Previous Day Highlights

25 June 2024 FBM KLCI closed marginally lower, dampened by a cautious market undertone. The benchmark index eased 0.04% or 0.71 pts to close at 1,589.66. Majority of sectors were negative with health care (-2.4%), technology (-1.8%), and property (-1.6%) leading the losses; while gainers were seen in construction (+0.4%), and industrial products & services (+0.3%). Market breadth was negative with 914 losers against 302 gainers. Total volume stood at 5.01bn shares valued at RM3.78bn.

Major regional indices trended mixed. HSI closed almost unchanged at 18,027.71. SHCOMP fell by 1.17%, to close at 2,963.10. Nikkei 225 mounted 0.54%, to finish at 38,804.65. STI added 0.25%, to close at 3,314.14.

Wall Street closed mixed due to mixed reaction over the sell-off on tech stocks and shifted their focus to banks and O&G stocks. The DJIA added 0.67%, to end at 39,411.21. Nasdaq eased 1.09%, to close at 17,496.82.S&P500 eased 0.31%, to finish at 5,447.87.

News For The Day

Sunway to acquire prefabricated home builder for RM25.5m

Sunway has proposed to acquire the remaining 70% stake in its joint venture (JV) Daiwa Sunway Development SB for RM25.5m. To recap, in June 2015, Sunway via its 60%-owned JV Sunway Iskandar SN and Daiwa House Malaysia SB formed the JV company on a ratio of 30:70 respectively, to construct 100 prefabricated homes in Iskandar Malaysia, Johor. The acquisition will entail financial requirements to fund the future development of Sakura Residence.-The Edge Markets

VS Industry proposes 1-for-10 bonus issue of warrants

V.S. Industry as proposed to undertake a bonus issue of up 395.7m free new warrants in VS based on one warrant for 10 existing VS shares, will be issued to shareholders at no cost. The EMS provider said the entitlement date would be determined and announced later. The warrants shall have a tenure of two years. -The Star

Solarvest, GreenRock to develop 1GW green energy projects

Solarvest Holdings has partnered with Taiwanese renewable energy player GreenRock Energy to develop one-gigawatt (GW) green energy projects in Taiwan and Malaysia in the next five years. Through this collaboration, GreenRock Energy aims to accelerate its regional expansion by harnessing Solarvest’s expertise in Malaysia and the Southeast Asia market amid heightened demand for RE.-The Edge Markets

Kronologi's 1Q net profit falls 43% YoY

Kronologi Asia’s 1QFY25 net profit fell 43.43% YoY to RM1.44m from RM2.55m, due to lower profit from its business operations and higher operating costs. Quarterly revenue declined 8.4% YoY to RM57.75m from RM63.03m. The company did not declare any dividend. -The Edge Markets

ECA’s 2Q net profit falls 93% amid semiconductor downcycle

ECA Integrated Solutions 2QFY10/24 net profit tumbled 92.9% YoY to RM252,000 from RM3.54m to due to the slowdown in demand for semiconductor components and equipment. Quarterly revenue declined 37.8% YoY to RM5.81m from RM9.35m. -The Edge Markets

Go Hub Capital's IPO oversubscribed by 78.71x

ACE Market-bound Go Hub Capital’s IPO has been oversubscribed by 78.71x. The transportation information technology solutions provider, which is set to list on July 3, 2024, had received a total of 20,452 applications for 1.59bn IPO shares worth RM557.94m from the Malaysian public, representing an oversubscription rate of 78.71 times.-The Star

Our Thoughts

Wall Street finished mixed yesterday despite heavy selling in tech stocks led by Nvidia. The Dow climbed 0.67% with strong buying in banks and energy stocks. Meanwhile, the S&P 500 benchmark dipped 0.3%, while the tech-centric Nasdaq Composite dropped over 1% due to Nvidia's more than 6% decline. Regionally, key indices closed mixed as investors were cautious following the sell-off in global tech stocks. In Hong Kong, the HSI pared losses and managed to stay above the 18,000 level. We reckon upcoming economic data releases, corporate earnings reports, and global trade developments are expected to influence investor sentiment as Hong Kong navigates economic challenges and external pressures. On the domestic front, the FBM KLCI trended in a tight range and ended in negative territory in tandem with the performance of emerging markets. We expect this to offer opportunities for investors to engage in bargain hunting given the cheaper valuations. On the other hand, Brent crude oil remains elevated at above USD 83 per barrel, and we believe this will provide a short-term play on energy stocks. We anticipate the benchmark index to trend within the range of 1,590-1,610 for today.

Source: Rakuten Research - 25 Jun 2024

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