Previous Day Highlights

FBM KLCI closed lower attributed to lpersistent selling activities. The benchmark index was down 0.59% or 9.17 pts to close at 1,535.79. Gainers were seen in health care (+1.71%), energy (+1.22%), and telco (+0.87%); while losers were seen in financial services (-0.91%), construction (- 0.53%), and REIT (-0.49%). Market breadth was neutral with 509 losers against 509 gainers while 485 counters were unchanged. Total volume stood at 3.82bn shares valued at RM2.66bn.

Major regional indices closed in positive territory after the China central bank kept the lending rate unchanged. HSI closed flattish at 16,543.07. SHCOMP increased 0.55%, to close at 3,079.69. STI rose 0.12%, to close at 3,177.48. Meanwhile, Nikkei 225 closed for Vernal Equinox Holiday.

Wall Street closed sharply higher after the Fed kept the interest rates unchanged and indicated more rate cuts by this year. The DJIA added 1.03%, to end at 39,512.13. Nasdaq rose 1.25%, to close at 16,369.41. S&P500 rose 0.89%, to finish at 5,224.62.

News For The Day

Top Glove's 2Q net loss narrows to RM51.19m

Top Glove Corp's 2QFY8/24 net loss narrowed to RM51.19m from RM164.67m, fuelled by stronger sales volume growth, as customers placed new orders following the depletion of excess inventory. The glove maker said revenue for the quarter came in lower at RM550.33m versus RM618.01m YoY. Top Glove is keeping to its target to return to the black as early as August this year, as demand for gloves continues to pick up after two years of inventory destocking due to excess capacity built up during the Covid-19 pandemic. -The Edge Markets

Kelington enters into lease agreement with Terengganu State

Kelington Group, via its 90.71% owned subsidiary, Ace Gases SB has entered into an agreement with Terengganu State Economic Development Corp to lease a parcel of land measuring 130,678.86 sq feet in Kerteh, Terengganu. The group will lease this parcel of land for an initial term of 30 years, to support the group’s future expansion efforts within the LCO2 manufacturing segment. -The Star

Eco World International posts RM182,000 net profit

Eco World International returned to the black with a net profit of RM182,000 for the 1QFY10/24, after nine consecutive quarters of losses. Its 1QFY24 were boosted by foreign exchange gains due to the appreciation of the British pound against the Malaysian ringgit as a result of the repayment of advances made by its joint venture company Ecoworld- Ballymore and the conversion of British pound-denominated bank balances. Revenue, meanwhile, jumped 41.6% YoY to RM31.67m from RM22.37m driven by the sale of higher priced commercial units. -The Edge Markets

Scientex Packaging’s 2Q profit shrinks 40% on lower revenue

Scientex Packaging (Ayer Keroh)’s 2QFY7/24 net profit shrank 40.06% YoY to RM8.02m from RM13.38m mainly due to lower revenue, higher electricity costs and changes in product mix. Revenue for 2QFY24 fell 11.2% YoY to RM175.84m from RM198.06m on lower demand from its export markets. The group also flagged risks to the challenging socioeconomic conditions in Myanmar. - The Edge Markets

FM Global proposes RM37.72m land acquisition for expansion

FM Global Logistics Holdings’ wholly owned subsidiary, FM Global Logistics (M) SB has proposed to acquire two parcels of land in Setia Alaman Industrial Park, Kapar for RM37.72m cash. The proposed land acquisitions are to facilitate the group’s future expansion of its third-party logistics (3PL) warehousing and distribution services. -The Star

Our Thoughts

Wall Street rallied as all 3 major indices closed at record highs after traders acknowledged the Federal Reserve’s maintained interest rates with 3 adjustments until year end. As a result, the DJI Average gained 401 points while the Nasdaq jumped by 203 points with the US 10-year yield easing to 4.277%. In Hong Kong, the HSI ended flat as sentiment remained cautious ahead of the Federal Reserve meeting. Meanwhile, China left lending rates unchanged in line with market expectations but strong earnings from Tencent injected some positivity. Back home, the FBM KLCI slumped to below the 1,540 level or down by 20 points over the last 2 days amid continuous selling from foreign funds. While we are perplexed of the recent sell-down, we believe the index will see a rebound today after a clearer picture from the Fed overnight. Hence, we expect the index to hover within the 1,540-1,550 range today, underpin by interests on the Banks, Construction and Utilities sectors.

Source: Rakuten Research - 21 Mar 2024

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