director of Southern Score Builders Bhd. Radium said 70% or RM320.6m of the purchase price will be financed using bank borrowings and the remaining 30% or RM137.4m using internally generated funds. It added that its gearing level is expected to increase to 0.46 times from 0.05 times, as its total borrowings will rise to RM361m from RM40.5m. (The Edge)

Haily: Wins RM115m construction contract

Haily Group Bhd has accepted a letter of award (LoA) from Permas Jaya Sdn Bhd for the construction and completion for two phases of a residential project in Johor Baru, Johor, worth RM115.1m. In a filing with Bursa Malaysia, Haily said the project will primarily involve the development of double storey cluster houses, semi-detached as well as double storey bungalow houses. Haily said the contract is a "fixed lump sum contract" and shall not be subject to any fluctuation in costs. (The Star)

Key Asics: Signs RM10m ASIC design contract

Key Asic Bhd has secured a significant contract with R Company, worth over RM10m over three years. The agreement involves two main components: a non-recurring engineering (NRE) fee for intellectual property licensing and design services, and revenue from the mass production of semiconductor chips. (The Star)

Petronas Dagangan: Posts 81.4% profit surge in 3Q24

Petronas Dagangan Bhd (PetDag) is focusing on streamlining operations, improving efficiency, and expanding both its core and non-fuel segments. This includes leveraging Setel and enhancing Mesra's offerings for a better customer experience. Despite a slight dip in revenue, PetDag posted strong financial results for the third quarter of 2024 (3Q24), with a net profit surge of 81.4% to RM335.1m, driven by strong margins and higher volumes from retail motor gasoline and aviation sectors. For the first nine months of 2024, PetDag saw a 9.8% increase in net profit and a 5.4% rise in revenue. The company has declared an interim dividend of 24 sen per share. (The Star)

Privasia: Secures RM4.5m contract with Health Ministry

Privasia Technology Bhd's subsidiary, Privasia Sdn Bhd, has secured an RM4.5m contract from the Health Ministry. The contract involves providing ICT equipment and a laboratory information system (LIS) at Selayang Hospital, covering planning, design, supply, installation, and testing. The project spans 36 months, from Nov 22, 2024, to Nov 21, 2027. (The Star)

Affin Bank: Sees 27% stake traded at a discount in off-market deals valued at RM1.78bn

On Monday, 647.13m shares of Affin Bank, representing 26.96% of the company, were traded off-market for RM1.78bn, at a discount of 4.05% to 17% compared to the last closing price. The Sarawak state government, through its subsidiary SG Assetfin Holdings, is acquiring 634.7m shares from LTAT and Boustead Holdings, increasing its stake in Affin to 31.25%. Affin Bank reported a 45% rise in net profit to RM145.82m for Q3 FY2024, driven by higher net interest income, fee income, and writebacks of credit impairment losses. For the first nine months of 2024, Affin's net profit rose 3.3% to RM374.61m, with cumulative revenue of RM1.61bn. (The Edge)

Source: Mercury Securities Research - 26 Nov 2024