Previous Day Highlights

FBM KLCI declined by 0.36% or 5.93 pts to close at 1,642.77. Majority of sectors were negative with utilities (-2.8%), energy (-1.6%), and technology (-1.5%) leading the losses; while gainers were seen in financial services (+0.5%), and REIT (+0.2%). Market breadth was negative with 856 losers against 357 gainers. Total volume stood at 4.2bn shares valued at RM4.54bn.

Major regional indices trended mixed. HSI declined 0.33%, to end at 17,511.08. SHCOMP dropped 0.93%, to close at 2,866.66. Nikkei 225 was up 1.80%, to finish at 38,062.92. STI rose 0.44%, to close at 3,370.31.

Wall Street closed lower as the market awaits for the minutes of the Federal Reserve's July monetary policy meeting. The DJIA dropped 0.15%, to end at 40,834.97. Nasdaq eased 0.33%, to close at 17,816.94. S&P500 eased 0.20%, to finish at 5,597.12.

News For The Day

TNB hit with additional RM1.39bn tax bill

Tenaga Nasional received notices of additional assessment from the Inland Revenue Board (IRB) for the years of assessment 2020 & 2021, amounting to RM685.8m and RM705.2m, respectively. The utility giant, in a filing with Bursa Malaysia, said the notices are similar to those received in previous years, which are currently pending in court. TNB has obtained an interim stay order against the payment of the disputed taxes. -The Star

Johor Plantations’ 2Q net profit nearly quadruples

Johor Plantations Group, a palm oil producer listed just last month, reported that its 2QFY24 net profit which nearly quadrupled YoY to RM49.7m due to higher prices and sales volume. YoY net profit for 2QFY24 increase from RM12.7m to RM49.7m, Johor Plantations said in an exchange filing. Earnings per share were 2.44 sen in 2QFY24 vs 0.70 sen per share a year earlier. -The Edge Markets

Willowglen MSC secured RM42.8m contract

Willowglen MSC secured a contract worth approximately RM42.8m from the Ministry of Education in Singapore for the design, supply and installation of security systems. The contract is expected to contribute positively to the group's earnings and net assets per share for the FY24 to FY25. Shares in Willowglen closed unchanged at 32.5 sen, giving it a market capitalisation of RM161.2m. - The Edge Markets

MCE Holdings secured RM52.1m contract

MCE Holdings secured contracts from Proton Holdings worth RM52.1m to supply automotive electronic and mechatronic components. The five-year contract is expected to commence 1Q7/FY25. As part of the job, MCE will be providing parts such as the front reading lamp, rear reflector, and pull cup handle assembly for Proton vehicles. The estimated total investment cost for the project is RM2.2m. - The Edge Markets

Magma's 75%-subsidiary sued

Magma Group’s 75%-subsidiary, Impiana Selo Tioman Resorts being sued by two individuals over an alleged breach of a sale and purchase agreement relating to five parcels of land in Tioman, Pahang. Magma’s solicitors have sent a letter to the plaintiff's solicitor as part of efforts to settle the matter amicably. Shares in Magma ended 2.38% lower at 20.5 sen, giving the company a market capitalisation of RM194.3m.- The Edge Markets

Our Thoughts

Wall Street ended in negative territory amid some profit taking activities as traders await for the Jackson Hole Economic Symposium over the next few days to gauge on the quantum of cut in rates next month. As such, the DJIA dipped 61 points while the Nasdaq dropped by 60 points as the US 10-year yield eased to 3.81%. In Hong Kong, the HSI closed lower after a 3-day uptrend as traders were side-lined after China left benchmark lending rates unchanged. Focus was also on the Federal Reserve this weekend on rate adjustments in September. Back home, the FBM KLCI closed lower following a solid performance on Monday. We believe the local bourse still has legs to trend higher as yesterday’s selling was well absorbed. Although the daily volume traded remained low, we believe market velocity is gathering traction thus anticipate shares traded to improve over time. For today, we expect the index to trend within the 1,640-1,650 range. As we enter into another earnings season, results reported so far have been quite decent and more can be expected from the Banks and Telcos going forward.

Source: Rakuten Research - 21 Aug 2024

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