Previous Day Highlights

FBM KLCI closed lower in tandem with the negative performance of regional bourses. The benchmark index lost 0.54% or 7.89 points to end at 1,454.83. Losers were led by MISC, SIMEPLT and KLK. Market breadth was negative with 689 losers against 309 gainers. Total volume stood at 4.09bn shares valued at RM2.39bn.

Key regional markets ended mostly lower. Nikkei225 gained 0.30% to close at 33,036.76. HSI, SHCOMP and STI lost 2.06%, 0.71% and 0.37% to finish at 18,456.91, 3,154.37 and 3,226.83 respectively.

Wall Street was finished lower due to the escalation of crude oil prices triggering inflationary fears again. The DJIA lost 0.56% to end at 34,641.97. S&P500 and Nasdaq dipped 0.42% and 0.08% to close at 4,496.83 and 14,020.95 respectively.

News For The Day

CLMT to sell 3 Damansara office tower to Lagenda Properties

CapitaLand M Trust (CLMT) will see the disposal of 3 Damansara Office Tower, which it acquired in 2015, to Lagenda Properties for RM52m. The sale consideration is at a 4% premium to its valuation of RM50m at end-July, said CapitaLand M REIT Management SB (CMRM) in a statement. Net proceeds of RM50.5m from the sale will be used to repay borrowings, which will reduce CLMT’s gearing to 43.5%, from 44.1%, it added. The Edge Markets

Hextar Industries acquires Pacific Office for RM16.5m

Hextar Industries has proposed to acquire 100% equity interest in Pacific Office (M) SB, a distributor of office supplies for RM16.5m cash. Hextar, in a filing with Bursa Malaysia, said it entered into a conditional share sale agreement with the shareholders of Pacific Office for the proposed acquisition. The acquisition is expected to be completed in the fourth quarter of 2023.– The Edge Markets

No immediate price increase for PPB's consumer products

There are no immediate plans to increase prices of PPB Group’s consumer products amid the pricing volatility for commodities, said FFM CEO Jeremy Goon. He noted that the status quo on prices was due to the current weaker consumer sentiment as consumers were looking for more value-for-money products. FFM is 80% owned by PPB Group. The company is the largest flour miller in Malaysia and has interests in flour milling operations in Vietnam, Indonesia, Thailand and China. -The Star

Gamuda Land partners Engie Services

Gamuda Land SB, a wholly-owned subsidiary of Gamuda, has partnered Engie Services Malaysia to implement solar technologies, energy efficiency and sustainable transport solutions in the property developer's townships. The collaboration will include the development of rooftop solar installations and green transportation infrastructure for the townships of Gamuda Cove in Kuala Langat, Gamuda Gardens in Rawang, and twentyfive7 in Kota Kemuning, all in Selangor by 2024. – The Star

Hartalega sees glove demand recovery in 2H2024

Global demand for rubber gloves may only recover in the second half of next year at the earliest, said Hartalega Holdings, which is still bracing for industry-wide headwinds caused by an acute oversupply. According to its CEO Kuan Mun Leong, the utilisation rate of its production lines is currently hovering between the 40% and 50% level, given market demand for gloves remains “depressed”. The Edge Markets

Our Thoughts

Wall Street closed on a weak note as rising crude oil prices reignited inflationary concerns as both Saudi Arabia and Russia extended their voluntary cut in supply pushing the Brent crude to a year to date high at above the US$90/barrel. As a result, the DJI Average lost 196 points while the Nasdaq declined by 11 points as the US 10- year yield inched higher to 4.266%. In Hong Kong, the HSI slumped 390 points as confidence continues to be spooked by potential more Country Garden’s default despite having averted a portion of it earlier. Sentiment remains jittery as the Chinese property developer is faced with more debt maturities and traders are concerned that the stimulus package from Beijing may be insufficient to revive the sector. On the home front, the FBM KLCI was also affected by the regional weaknesses affected by the property scene in China. In view of the change in sentiment to cautious mode, we reckon the index to trend within the 1,450-1,460 range today as some bargain hunting activities may emerge. On a more positive note, we noticed volume traded on the local bourse remained elevated at above 4bn shares.

Source: Rakuten Research - 6 Sept 2023

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