Market Review

The FBMKLCI closed relatively flat on Monday at 1,595.5 (+0.1%) as gains in plantati n c unters were offset by profit-taking activities in selected d x-linked fina cial service heavyweights. Am g the index constituents PMETAL (+6.5%) a d KLK (+3.4%) were the top gainers while the top decliners were led by RHBBANK (-3.0%) and YTL (-2.8%). Among the sector, the top three gainers were led by Plantation (+1.9%), T hnology (+1.1%) and Industrial P oducts & Services (+1.9%). The overall broader market br adth r maine negative, with 549 laggards outweighing 497 gainers.

Economics

Malaysia: Manufacturing saw eased production and new orders in November, while exports rose

In November, the Malaysian manufacturing sector experienced a slowdown as demand conditions remained subdued, according to a statement by S&P Global on Monday. The S&P Global Malaysia Manufacturing PMI dipped slightly to 49.2 in November, from 49.5 the month prior, signaling a marginal moderation in the sector's health. Despite the slowdown, the PMI data suggests that the final quarter of 2024 will likely continue to see gross domestic product (GDP) growth, although at a slower pace than previously observed. New orders, production, and stock levels all saw declines, while employment largely stagnated. (The Edge)

Japan: Stronger 3Q corporate capex points to solid domestic demand

Japanese corporate spending on plant and equipment rose 8.1% year-on-year in the third quarter, the country's Ministry of Finance data showed on Monday, signaling that solid domestic demand was underpinning the country's fragile economic recovery. The solid expenditure data, which will be used to calculate revised gross domestic product (GDP) figures due on Dec 9, could support the case for the central bank to raise interest rates further. Preliminary data last month showed Japan's economy expanded by an annualised 0.9% in the third quarter, slowing from the previous three months. The third-quarter capital spending figures compared with the previous quarter's 7.4% gain. It grew 1.7% on a seasonally adjusted quarterly basis. (Reuters)

China: Relentless bond rally pushes 10-year yield below 2%, lowest on record

China's 10-year yield dropped below 2% to hit its lowest point on record on Monday, breaking a psychological barrier as a sputtering economy and bets on further rate cuts drive investors into the safety of bonds. Prices in China's bond market have been on a decade-long rally - one that kicked into a higher gear roughly two years ago as the country's property sector woes and weakness in the stock market combined to prompt a flood of funds flowing into bank deposits and the debt market. A ban on offering preferential deposit rates on Friday was the latest signal that rates are staying low. (Reuters)

UK: Manufacturing PMI sinks to 9-month low as orders dry up

A gauge of British manufacturing activity released on Monday pointed to the sharpest contraction in nine months, as orders from domestic and foreign customers fell and ongoing supply chain disruption pushed up costs. The S&P Global manufacturing Purchasing Managers' Index sank to 48.0 in November from 49.9 in October - below an earlier estimate of 48.6 and the 50 level that divides growth from contraction. S&P cited headwinds from a 25bn pound ($32bn) rise in employment taxes in the new Labour government's Oct. 30 budget, a 7% increase in Britain's minimum wage, disruption to shipping in the Red Sea and the threat of global goods tariffs. (Reuters)

Companies

T7: Wins third Pan Malaysia contract with Package B3 from Jadestone Energy

T7 Global Bhd has won a contract from Jadestone Energy (M) Pte Ltd for the provision of Pan-Malaysia maintenance, construction, modification (MCM) and hook-up and commissioning (HUC) services for Package B3. The contract, won by T7's wholly owned unit Tanjung Offshore Services Sdn Bhd, commenced from Oct 17, and will last five years until Oct 16, 2029. It also has two extension options for three years and two years respectively. Jadestone operates four production sharing contracts offshore Peninsular Malaysia, of which two, PM323 and PM329, are producing. (The Edge)

SimeProp: Inks data-centre lease agreement worth up to RM5.6bn

Sime Darby Property Bhd said it has signed an agreement for a 20-year lease of data-centre facilities to Pearl Computing Malaysia Sdn Bhd for up to RM5.6bn, beginning as early as 2027. The property group is currently developing the additional data-centre facilities at its 77-acre site at Elmina Business Park - which it described as Klang Valley's largest freehold industrial business hub. "These facilities will be located in close proximity to Pearl Computing's first data centre, which is currently under construction and targeted for completion in early 2026," it said. (The Edge)

