Previous Day Highlights

FBM KLCI closed marginally lower due to profit-taking activities that emerged during the last trading hour. The benchmark index was down 0.08% or 1.11 pts to close at 1,464.56. Gainers were seen in telecommunications (+0.89%), construction (+0.50%), and technology (+0.46%); while losers were seen in health care (-1.45%), utilities (-0.66%), and transportation (-0.41%). Market breadth was mixed with 465 losers against 411 gainers while 491 remain unchanged. Total volume stood at 3.84bn shares valued at RM2.67bn.

Major regional indices trended mixed. HSI gained 0.66%, to end at 16,613.81. SHCOMP dropped 1.03%, to close at 2,902.11. Nikkei 225 was up 1.37%, to finish at 33,675.94. STI slid 0.28%, to close at 3,108.03.

Wall Street closed lower as investors took a breather after the multi-day rally driven by dovish signals from Federal Reserve. The DJIA dropped 1.27%, to end at 37,082.00. Nasdaq eased 1.50%, to close at 14,777.94. S&P500 slid 1.47%, to finish at 4,698.35.

News For The Day

Top Glove’s 1Q net loss narrows to RM57.71m

Top Glove Corp's net loss for 1QFY8/24 narrowed to RM57.71m from a net loss of RM157.62m YoY on the back of improved operational, quality and cost optimisation efforts. The world’s largest glove maker said revenue for the quarter dipped to RM493.56m from RM632.53m. Top Glove did not declare any dividend. Top Glove Corp is anticipating a return to the black as early as May next year, lifted by stronger demand for rubber gloves and rising prices, following the depletion of excess supplies built up globally since the pandemic. -The Edge Markets

Lower orders weigh on VS Industry’s 1QFY24 earnings

VS Industry’s 1QFY8/24 net profit fell 19.31% YoY to RM48.98m from RM60.71m due to lower orders from key customers in Malaysia, China and Indonesia, which affected the group’s overall utilisation rate of production capacity. Revenue for the quarter declined by 10.91% YoY to RM1.15bn from RM1.29bn. Despite the lower quarterly earnings, VS Industry declared a first interim dividend of 0.3 sen per share, payable on March 8, 2024.-The Edge Markets

Willowglen MSC bags RM10.28m contract

Willowglen MSC via its wholly-owned subsidiary Willowglen Services Pte Ltd has secured a RM10.28m contract from Singapore's PowerGas Ltd for the supply of pipeline and CCTV system renewal. The group said the contact commenced on Dec 19, 2023, and will be completed by March 18, 2026. -The Star

Teck Guan's 3Q net profit drops 84%

Teck Guan Perdana's 3QFY1/24 net profit slumped by 84% YoY to RM3.64m from RM22.54m, primarily due to a decrease in operating margin. Quarterly revenue decreased by 33% YoY to RM91.25m from RM136.24m, mainly attributed to a decrease in selling prices. The group did not declare any dividend for the quarter under review.-The Edge Markets

LKL International to sell land in Seri Kembangan for RM7m

LKL International through its wholly-owned subsidiary LKL Advance Metaltech SB (LKLAM), is selling a piece of freehold land in Seri Kembangan, Selangor, to 8 Food Avenue SB (Avenue) for RM6.9m. The group said that the net proceeds after deducting all fees and expenses related to the proposed disposal will be used for financing working capital and/or investments and utilised within 12 months from the completion of the transaction. -The Edge Markets

Our Thoughts

Santa took a breather as Wall Street closed lower following a solid performance in December so far. Traders locked in profits as the recent rise in equities may have been overdone. Therefore, the DJI Average lost 476 points while the Nasdaq declined by 225 points with the US 10-year yield easing to 3.853%. Meanwhile in Hong Kong, the HSI jumped 109 points buoyed by the positive cue from Wall Street overnight plus Alibaba’s gains after it announced the company appointed a new CEO to head its domestic e-commerce arm Taobao and Tmall. On the local front, late selling saw the FBM KLCI slip below the 1,465 level again having trended around the 1,470 level for most of the session. With 6 more trading days before saying goodbye to 2023, we remain confident that the benchmark index to trend higher amid the easing US 10-year yield to a 6-month low. As such, we expect the index experience some upside bias and hover within the 1,460-1,470 range today.

Source: Rakuten Research - 21 Dec 2023

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