Previous Day Highlights

FBM KLCI closed lower amid persistent selloffs, in line with the weak performance across the region. The benchmark index was down 0.18% or 2.66 pts to close at 1,491.21. Majority of sectors were negative with industrial products & services (-1.8%), energy (-1.0%), and technology (-0.9%) leading the losses; while gainers were seen in utilities (+1.0%), and telecommunications (+0.5%). Market breadth was negative with 832 losers against 265 gainers. Total volume stood at 5.23bn shares valued at RM3.17bn.

Major regional indices trended negatively as market sentiment turned cautious due to uncertainty regarding rate cuts and concerns about China's recovery. HSI plunged 3.71%, to end at 15,276.90. SHCOMP dropped 2.09%, to close at 2,833.62. Nikkei 225 eased 0.40%, to finish at 35,477.75. STI slid 1.34%, to close at 3,142.22.

Wall Street closed lower as Treasury yields rose. The DJIA dropped 0.25%, to end at 37,266.67. Nasdaq eased 0.59%, to close at 14,855.62. S&P500 slid 0.56%, to finish at 4,739.21.

News For The Day

Infomina’s 2Q net profit jumps 77%

Infomina’s 2QFY5/24 net profit jumped 77.23% YoY to RM8.95m from RM5.05m, fuelled by lower administrative expenses and higher revenue. Its quarterly revenue jumped 41.85% YoY to RM59.65m from RM42.05m, due to higher revenue recognised from the renewal of contracts under technology infrastructure operations.–The Edge Markets

Favelle Favco bags five contracts worth RM79.4m

Favelle Favco has secured five contracts, for the supply of cranes to machinery replacements, worth a combined RM79.4m. The contracts, which are expected to be delivered by mid- to end of 2024, were awarded to its subsidiaries Favelle Favco Cranes (M) SB, Favelle Favco Cranes Pty Ltd and Sedia Teguh SB between Nov 30, 2023 and Jan 17, 2024.The clients are Servizi Energia Italia SpA, Resolution Rigging Services Pty Ltd, E&P O&M Services SB, Petron Malaysia Refining & Marketing, and Petronas Carigali SB. -The Edge Markets

Pestech secures APM-related contract worth RM175.65m

Pestech International’s wholly-owned subsidiary company, Pestech Technology SB (PTech), has accepted a letter of award from Malaysia Airports (Sepang) SB for the Automated People Mover (APM) project and associated works at KL International Airport (KLIA), worth RM175.65m. The contract entails works for the design, supply, installation, testing, and commissioning, and was awarded to Alstom Transport Systems (M) SB. The project commenced on Jan 15, 2024, and is scheduled to be completed on March 31, 2025 or earlier. -The Star

Advancecon bags RM21.2m subcontract from CCC-ECRL

Advancecon Holdings’ 51% owned indirect subsidiary, Spring Energy SB (SESB) has secured a RM21.19m subcontract from China Communications Construction (ECRL) SB (CCC-ERL). Advancecon said SESB accepted the subcontract from CCC- ECRL for the construction and completion of subgrade works, Section 8. The subcontract will be completed on Dec 31, 2024 from the date of acceptance. -The Star

PowerChina and Semarak ink RM1.88bn green deal in Perak

PowerChina’s subsidiary China Hydropower (M) Co Ltd and Semarak Renewable Energy SB have signed a RM1.883bn deal involving a green hydrogen project in Perak. The project encompasses green hydrogen production and storage through floating photovoltaic power generation. The initiative involves the secondary development and utilisation of an abandoned tin ore lake. -The Edge Markets

Our Thoughts

Wall Street closed lower following a stronger than expected Retail Sales data for December indicating a resilient economy, putting any hopes of a lower intertest rates on hold for the time being. As a result, the US 10-year yield edged higher at 4.106% as both the DJI Average and Nasdaq lost 94 points and 89 points respectively. In Hong Kong, the HSI slumped 590 points to its lower level since November 2022 on worries over China’s 4Q 2023 economic growth that came in below consensus coupled with the decline in property prices. Back home, the FBM KLCI also weakened amid a broad sell-down amongst the regional markets. Nonetheless, the local benchmark index managed to close off its intra-day low due to some bargain hunting activities. For today, we believe the index to trend within the range of between 1,490- 1,500 range amid some downside bias over prevailing concerns of China and the US economic data. Meanwhile, recent steep declines amongst the small caps may also see retail participation to be affected. 

Source: Rakuten Research - 18 Jan 2024

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