Yinson: JV to build new FSO vessel for charter by Murphy Oil unit in Vietnam

Yinson Holdings Bhd's 49%-owned joint venture with PetroVietnam Technical Service Corp (PTSC) has executed a provision, charter, operation and maintenance contract with a unit of Murphy Oil Corp, for a floating, storage and offloading (FSO) vessel in Vietnam. The 500,000 barrels of oil equivalent capacity FSO, to be built for operations from 4Q2026, will be chartered for a firm period of 10 years, Yinson said. The contract comes with options to extend for up to five years, it said. In total, the contract has a value of up to US$416m, it added. (The Edge)

Joe: Proposes share capital reduction to eliminate accumulated losses

Automotive batteries manufacturer Joe Holding Bhd has proposed a share capital reduction to wipe out RM80.4m of its accumulated losses. The group said the exercise will accurately reflect its financial position by eliminating the accumulated losses via the cancellation of its issued share capital, Joe Holding said in a bourse filing on Monday. Joe Holding had unaudited accumulated losses of RM79.8m as at Sept 30, 2024, and audited accumulated losses of RM112.0m as at March 31, 2024. (The Edge)

Willowglen: MSC bags RM79.2m contract from Singapore's Public Utilities Board

Willowglen MSC Bhd has clinched an RM79.2m contract from Singapore's Public Utilities Board (PUB). According to its bourse filing on Monday, the contract was awarded to its wholly owned subsidiary Willowglen Services Pte Ltd. It involves the supply, design, installation, and commissioning of supervisory control and data acquisition (SCADA) and telemetry systems, alongside construction and maintenance services. Set to commence on Dec 23, 2024 and conclude on June 22, 2032, this eight-year contract is expected to deliver steady revenue growth and strengthen Willowglen's financial position, contributing positively to earnings in 2025 to 2032. (The Edge)

Datasonic: Secures RM81.2m contract extensions from Home Ministry

Datasonic Group Bhd has clinched two contract extensions worth a combined RM81.2m from the Home Ministry. These contract extensions were awarded to its wholly-owned subsidiary Datasonic Technologies Sdn Bhd (DTSB), according to Datasonic's bourse filing on Monday. The first extension, valued at RM21.4m, inclusive of 8% sales and service tax (SST), covers comprehensive maintenance services for card personalisation centres at the National Registration Department (JPN). This 12-month extension, running from Dec 1, 2024, to Nov 30, 2025, includes hardware and software maintenance, personalisation solutions and technical support across JPN's headquarters and branches. This latest extension pushes the total contract value since 2021 to RM94m. (The Edge)

Persona Metro: Bags RM182m condo construction job in Cyberjaya

Construction and trading group Pesona Metro Holdings Bhd has secured an RM181.8m contract for the construction of two blocks of 28-storey condominiums in Cyberjaya. The developer of the project, comprising 606 units of condominiums on Persiaran Semarak Api in Cyber 11, is Lakefront Residence Sdn Bhd, a wholly-owned subsidiary of Avaland Bhd,said Pesona Metro in a bourse filing on Monday. The group said its wholly owned unit, Pesona Metro Sdn Bhd, accepted the Letter of Award from NRY Architects Sdn Bhd on Monday. The project has a duration of 40 months, commencing on Dec 16. Pesona Metro said the contract is expected to contribute positively to its earnings and enhance its net assets over the course of the project. (The Edge)

Majuperak: Names Rapid Bus' Muhammad Yazurin as its new CEO

Majuperak Holdings Bhd, a 51.4%-owned subsidiary of the Perak State Development Corp, announced on Monday the appointment of Muhammad Yazurin Sallij Muhammad Yasin as its new chief executive officer (CEO). Muhammad Yazurin, 49, will assume the role effective Jan 2, according to Majuperak's bourse filing. He succeeds Syed Agil Syed Hashim, who stepped down from the board after completing his two-year service contract. Muhammad Yazurin is currently the CEO of Rapid Bus Sdn Bhd, Malaysia's largest bus operator. Prior to this, he was involved in establishing the business development department of PLUS Expressways Bhd, which was then the largest listed toll expressway company. (The Edge)

Source: Mercury Securities Research - 3 Dec 2024