Previous Day Highlights

FBM KLCI rebounded as buying interests returned, pushing to its 3-year high. The benchmark index gained 0.47% or 7.58 pts to close at 1,633.54. Majority of sectors were positive with construction (+3.6%), plantation (+1.3%), and property (+0.9%), leading the gains; while losers were seen in energy (-0.4%), and technology (-0.3%). Market breadth was positive with 770 gainers against 445 losers. Total volume stood at 5.28bn shares valued at RM3.88bn.

Major regional indices trended mixed. HSI added 0.06%, to end at 17,739.41. SHCOMP fell 0.45%, to close at 2,962.86. Nikkei 225 declined 0.43%, to finish at 41,097.69. STI closed almost unchanged at 3,489.57.

Wall Street closed mostly lower, dampened by mega chip stocks due to concerns over exports to China curb risks. The DJIA mounted 0.43%, to end at 41,129.90. Nasdaq dived 2.72%, to close at 18,005.57. S&P500 tumbled 1.25%, to finish at 5,596.13.

News For The Day

Pavilion REIT’s 2Q NPI up 18.8%

Pavilion Real Estate Investment Trust’s 2QFY12/24 net property income (NPI) increased 18.8% YoY to RM120.3m against RM101m. Quarterly distributable income expanded to RM74.8m from RM66.96m YoY. Its quarterly rental income climbed 27.4% YoY to RM185.29m from RM145.4m. Pavilion Bukit Jalil which acquired in June last year and Pavilion Kuala Lumpur were the main growth drivers out of the six commercial properties in the REIT’s portfolio. Pavilion REIT is distributing 4.53 sen per unit, up nearly 19% YoY from RM139.39m. -The Edge Markets

PTTS acquires land from Sime Darby Property for RM22m

PTT Synergy Group has entered into sale and purchase agreements with Sime Darby Property (Serenia City) SB and Sime Darby Property (Ampar Tenang) SB for the acquisition of two pieces of land with for a total cash consideration of RM22m.PTTS said both the lands have semi-detached factories on them. The proposed acquisitions are expected to be completed within 36 months from the date of the sale and purchase agreements.-The Star

PGF Capital to distribute insulated panels for data centres

PGF Capital has entered into a deal to serve as the Malaysian distributor of a Chinese company's mineral wool sandwich panels, which are suitable for wall facades in data centres. PGF Capital said its wholly-owned subsidiary, PGF Global Distribution SB, has signed a five-year agreement with Centria Building Material Manufacturing (Shanghai) Co Ltd (Centria International), granting PGF Global exclusive distributorship rights for Centria International’s mineral wool sandwich panels, or thermal insulated panels in Malaysia. Centria International primarily supplies insulated panels for industrial and commercial projects.-The Edge Markets

ILB Group to acquire solar energy business for RM98m

ILB Group is acquiring a solar energy company and its assets for RM98m, cash. ILB will pay RM30m for the purchase of Armani Sinar SB from Andy Woo Weng Kok, and another RM68m for the acquisition of a solar photovoltaic (PV) system from Armani Energy SB. Armani Energy owns about 16.9 megawatt peak (MWp) of solar assets. The acquisition of Armani Sinar comes with a profit guarantee of at least RM8m on an aggregate basis for FY24 to FY26. The acquisition of Armani Sinar and solar PV assets are expected to be completed by 4Q24 and 1Q25 respectively. -The Edge Markets

Our Thoughts

Wall Street ended on a mixed note as tech stocks were rattled by the latest US move to curb chip exports to China coupled with Trump’s demand for protection money from Taiwan. As such, while the DJIA added 244 points as portfolio rotation continues, the Nasdaq lost a massive 512 points with the US 10-year yield flat at 4.159%. Over in Hong Kong, the HSI just managed to stay afloat as traders await for some policy stimulus from China’s third plenum amid the growing pessimism on China’s economic outlook. Back home, the FBM KLCI finally managed to close above the 1,630 level or a YTD high of 1,633. Though we expect the upside momentum to continue today, buying may somehow be muted due to the growing trade tension between US and China. Nonetheless, we expect the index to possibly hover within the 1,630-1,640 range today. Meanwhile, crude oil prices rose with the Brent surpassing USD85/barrel on the back of lower inventory attributed to higher draw of stocks over the past 2 weeks.

Source: Rakuten Research - 18 Jul 2024

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