Previous Day Highlights

FBM KLCI closed higher due to improving sentiment across the region. The benchmark index was up 0.20% or 3.22 pts to close at 1,638.96. Majority of sectors were positive with energy (+1.5%), industrial products & services (+0.7%), and REIT (+0.6%), leading the gains; while losers were seen in technology (-0.9%), and health care (-0.8%). Market breadth was negative with 578 losers against 506 gainers. Total volume stood at 2.83bn shares valued at RM2.62bn.

Major regional indices trended mostly higher. HSI gained 1.06%, to end at 17,798.73. SHCOMP increased 0.04%, to close at 2,855.52. Nikkei 225 eased 0.66%, to finish at 38,110.22. STI rose 0.24%, to close at 3,396.03.

Wall Street closed mixed as impact from September rate cut may be fading. The DJIA added 0.16%, to end at 41,240.52. Nasdaq eased 0.85%, to close at 17,725.77. S&P500 eased 0.32%, to finish at 5,616.84.

News For The Day

Hong Leong Industries FY24 net profit rises to RM387.9m

Hong Leong Industries’ FY24 net profit rose to RM387.9m, due to a sales mix of higher-margin motorcycle models. On prospects, the group said motorcycle demand has shown signs of improvement towards the end of the current financial year, which will bode well for its FY25, and will continue its focus on products, market position and cost to further improve the performance. The Star

Guan Chong books RM67m profit in 2Q

Guan Chong 2QFY24’s net profit surged to RM67m driven by higher selling price for cocoa products and increased sales volume for cocoa solids. There was no dividend declared. On prospects, the group noted that it will continue to focus on its core business of cocoa ingredient processing while also expanding into the higher-margin industrial chocolate market and optimising production in accordance with market conditions. - The Edge Markets

E&O posts higher net profit of RM37.52m in 1Q

Eastern & Oriental (E&O) reported a 1QFY3/25 net profit of RM37.5m primarily driven by increased revenue from its property segment. Looking ahead, E&O said it is finalising plans to launch the first sea-facing residential apartments on the island. E&O added that its hospitality segment continues to achieve high average occupancy and room rates. - The Star

Southern Cable's 2Q net profit jumps over two-fold

Southern Cable Group is investing in increased production capacity to meet the growing demand for cables and wires in response to robust growth. The cable and wire manufacturer’s 2QFY24 net profit more than double YoY to RM14.4m. The group’s current orders in hand stood at RM923.1m, including a RM99.6m contract from Tenaga Nasional Bhd, covering EPCC contractor purchases, to be fulfilled by FY26.- The Star

Ajinomoto Malaysia FY25’s net profit jump 55%

Ajinomoto (Malaysia)’s 1QFY3/25 net profit jumped 55% YoY to RM18.9m, as revenue and finance income climbed. It did not declare any dividends for the quarter under review. Ajinomoto just paid a special one-off dividend of RM2.12 per share on May 30 that amounted to RM128.9m in respect of its FY3/25.- The Edge Markets

Our Thoughts

Wall Street ended on a mixed note as traders may be rotating out of tech stocks ahead of the imminent rate cut next month. Thus, despite the DJIA adding 65 points, the Nasdaq declined by 152 points with the US 10-year yield inched higher at 3.82%. Over in Hong Kong, the HSI climbed 187 points on optimism that the US will end its high interest rate regime soon that should benefit property related stocks as illustrated by the jump in the Hang Seng Mainland Properties Index (HSMPI) by 1.9%. Back Home, trading on the local bourse remains lacklustre despite the FBM KLCI closing on a positive note at almost the 1,640 marks. Buying on blue chips continued from the inflows of foreign funds possibly taking advantage of the appreciating Ringgit which strengthened to almost a 2-year high at RM4.35/USD1. As such, we expect the index to hover within the 1,635-1.645 range today. Meanwhile, escalating violence in the middle-east saw crude oil prices higher as the Brent crude jumped above the USD81/barrel.

Source: Rakuten Research - 27 Aug 2024

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