Previous Day Highlights

FBM KLCI closed lower amid a weak regional performance. The benchmark index was down 0.38% or 6.41 pts to close at 1,670.24. Majority of sectors were negative with technology (-2.7%), energy (-2.1%), and utilities (-1.2%) leading the losses; while gainers were seen in telecommunications (+0.7%), and plantation (+0.1%). Market breadth was negative with 813 losers against 307 gainers. Total volume stood at 3.04bn shares valued at RM2.89bn.

Major regional indices trended negatively. HSI declined 1.10%, to end at 17,457.34. SHCOMP dropped 0.67%, to close at 2,784.28. Nikkei 225 plunged 4.24%, to finish at 37,047.61. STI slid 1.12%, to close at 3,441.38.

Wall Street closed mixed ahead of the job report on Friday. The DJIA added 0.09%, to end at 40,974.97. Nasdaq eased 0.30%, to close at 17,084.30. S&P500 eased 0.16%, to finish at 5,520.07.

News For The Day

IHH wins RM4bn bid for Island Hospital Penang

IHH Healthcare has proposed to acquire a 100% stake in Penang- based Island Hospital (IHSB), which has 600 beds, for RM4bn cash. IHH expects more than RM200m in synergies over the next 5 years following the acquisition. By aligning on commercial practices and operations with IHH, including consolidating procurement, IHSB can enhance efficiency in its operations. IHSB holds a landbank valued at RM223.4m, this will secure IHH’s growth in the region and address the rising healthcare demand from both local and international patients. - The Star

Alpha IVF inks deal to venture into the Philippines

Alpha IVF is venturing into the Philippines medical business, focusing on obstetrics and gynaecology as well as fertility, as it formed a JV with two doctors from Philippines. Alpha IVF will be investing RM8.7m into AIMI using its initial public offering (IPO) proceeds or internally generated cash, making it the controlling shareholder with an initial stake of 90.98%. Alpha IVF Group is bullish about the outlook and prospects of its new business in Manila. - The Star

Elridge Energy signs MoU for palm kernel shell supply

Elridge Energy’s wholly owned subsidiary, Bio Eneco has entered a MoU with PT Orion APAC Indonesia (Orion) for the sale and purchase of palm kernel shells. Elridge Energy will supply Orion with 150,000 tonnes of palm kernel shells annually over a 3-year period. This long-term agreement is expected to contribute positively to Elridge Energy’s financial performance. – The Star

Pekat Group’s order book to grow significantly to RM320m

The latest contract win by Pekat is expected to generate a healthy recurring income for the group throughout a 10-year period. The solar-photovoltaic provider’s order book remains healthy at RM206.8m and is expected to grow to about RM320m by year-end. Pekat also expand its business into power distribution equipment and to tap into new foreign markets, which will strengthen its bottom line significantly starting FY25. – The Star

Central Global bags RM616.4m highway job in Sabah

Central Global has bagged a RM616.4m contract for the Pan Borneo Highway Sabah Phase 1B project. The project award has significantly increased its order book to RM751.5m. It expects the contract to provide consistent revenue generation for the group over the next three and a half years. The group is confidence to deliver large-scale projects and anticipates further contract awards from its tender book, valued at RM3.7bn.- The Edge Markets

Our Thoughts

Wall Street closed mixed as traders stayed sidelined ahead of the employment report tomorrow. As such, while the DJIA added 38 points, the Nasdaq dipped 52 points as the US 10-year yield continues to ease now hovering at 3.757%. Over in Hong Kong, the HSI slipped by almost 200 points to end at a 2-week low as sentiment remains very much attuned to developments in the US. Energy related stocks in Hong Kong led the declines amid the weakness of crude oil prices. At home, the FBM KLCI ended lower amid the weak regional performance. Nonetheless, we noticed some bargain hunting activities on blue chips as the index seems to be well supported at current levels. Therefore, we expect the index to hover within the 1,670-1,680 range today. Meanwhile, crude oil prices continue to decline over the weakening demand especially from China resulting in the Brent crude price now trading at below the USD73//barrel.

Source: Rakuten Research - 5 Sep 2024

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