Previous Day Highlights

FBM KLCI closed marginally lower in the absence of fresh catalysts. The benchmark index was down 0.03% or 0.55 pts to close at 1,600.67. Gainers were seen in health care (+1.71%), telecommunications (+0.70%), and transportation(+0.46%); while losers were seen in utilities (-0.60%), plantation (-0.51%), and energy (-0.35%). Market breadth was mixed with 601 gainers against 538 losers while 494 were unchanged. Total volume stood at 4.62bn shares valued at RM3.27bn.

Major regional indices trended positively. HSI jumped 2.30%, to end at 18,963.68. SHCOMP closed flat at 3,154.55. Nikkei 225 rose 0.41%, to finish at 38,229.11. STI advanced 0.61%, to close at 3,285.95.

Wall Street closed modestly higher ahead of crucial inflation data due next week. The DJIA gained 0.32%, to end at 39,512.84. Nasdaq eased 0.03%, to close at 16,340.87. S&P500 added 0.16%, to finish at 5,222.68.

News For The Day

Mi Technovation’s 1Q net profit jumps over fourfold

Mi Technovation reported its 1QFY12/24 net profit more than quadruple to RM26.79m from RM6.4m YoY. This jump was driven by higher revenue, which climbed by 39.4% YoY to RM107.13m on stronger demand from customers, as well as foreign exchange gains. About 57.2% of total revenue for the quarter was contributed by its semiconductor equipment business, while 42.8% came from its semiconductor material business. -The Edge Markets

Paramount buys 21.5% stake in Eco World International

Paramount Corp has bought a 21.54% stake in Eco World International for RM170.61m in cash. Paramount’s wholly-owned subsidiary Flexsis SB bought 517m EWI shares at 33 sen per share from GLL EWI (HK) Ltd. The rationale for the acquisition is to accelerate its overseas expansion and diversification plan, said Paramount. -The Edge Markets

Feytech Holdings' IPO oversubscribed 15.6 times

Automotive cover and seat manufacturer Feytech said It received 14,687 applications for 701.36 shares worth RM561.09m from the Malaysian public, which represents an overall oversubscription rate of 15.64 times, ahead of its Main Market debut. -The Edge Markets

InNature buys 'Burger & Lobster' franchise, diverse into F&B

Innature has proposed to acquire a 100% equity interest in Blu Restaurant SB from Aquablu Technologies SB, Adventuria SB and Aquawalk SB for RM21.25m. The management expects the net profit generated from the F&B business segment may contribute 25% or more of the net profit in the future.-The Star

Bursa lifts Awantec from affected issuer status after 3 years

Bursa Malaysia Securities has lifted AwanBiru Technology, from its status as an affected listed issuer, after three years. Awantec said Bursa Securities has granted the company a waiver from being classified as an affected listed issuer, as it had complied with the criteria for the upliftment. The exchange regulator has also lifted the trading suspension of Awantec shares, which will take effect next Monday (May 13).-The Edge Markets

MAA raises stake in KNM to 13.54%

MAA Group has bought an additional 4.98% stake in troubled Practice Note 17 (PN17) company KNM Group for RM33.24m, at an average price of 16.5 sen per share. The acquisition raised MAA’s direct and indirect stake in KNM to 13.54%. The 4.98% stake was bought via a direct business transaction. -The Edge Markets

Our Thoughts

Wall Street closed on a mixed note as investors remained torn between weakening economic data and inflationary pressure. Nonetheless, sentiment was buoyed by the Federal Reserve stance that there will be no rate hike for now. Nonetheless, all eyes will be on April CPI to be out May 15. As a result, the DJI Average rose 125 points while the Nasdaq lost 5 points as the US 10-year yield edged higher at 4.50%. In Hone Kong, the HSI surged to almost the 19,000 mark or a YTD high aided by renew optimism of the recovering Chinese economy and that Xian became the 2nd city to scrap property purchase restrictions after Hangzhou. Sentiment was further boosted from talks that dividend tax may be scrapped on Hong Kong listed shares. Back home, the FBM KLCI remains in consolidation mode as the index ended flat at just above the 1,600 level. We believe buyers should return after recent bouts of correction thus expect the index to hover between the 1,600-1,610 with a strong upside bias today.

Source: Rakuten Research - 13 May 2024

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