Previous Day Highlights

FBM KLCI continued to slide amid ongoing broad-based selling pressure across the region. The benchmark index down was 0.81% or 13.20 pts to close at 1,611.05. All the sectors were negative with construction (-5.0%), technology (-4.6%), and property (-3.8%) leading the losses. Market breadth was negative with 1,316 losers against 155 gainers. Total volume stood at 5.17bn shares valued at RM3.98bn.

Major regional indices closed sharply lower, tracking the overnight rout on

Wall Street. HSI tumbled 2.08%, to end at 16,945.51. SHCOMP plummeted 0.92%, to close at 2,905.34. Nikkei 225 dived 5.81%, to finish at 35,909.70. STI plunged 1.12%, to close at 3,381.45. Wall Street continued to plunge amid widespread fears of a possible recession, which erupted due to weak economic data. The DJIA dropped 1.51%, to end at 39,737.26. Nasdaq eased 2.43%, to close at 16,776.16. S&P500 eased 1.84%, to finish at 5,346.56.

News For The Day

Malaysia Smelting Corp 2Q net profit drops 41%

Malaysia Smelting Corp’s 2QFY6/24 net profit fell 41.2% YoY to RM16.72m from RM28.45m, mainly dragged by the weaker performance of its tin smelting segment. This decline was attributed to the annual re-bricking and scheduled maintenance of the top submerged lance furnace starting in mid-May, which led to lower refined tin output, smelting income and profit. Quarterly revenue rose 26% YoY to RM410.8m from RM327m, lifted by higher average tin price. No dividend was declared for the quarter. -The Edge Markets

Awantec to supply Google Workspace licence for RM9.97m

AwanBiru Technology is supplying Google Workspace Enterprise Starter licence to Sabah Net SB (SNSB) for RM9.97m. Its wholly-owned subsidiary Awantec Systems SB has inked a service agreement with SNSB for subscription of said licence. The agreement is for a five-year period from Aug 1, 2024 to July 31, 2029. -The Edge Markets

Binastra bags RM160m contract from Dynamicz

Binastra Corp’s wholly-owned subsidiary, Binastra Builders SB has secured an RM160m contract from Dynamicz SB for demolition and construction of main building works comprising four floors of offices (560 units), as well as two basement levels at Damansara Perdana, Selangor. The contract is set to commence on Aug 2, 2024, and is scheduled for completion by July 30, 2026. The group’s total outstanding order book will be approximately RM2.2bn. -The Star

Four Ranhill directors, resign after YTLPower’s takeover

Ranhill Utilities said four of its directors, including founder and executive chairman Tan Sri Hamdan Mohamad, have resigned from their positions after the successful takeover of Ranhill by YTL Power International and its 70%-owned unit SIPP Power SB. Their resignations are pursuant to the terms in the unconditional share sale and purchase agreement. -The Edge Markets

Paragon unit to dispose of land in Johor for RM98.98m

Paragon Globe’s wholly-owned subsidiary, Paragon Business Hub SB, has entered into a conditional sale and purchase agreement with Bridge Data Centres Malaysia VI SB for the proposed disposal of 7.98 hectare land in Johor Bahru, Johor, for RM98.98m. The disposal is expected to be completed by 3Q25.-The Star

Our Thoughts

Wall Street sell-down continues as sentiment was further eroded amid recessionary fears and the weaker than expected job data for July pushing unemployment rate higher to 4.3%. As a result, the DJIA declined by 611 points while the Nasdaq lost 418 points as funds maintained the transition to bonds thus pushing the US 10-year yield to a YTD low at 3.799%. In Hong Kong, the HSI declined to below the 17,000 level following the possible rough landing of the US economy despite of more potential rate cuts from the Federal Reserve going forward. Back home, the FBMKLCI was not spared either as it dipped to just above the 1,610 mark amid a regional bloodbath. We believe such drastic selling was just a knee-jerk reaction as traders may treat this as an excuse to lock in profits. Nonetheless, we reckon overall sentiment may have turned cautious though we anticipate some bargain hunting to resurface albeit tentatively. As such, we see the index to possibly hover within the 1,605-1615 range today. Meanwhile, the good news is that the MYR has strengthened to RM4.50/USD1 or our year-end target.

Source: Rakuten Research - 5 Aug 2024

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