Previous Day Highlights

FBM KLCI continued with its upward trajectory amid the upbeat momentum across the region. The benchmark index was up 0.48% or 7.50 pts to close at 1,582.66. Majority of sectors were positive with health care (+2.3%), utilities (+1.9%), and construction (+1.1%), leading the gains; while the only losers was seen in financial services (-0.2%). Market breadth was positive with 668 gainers against 438 losers. Total volume stood at 4.24bn shares valued at RM3.48bn.

Major regional indices trended higher spurred by the rally in Chinese properties. HSI gained 0.54%, to end at 17,746.91. SHCOMP increased 0.79%, to close at 3,113.04. STI advanced a mere of 0.06%, to close at 3,282.05. Meanwhile, Nikkei 225 closed for Showa Holiday.

Wall Street closed higher buoyed by good corporate earnings. The DJIA added 0.38%, to end at 38,386.09. Nasdaq rose 0.35%, to close at 15,983.08. S&P500 rose 0.32%, to finish at 5,116.17.

News For The Day

Nestlé's 1Q net profit dips 0.8% on lower domestic sales

Nestlé (Malaysia)'s 1QFY12/24 net profit dipped 0.8% YoY to RM195.51m from RM197.15m, due to slightly lower sales, offset by cost management initiatives and better commodity costs. Revenue slipped 3.2% YoY to RM1.78bn from RM1.84bn. Nestlé did not declare any dividend for the quarter. It said 2024 to be challenging from the lingering effect of inflation and foreign exchange volatility on Malaysians' purchasing power as well as heightened competition. -The Edge Markets

ViTrox anticipated semiconductor recovery in 2H24

ViTrox Corp, whose net profit halved in 1QFY24, is ramping up research and development (R&D) investments to 10%-12% of revenue, ahead of an expected semiconductor recovery towards 2H24. The R&D focus will be on vision inspection, AI and robotics, CEO Chu Jenn Weng told The Edge. Vitrox trimmed its R&D expenditure to 7.8% of total revenue in 2023, equivalent to RM44.6m, as part of its “prudent investment strategy” in response to a slowdown in demand. -The Edge Markets

YTL REIT to develop hotel in Japan for RM199m

YTL Hospitality Real Estate Investment Trust (YTL REIT) is proposing to develop a hotel in Aza-Soga, Niseko-cho, Abuta- gun, Hokkaido, Japan for an estimated total development cost of RM199m. YTL REIT said it is developing a five-storey hotel with a two-storey basement under the Moxy brand name, which is a segment of Marriott’s millennial-focused brand (Moxy Niseko).-The Star

Tex Cycle to build waste management facility in Sabah

Tex Cycle Technology (M) has partnered Evolusi Bersatu SB to invest RM100m in Sabah’s first integrated scheduled waste management facility. Construction will start in 2H2024 to be fully operational by 4Q2025. The project is designed to complement existing scheduled waste management providers, it said. When contacted, Tex Cycle’s management told The Edge that Tex Cycle will hold a 51% stake in the joint venture (JV), while Evolusi Bersatu, an oil and gas services firm, will own the remaining 49%. -The Edge Markets

Oppstar partners Samsung to produce integrated circuits

Integrated circuit (IC) design service provider Oppstar is collaborating with South Korea’s tech giant Samsung Electronics Co Ltd for the production of industrial ICs, using Samsung’s 14 nanometre (nm) FinFET technology foundry process. However, no other details were given on the collaboration.-The Edge Markets

Our Thoughts

Wall Street continued with its uptrend boosted by solid corporate earnings report, but Tesla was the day’s hero after it cleared the first hurdle for full self-driving technologies in China. Nonetheless, rotational plays amongst the mega tech stocks were evident with McDonald’s, Coke and Amazon earnings still to come. As such, the DJI Average gained 146 points while the Nasdaq added 55 points with the US 10-year yield easing further to 4.612%. In Hong Kong, the HSI added another 96 points or improved by almost 19% from its YTD low in mid- January. The revitalisation of the Hong Kong market can largely thanks to China’s new measures to boost sentiment plus the improving corporate earnings. Back home, the FBM KLCI ended at another YTD high underpinned from broad-based buying on blue chips and surprisingly Banks were not the preferred ones. Nonetheless, we believe this offers good opportunities to buy some banking stocks as interest will eventually return to the sector. For today, we expect the index to hover between the 1,580-1,590 range and we will be closed for Labour Day tomorrow.

Source: Rakuten Research - 30 Apr 2024

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