Previous Day Highlights

FBM KLCI closed lower reflecting a shift in market sentiment despite a broadly higher regional market. The benchmark index was down 0.09% or 1.49 pts to close at 1,638.31. Majority of sectors were positive with technology (+2.8%), construction (+2.3%), and energy (+1.5%), leading the gains; while losers were seen in financial services (-0.4%), and REIT (-0.2%). Market breadth was positive with 669 gainers against 353 losers. Total volume stood at 2.61bn shares valued at RM2.94bn.

Major regional indices trended higher. HSI gained 0.77%, to end at 17,240.39. SHCOMP dropped 0.17%, to close at 2,717.12. Nikkei 225 surged 3.41%, to finish at 36,833.27. STI rose 0.72%, to close at 3,556.53.

Wall Street closed higher after August PPI data reinforced expectations for a rate cut during next week's FOMC meeting. The DJIA added 0.58%, to end at 41,096.77. Nasdaq rose 1.00%, to close at 17,569.68. S&P500 rose 0.75%, to finish at 5,595.76.

News For The Day

ITMAX System gets 3rd parking system contract in Johor

ITMAX System’s subsidiary has been appointed to operate a parking system in Tangkak, by the district council. The value of the contract was not disclosed, though the company said the contract will be on a revenue-sharing model. Southmax will receive 70% of the revenue generated from parking collections and parking compounds in the Tangkak district. The company’s most recent contract win was on Aug 16 with the Kuala Lumpur City Hall, ordering RM539.5m worth of surveillance cameras and video signages. – The Edge Markets

Hibiscus raises FY6/24 dividend to 8.5sen

Hibiscus Petroleum is proposing an additional 1sen dividend per share for FY6/24. The proposed dividend, announced by chairman Zainul Rahim Mohd Zain and subject to approvals, will raise its full-year dividend payout to 8.5sen per share, up from the adjusted 3.25sen per share for FY23. In FY6/24, Hibiscus' net profit rose 16.6% YoY to RM467.1m. – The Edge Markets

Binastra’s 2QFY1/25 net profit jumps

Binastra’s 2QFY1/25 net profit rose 171.4% YoY, as higher construction work activities and commencement of 5 new projects during the period. The company did not declare any dividend for the quarter under review. Tan is confident of Binastra's prospects, as the group had secured 11 new contracts worth a total of RM2.5bn. This outstanding order book provides earnings visibility for the group over the next 4 financial years. - The Edge Markets

MN Holdings, Reservoir Link to jointly explore RE business

Utilities engineering services firm MN Holdings has signed a pact with Reservoir Link Energy to explore potential business opportunities in the renewable energy (RE) sector. Under the memorandum of understanding (MOU) signed between MN Holdings’ unit MN Power Transmission SB and Founder Energy SB, a 51%-owned subsidiary of Reservoir Link, both parties will work together to secure and execute projects related to solar, biogas, and biomass. – The Edge Markets

Ecobuilt bags RM190m construction project

Ecobuilt has bagged a RM190m contract to undertake a construction job. Its wholly owned subsidiary, Rexallent Construction, has been appointed as contractor for the project by ARKITEK KDI. The company said the 3-year contract is expected to contribute positively to its earnings and net assets for FY24. – The Edge Markets

Our Thoughts

Wall Street ended higher attributed to bargain hunting activities particularly on megacap tech names ahead of the highly anticipated Fed rate cut next week. As such, the DJIA gained 235 points while the Nasdaq added 174 points with the US 10-year yield climbed marginally higher to 3.68%. Over in Hong Kong, the HSI rebounded in line with the regional uptrend. Alibaba led the tech rally as mainland funds mopped up shares after it was included in the Stock Connect scheme. Meanwhile, reports that China may reduce mortgage rates on more than USD5trillion loans may inject interests on the Hong Kong market. Back home, it was another disappointing day for the local bourse as the FBM KLCI ended in negative territory following a strong opening. We reckon foreign funds may have been net sellers over the past 2 days after consecutive net inflows last week. As depicted by the low daily volume, market undertone remains cautious but we believe accumulation on stocks to persists hence expect the index to hover within the 1,635- 1,645 range today.

Source: Rakuten Research - 13 Sep 2024

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