Previous Day Highlights

FBM KLCI closed higher despite the regional weakness. The benchmark index was up 0.19% or 2.83 pts to close at 1,465.28. Gainers were seen in health care (+3.21%), property (+1.02%), and telecommunications (+0.56%); while losers were seen in utilities (-1.40%), construction (- 0.36%), and energy (-0.35%). Market breadth was negative with 504 losers against 419 gainers. Total volume stood at 4.81bn shares valued at RM3.02bn.

Major regional indices trended negative as profit taking activities emerged following the recent rally. HSI declined 0.97%, to end at 16,629.23. SHCOMP dropped 0.40%, to close at 2,930.80. Nikkei 225 eased 0.64%, to finish at 32,758.98. STI slid 0.11%, to close at 3,113.23.

Wall Street closed higher, extending the rate-cut rally. The DJIA was flat to end at 37,306.02. Nasdaq rose 0.62%, to close at 14,905.19. S&P500 gained 0.45%, to finish at 4,740.56.

News For The Day

Sunway REIT acquires Penang property for RM66.8m

Sunway Real Estate Investment Trust’s (Sunway REIT) trustee RHB Trustees has inked a conditional sale and purchase agreement with Best Corridor Venture SB to acquire an industrial property in Prai, Penang for RM66.8m. Sunway REIT said the property is located on land spanning 4.21 hectares with leasehold tenure expiring on Oct 22, 2052, and to be extended to 60 years after the completion of the proposed acquisition. -The Star

UWC 1Q net profit drops 85% on lower revenue

UWC’s 1QFY7/24 net profit dropped 85.12% YoY to RM4.35m from RM29.25m due to lower revenue. Quarterly revenue declined 51% YoY to RM45.46m from RM92.12m which the group blamed on the impact of macroeconomic headwinds, especially the semiconductor market cyclical downturn. On a QoQ basis, the group’s net profit came in higher compared with RM1.94m in 4QFY23 as revenue climbed 13.73% from RM39.97m.-The Edge Markets

APB Resources buys 10% stake in Globetronics for RM140m

APB Resources is acquiring 70m shares in Globetronics Technology, representing a 10.41% stake in the Penang-based semiconductor manufacturer for RM140m cash. The consideration of RM140m or RM2 per share is a 16% premium to Globetronics' share price of RM1.73 at the time of writing. Upon the completion of the proposed acquisition, APB Resources will emerge as the second-largest shareholder in Globetronics. APB Resources said it was acquiring the shares from General Produce Agency SB (6.89%) and Ng Kweng Chong Holdings SB (3.52%), vehicles of the Ng family that founded Globetronics.-The Edge Markets

Scoop Capital buys out Apollo with RM238m cash

Keynote Capital SB, controlling shareholder of Apollo Food Holdings, is exiting the group after Scoop Capital SB, the franchisee of Baskin-Robbins, proposed to acquire Keynote's entire 51.31% stake in the confectionary maker for RM238.08m in cash. Scoop Capital is purchasing 41.05m Apollo shares from Keynote at RM5.80 per share, a 7.4% premium to the last closing price of RM5.40. While Scoop Capital is obliged to extend an unconditional mandatory takeover offer to acquire all the remaining 48.49% stake in the group at RM5.80 per share, it intends to maintain the listing status of Apollo on the Main Market of Bursa Malaysia. -The Edge Markets

Our Thoughts

Wall Street continued with its uptrend albeit at a slower pace as expectations may have hit the ceiling. Easing interest rates and economic growth continue to play their part although valuations may be the road bumps ahead. As such, the DJI Average closed flat while the Nasdaq jumped 91 points as the US 10-year yield climbed marginally to 3.935%. In Hong Kong, sentiment turned cautious as the HSI lost 163 points on concerns of China’s economic recovery. Meanwhile, Xpeng declined 6.7% following Alibaba’s intention to dispose of 25m of the EV maker US-listed shares. On the home front, the FBM KLCI made further progress to close at 1,465 or a 1-month high. We believe the flow of foreign funds to persist into the equity market thus expect the index to trend between the 1,460-1,470 range today. We noticed over the past 6 months, the 1,465 seems to be a strong resistance hence if this level is broken convincingly, we may see the index to possibly challenge the 1,500 level.

Source: Rakuten Research - 19 Dec 2023

To sign up for an account: http://bit.ly/40BNqKI

[Youtube Tutorial] Account Opening & Enable Foreign Equity: http://bit.ly/3I5Jzxo