Previous Day Highlights

FBM KLCI closed lower amid the uncertain market undertone, in tandem with the weak performance across the region. The benchmark index was down 0.37% or 5.36 pts to close at 1,451.02. Majority of sectors were negative with industrial products & services (-1.0%), consumer (-1.0%), and technology (-0.6%) leading the losses; while gainer was seen in REIT (+0.1%). Market breadth was negative with 591 losers against 306 gainers. Total volume stood at 3.16bn shares valued at RM1.88bn.

Major regional indices trended negative as China woes over an economic slowdown continues to persist. HSI declined 1.09%, to end at 16,646.05. SHCOMP dropped 0.29%, to close at 3,022.91. Nikkei 225 eased 0.60%, to finish at 33,231.27. STI slid 0.20%, to close at 3,084.08.

Wall Street closed lower following the escalating conflict in the Middle East. The DJIA dipped 0.11%, to end at 36,2204.44 while Nasdaq fell 0.84%, to close at 14,185.49. S&P500 erased 0.54%, to finish at 4,569.78.

News For The Day

UMW to sell industrial land in Serendah to Perodua

UMW Holdings via its wholly-owned subsidiary UMW Development SB has proposed to dispose of a 22.22-acre industrial leasehold land within the UMW High Value Manufacturing Park in Serendah, Selangor to Perusahaan Otomobil Kedua SB (Perodua) in a related party transaction, for RM52.27m, cash. UMW owns a 38% stake in Perodua via another wholly-owned subsidiary, UMW Automotive SB. The group is expected to record a gain of RM6m from the disposal.- The Edge Markets

EITA bags RM56.3m substation rehabilitation job from TNB

EITA Resources said its subsidiary has secured a contract from Tenaga Nasional (TNB) to rehabilitate a main intake substation in Kedah for RM56.31m. EITA said its 60%-owned TransSystem Continental SB (TSC) received a letter of acceptance from TNB for the "rehabilitation of PMU 132/11kV Gurun (Rehab), Kedah”. EITA noted the contract shall be effective from end-November 2023 and span two years (730 days). -The Edge Markets

SCIB gets RM16.8m contract

Sarawak Consolidated Industries (SCIB) has accepted a letter of award and acceptance worth RM16.8m for substantial contract works from S & I Urban Designers SB. The contract involves the supply and delivery of precast components for the apron and taxiway of Projek Pembinaan Pangkalan Pasukan Gerakan Udara PDRM Sarawak. “This project is scheduled to run from Dec 5, 2023 through Oct 4, 2024.” -The Star

UmediC’s 1Q profit down 5% despite higher product demand

UmediC Group’s (UMC) 1QFY7/24 net profit fell 5.6% YoY to RM1.88m from RM2m, despite higher revenue, dragged by higher tax expense and faster rise in expenses. While quarterly revenue rose by 28.37% YoY to RM14.52m from RM11.31m supported by higher demand for medical devices and consumables, gross profit only rose by 21.77% YoY to RM4.66m from RM3.83m.- The Edge Markets

Opcom renamed Hextar Capital

Opcom Holdings has proposed to change its corporate name to Hextar Capital effective immediately. Notably, Hextar’s Group CEO Datuk Eddie Ong Choo Meng is its largest shareholder with a 31.74% direct stake in the fibre optic company. Opcom also made a spotlight recently in September this year after it acquired a 18.03% stake or 70m shares in ACE Market-listed Binasat Communications from the latter’s managing director Na Boon Aik for RM39.2m as part of its venture into the satellite telecommunications business. -The Edge Markets

Our Thoughts

Wall Street finished lower due to profit taking activities on big tech stocks. Moreover, concerns among investors about an escalation in the conflict between Israel and Hamas have the potential to disrupt the outlook for the Middle East, possibly causing crude oil prices to surge and leading to an increase in inflation. The DJIA eased 41 points or 0.11% while the Nasdaq fell 120 points or 0.84%. In Hong Kong, the HSI slumped 184 points of 1.1% due to regional weakness amid the high tension in the Middle East. On the home front, the FBM KLCI closed lower as investors exercised caution in response to the regional weakness. Despite this, we prefer to stay alert given the heightened global volatility although bargain hunting may prevail. Furthermore, the valuation of the benchmark index remains cheap as compared to its regional peers, hence we anticipate the FBM KLCI to stay in consolidation mode within the 1,445-1,455 range for today.

Source: Rakuten Research - 5 Dec 2023

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