Previous Day Highlights

FBM KLCI closed flat amid the cautious sentiment following a weak regional performance. The benchmark index added a mere 0.02% or 0.27 pts to close at 1,633.81. Majority of sectors were positive with property (+1.3%), transportation (+0.8%), and REIT (+0.4%), leading the gains; while losers were seen in industrial products & services (-2.0%), and technology (-1.8%). However, market breadth was negative with 727 losers against 499 gainers. Total volume stood at 5.49bn shares valued at RM4.22bn.

Major regional indices trended mixed as uncertainties arose from the escalating US-China trade war. HSI advanced 0.22%, to end at 17,778.41. SHCOMP increased 0.48%, to close at 2,977.13. Nikkei 225 dived 2.36%, to finish at 40,126.35. STI lost 0.53%, to close at 3,471.16.

Wall Street ended sharply lower as overall sentiment turned anxious, led by high-priced mega caps, while 2Q earnings were in focus. The DJIA tumbled 1.29%, to end at 40,665.02. Nasdaq sank 0.70%, to close at 17,871.22. S&P500 slumped 0.78%, to finish at 5,544.59.

News For The Day

Gamuda JV gets A$1.6bn rail signalling project in Australia

Gamuda’s joint venture (JV) with French rail engineer Alstom SA in Australia has secured a contract worth A$1.6bn (RM5bn). The scope of works under the contract consists of the design, supply, installation, testing, commissioning and maintenance of a new automatic train control system to replace the existing signalling and train control systems on Perth’s suburban rail networks. Gamuda has a 46% stake in the JV, while Alstom holds the remaining 54%. Gamuda is expected to rake in revenue of up to A$737m from its involvement in the project, the contract of which will last over 10 years. -The Edge Markets

Ancom Nylex posts record high annual profit in FY24

Ancom Nylex’s 4QFY5/24 net profit grew 1.44% YoY to RM18.44m from RM18.18m, while revenue increased 1.82% YoY to RM486.96m from RM478.25m. The quarterly profit helped to lift Ancom Nylex’s full-year net profit to a record high of RM81.47m. Ancom Nylex proposed a second interim dividend of one sen per share, the same amount as last year. Moving forward, the company said that it will continue to be vigilant in managing risks arising from geopolitical tensions that may impact the cost of doing business, as well as continue to explore more opportunities for its business. -The Edge Markets

High Court sides with T7 Global's unit in dispute

T7 Global said the High Court has ruled in favour of its wholly- owned unit Tanjung Offshore Services SB in its dispute with consortium partner VME Process Systems Malaysia SB. The court ruled that the joint settlement agreement and the intellectual property protection agreement signed by both parties in 2020 were void. VME was ordered to refund the RM22.88m, or US$5.5m as per the statement of claim, to Tanjung Offshore. The latest and past disclosures related to the ventures did not clearly state the purpose of the initial payment.-The Edge Markets

AWC Accepts LOA From KTMB Worth RM8.6m

AWC announced that its wholly owned subsidiary has accepted an LOA from KTMB for the supply and delivery of mono-block wheel for wagon and 26 class locomotives for a contract value of RM8.6m. The supply is scheduled to begin on 1 August 2024 and be finished by 31 July 2026.-Business Today

Our Thoughts

Wall Street slumped as the sell-down on mega caps have also impacted the broader market as traders are also taking the opportunity to lock in profits following recent record breaking runs. As a result, the DJIA lost 533 points while the Nasdaq declined by 126 points as the US 10-year yield edged higher at 4.201%. In Hong Kong, the HSI closed slightly higher as traders are expecting for some reforms from China’s third plenum amid more curbs on Chinese semiconductor companies. On the local front, the FBM KLCI ended flat and managed to stay above the crucial 1,630 level due to some late buying activities. It is apparent that market undertone remains solid as we anticipate accumulation of stocks to persist. Nonetheless, the ongoing correction on Wall Street may see heightened volatility within the region hence we expect the benchmark index to gyrate within a narrow range of between 1,630-1,640 today.

Source: Rakuten Research - 19 Jul 2024

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