Previous Day Highlights

FBM KLCI continued to trend lower and ended at its intra- day low, as ongoing selling pressures persisted. The benchmark index dived 0.37% or 5.96 pts to close at 1,615.18. Majority of sectors were negative with construction (-2.2%), technology (-2.0%), and property (- 1.7%) leading the losses; while gainers were seen in REIT (+0.3%), and financial services (+0.2%). Market breadth was negative with 954 losers against 255 gainers. Total volume stood at 4.55bn shares valued at RM3.11bn.

Major regional indices closed on a weak note amid cautious global sentiment. HSI tumbled 1.77%, to end at 17,004.97. SHCOMP dropped 0.52%, to close at 2,886.74. Nikkei 225 plunged 3.28%, to finish at 37,869.51. STI fell by 0.88%, to close at 3,430.45.

Wall Street closed mixed amid AI fatigue and stronger than expected GDP data. The DJIA advanced 0.20%, to end at 39,935.07. Nasdaq declined 0.93%, to close at 17,181.72. S&P500 lost 0.51%, to finish at 5,399.22.

News For The Day

Nestlé Malaysia’s 2Q net profit down 48% to RM93.6m

Nestlé (Malaysia)’s 2QFY24 net profit declined 48.27% YoY to RM93.60m down from RM180.92m driven by a drop in domestic sales, reflecting subdued consumer sentiment and constrained purchasing power. Quarterly revenue stood at RM1.52bn, down 13% YoY as compared to RM1.75bn. The group declared an interim dividend of 70 sen per share. -The Edge Markets

Higher R&D investment drag on ViTrox's 2Q net profit

ViTrox Corp’s 2QF24 net profit fell 25.4% YoY to RM28.1m, down from RM37.66m, dragged by its ongoing research and development investment as well as unfavourable foreign exchange (forex) losses. Quarterly revenue fell 8.2% YoY to RM137.2m from RM149.39m on lower sales of automated board inspection but was partially offset by robust sales orders from its machine vision system. -The Edge Markets

IGB REIT NPI rises 6.5% in 2Q

IGB Real Estate Investment Trust’s 2QFY24 net property income (NPI) rose 6.5% YoY to RM109.48m from RM102.79m, due to higher rental income. Revenue increased 5.95% YoY to RM149.97m from RM141.54m. Its distributable income rose to RM94.69m. It declared a distribution of 2.56 sen per unit.-The Edge Markets

KIP REIT net property income surges 63% in 4QFY24

KIP Real Estate Investment Trust's 4QFY6/24 NPI surged 62.8% YoY RM26.43m from RM16.23m, thanks to strong gain of retail properties in Peninsular Malaysia's northern and central regions. Revenue rose 46% YoY to RM32.64m from RM22.39m. Income distributable to unitholders was 28% YoY higher at RM13.49m versus RM10.52m.-The Edge Markets

Betamek registers higher net profit of RM4.88m in 1Q

Betamek reported its 1QFY5/25 net profit of RM4.88m versus RM4.79m YoY on the revenue of RM49.97m against RM43.45m YoY. The board of directors declared an interim dividend of one sen per share, payable on Aug 23, 2024-The Star

Texchem returns to the black in 2Q after 6 quarters of losses

Texchem Resources returned to the black after 6 consecutive quarters of losses, thanks to higher sales across all business divisions, except for its food division, which was dragged down by higher forex losses in its Myanmar operations. Its 2QFY24 net profit was RM975,000 compared to a net loss of RM6.26m YoY. Quarterly revenue rose 22.58% YoY to RM294.74m from RM240.45m.-The Edge Markets

Our Thoughts

Wall Street's close was mixed as traders tried to recover from Wednesday's sharp sell-off, even though US GDP beat expectations. The Nasdaq dropped 0.9%, the S&P 500 fell 0.5%, while the Dow industrials rose 0.2%. Investors were still affected by the disappointing earnings from US tech giants. Over to Hong Kong, Banking stocks dropped even though several lenders cut their deposit rates, following the Chinese central bank's decision to lower a key policy rate and the mortgage reference rate earlier this week. Tech companies also declined after Nasdaq posted sharp falls. As a result, The HSI fell 1.8% to 17,004.97 at the close. As for the local bourse, the FBM KLCI continued to trend lower amid the weak global sentiment. Nonetheless, the benchmark index remained well supported above the 1,610 level, hence we reckon accumulation of stocks to persist on dips. Hence, we anticipate the benchmark index will range between 1,610 and 1,620 today.

Source: Rakuten Research - 26 Jul 2024

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