Previous Day Highlights

FBM KLCI closed lower amid the cautious sentiment as persistent selling pressure across the board. The benchmark index down 0.81% or 12.03 pts to close at 1,479.18. All of the sectors were negative with utilities (- 2.3%), construction (-2.1%), and energy (-1.2%) leading the losses. Market breadth was negative with 885 losers against 218 gainers. Total volume stood at 6.10bn shares valued at RM3.62bn.

Major regional indices trended mixed after China authorities expressed confidence at the World Economic Forum. HSI gained 0.75%, to end at 15,391.79. SHCOMP increased 0.43%, to close at 2,845.78. Nikkei 225 eased 0.03%, to finish at 35,466.17. STI slid 0.08%, to close at 3,139.78.

Wall Street closed higher, propelled by big tech stocks, following AI optimism revenue outlook from chipmakers. The DJIA added 0.54%, to end at 37,468.61. Nasdaq rose 1.35%, to close at 15,055.65. S&P500 gained 0.87%, to finish at 4,780.36.

News For The Day

Pantech’s 3Q profit drops 39% amid softer sales

Pantech Group Holdings’ 3QFY2/24 net profit dropped 38.98% YoY to RM21.15m from RM34.66m, mainly due to softer sales in both its trading and manufacturing divisions. Pantech recorded RM221.44m revenue for 3QFY24, down 26.17% YoY from RM299.94m. Pantech declared a 1.5 sen per share dividend for the quarter to be paid on March 26, bringing its year-to-date dividends to 4.5 sen per share. -The Edge Markets

EcoWorld unit buys Johor land for RM450.13m

A unit of Eco World Development Group, Eco Botanic 3 SB is acquiring land in Pulai, Johor from River Retreat SB for RM450.13m on which it will build affordable housing. This would be the second land acquisition in Iskandar Malaysia by the group in less than five months. In September 2023, the group had proposed to acquire 403.78 acres of industrial land also located in Kulai, Johor. – The Edge Markets

PA Resources bags RM1.1bn contract from First Solar

PA Resources has bagged an extension of supply agreement from First Solar, Inc, First Solar Malaysia SB and First Solar Vietnam Manufacturing Co Ltd to supply goods for production of photovoltaic modules. The total contract is valued at up to RM1.08bn (US$231.9m) for the contract period of Jan 2, 2024 till July 1, 2025 and may be renewed by US-based solar technology company First Solar for another one-year period. PA Resources said it has received the renewal of the master supply agreement from First Solar, which supersedes an earlier agreement signed in March 2022.-The Edge Markets

Magna Prima inks agreement for RM1.2bn project

Magna Prima’s wholly-owned subsidiary Twinicon (M) SB has inked a conditional development agreement with Golden Rainbow View SB to undertake a mixed development on five parcels of adjoining freehold land in Kuala Lumpur with a gross development value (GDV) of RM1.2bn. The project would comprise of commercial lots, "small office, home office” units, service apartments, office suites and a hotel. -The Star

FM Global Logistics eyes RM38m land acquisition in Klang

FM Global Logistics Holdings is buying two pieces of land totalling 5.68 acres in the Setia Alaman Industrial Park, Klang, from property developer Petaling Garden SB for RM37.86m, cash, or RM153 per sqft. FM Global’s wholly-owned unit FM Global Logistics (M) SB has signed a sale and purchase agreement with Petaling Garden to buy a 2.84-acre piece of land in the area for RM18.93m, marking its second acquisition after the one entered in December last year. -The Edge Market

Our Thoughts

Wall Street closed broadly firmer from bargain hunting activities despite a mixed corporate earnings result coupled with the lower weekly claims for unemployment benefits indicating that the labour market is still robust thus no reason for the Federal Reserve to lower interest rate as yet with the US 10-year yield inching higher to 4.142%. Over in Hong Kong, the HSI rebounded as the recent sell-down may have been overdone. On the domestic front, the FBM KLCI maintained its downtrend as it closed just below the 1,480 level. We deem the selling had been excessive as fundamentals were all largely intact. Nonetheless, overall sentiment may have been affected by MACC’s move to investigate some political heavyweights and hopefully a rebound is happening soon, hence we expect the index to hover within the 1,480-,1490 range today. Meanwhile, the bloodbath amongst a selected group of small caps may persist as the contagion is spreading which will impact overall trading participation of retailers over the immediate term.

Source: Rakuten Research - 19 Jan 2024

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