Previous Day Highlights

FBM KLCI closed higher to end at its intra-day high amidst some bargain hunting activities following the recent sell down. The benchmark index was up 0.49% or 7.19 pts to close at 1,486.37. Leading the gainers were construction (+1.7%), health care (+1.4%), and technology (+1.3%); Market breadth was positive with 639 gainers against 359 losers. Total volume stood at 5.39bn shares valued at RM2.73bn.

Major regional indices trended mixed following the robust labour market data in the US and uncertainty regarding interest rate prospects. HSI declined 0.54%, to end at 15,308.69. SHCOMP dropped 0.47%, to close at 2,832.28. Nikkei 225 up 1.40%, to finish at 35,963.27. STI rose 0.40%, to close at 3,152.29.

Wall Street soared, reaching its record high since January 2022, driven by the big tech rally. The DJIA added 1.05%, to end at 37,863.80. Nasdaq rose 1.70%, to close at 15,310.97. S&P500 gained 1.23%, to finish at 4,839.81.

News For The Day

CIMB Thai’s FY23 net profit drops

CIMB Thai PCL, a 94.83%-owned indirect subsidiary of CIMB Group Holdings, saw its FY12/23 net profit drop 44.9% YoY to 1.6bn baht (RM210m from 2.91bn baht. The lower net profit was due to higher operating expenses, which increased by 9.96% YoY to 8.63bn baht from 7.85bn, coupled with a 48.5% YoY jump in expected credit losses from 2.09bn baht to 3.11bn baht. Its net interest margin over earning assets stood at 2.6% in 2023, compared to 2.7% in 2022, arising from higher cost of funds. -The Edge Markets

LB Aluminium buys industrial land in Beranang for RM30.41m

LB Aluminium has proposed to acquire a parcel of freehold industrial land with buildings in Beranang, Selangor for RM30.41m cash. LB said it entered into a sale and purchase agreement with Puspajaya Realty SB for the proposed acquisition. LB said the property is a parcel of freehold industrial land erected with two units of single-storey detached factories and a single-storey office.-The Star

Edelteq signs MOU for semiconductor-related ventures

Edelteq Holdings had inked one MOU with China-based CYG Semiconductor Equipment (Zhuhai) Co Ltd to set up two companies, one in China and another in Malaysia, that will be involved in semiconductor-related businesses. Edelteq said it also inked an MOU with local optical inspection system firm Halo Technologies SB to set up a business involved in semiconductor design, manufacturing, and selling of substrate automatic optical inspection (AOI) system. -The Edge Markets

Eupe Corp buys two more Sungai Petani plots for investment

Eupe Corp is purchasing two additional parcels of freehold land in Sungai Petani, located in the Kuala Muda district of Kedah, for RM40.68m, which will increase the land area around its proposed township for investment. It is buying the freehold plots, totalling 221,238sqm, from Sing Na Tian Development SB. The plots are also contiguous with two other parcels that Eupe bought in 2022 for a total of RM55.31m and measuring a collective 300,762 sqm. – The Edge Markets

TSA Group’s IPO shares oversubscribed

TSA Group, which is slated for a listing on the ACE-Market of Bursa Malaysia on Feb 2, has seen its initial public offering (IPO) oversubscribed by 8.62 times. It said a total of 4,304 applications for 148.78m shares with a value of RM81.83m were received from the Malaysian public.-The Star

Our Thoughts

Wall Street ended higher as traders chose to focus on the positives namely a solid labour market and robust economy ignoring the fact that the Federal Reserve may prolong prevailing high interest rates environment. Thus, the DJI Average jumped by 395 points while the Nasdaq added 295 points as the US 10-year yield dipped marginally to 4.13%. In Hong Kong, the HSI maintained its weakness as global funds are shunning the market in the absence of any stimulus from China so far despite valuations have fallen to an all-time low. Back home, the FBM KLCI rebounded following a correction from the 1,500 level a week before. Although bargain hunting activities were apparent, market undertone remains cautious with many investors adopting a wait and see attitude. Meanwhile, the contagion from the small caps seems limited to a selected few and may not be as bad as initially feared. For today, we believe the index to hover within the 1,485-1,495 range. Plantation stocks may be in focus today as the CPO has rallied to almost the RM4,000/tonne mark due to demand from China for the forthcoming Chinese New Year.

Source: Rakuten Research - 22 Jan 2024

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