Previous Day Highlights

FBM KLCI closed higher as bargain hunting activity picked up. The benchmark index was up 0.37% or 6.03 pts to close at 1,640.94. Majority of sectors were positive with technology (+0.9%), property (+0.7%), and utilities (+0.6%), leading the gainers; while losers were seen in energy (-0.2%), and telecommunications (0.0%). Market breadth was positive with 567 gainers against 434 losers. Total volume stood at 2.64bn shares valued at RM2.31bn.

Major regional indices trended higher. HSI gained 2.98%, to end at 21,251.98. SHCOMP increased 1.32%, to close at 3,301.93. Nikkei 225 was up 0.26%, to finish at 39,380.89. STI slid 0.29%, to close at 3,585.29.

Wall Street closed lower following inflation data that came in higher than expected. The DJIA eased 0.14%, to end at 42,454.12. Nasdaq slid 0.05%, to close at 18,282.05. S&P500 down 0.21%, to finish at 5,780.04.

News For The Day

Public Bank to acquire 44.15% in LPI Capital for RM1.72bn

Public Bank is acquiring a 44.15% stake in LPI Capital from the estate of the late Tan Sri Teh Hong Piow and Consolidated Teh Holdings for RM1.72bn cash, or RM9.80 per share. The offer price of RM9.80 per LPI share for the MGO is approximately 25% below its last traded price of RM13. The proposed acquisition represents an opportunity for PBB to further expand its general insurance segment through the LPI Group’s platform to immediately gain a strong foothold and instant access to the LPI Group’s client base in Malaysia. - The Star

AREA acquires 30-acre land in Kedah to build data centre

AREA Group of Companies, through its special purpose vehicle Data Gateway, signed a sale and purchase agreement with Northern Gateway to purchase 30 acres of industrial land in Delapan, Kedah, to develop the first phase of its hyperscale data centre campus called AREA Data Centre Campus (ADCC). The first phase of ADCC will have an estimated gross development value (GDV) of US$2.4bn, and the entire 156 acres, upon completion, will have an estimated GDV of US$15bn. The first data centre (DC) will be completed by the end of 2025. - The Edge Markets

MIDA unveils MOUs with green investments of over RM1bn

The Malaysian Investment Development Authority (MIDA) unveiled seven memoranda of understanding (MOUs) with potential investments of over RM1bn in the green sector at the International Greentech and Eco Products Exhibition and Conference 2024 (IGEM) here. Five of the MOUs were signed by Solarvest Holdings for development and deployment of a battery energy storage system. Solarvest signed MOUs with Alliance Bank Malaysia for green financing collaborations and with UKM Pakarunding for renewable energy training and research. - The Edge Markets

MGB to undertake RM861.4m GDV mixed development

MGB will undertake mixed development and residential projects on 26 acres of land in Taman Bukit Serdang, Seri Kembangan with a combined gross development value (GDV) of RM861.4m. It is teaming up with Talam Transform to develop 16.5 acres of land for a mixed development project that includes commercial shoplots and affordable housing under the Rumah Selangorku scheme. With a construction order book of RM1.19bn, MGB is well-positioned for sustained growth in the second half of the year. MGB's 19 ongoing projects are expected to generate an estimated future revenue of RM4.02bn in the coming years. - The Edge Markets

Our Thoughts

Wall Street closed lower as traders reacted negatively towards September’s CPI figure which came in higher than anticipated. As a result, many are now concern that another big rate cut In November may not happen. Meanwhile, the US 10-year yield has eased marginally to 4.067%. Over in Hong Kong, the HSI rebounded to above the 21,000 level following PBOC’s introduction of a USD70bn financing facility for institutional purchases thus prompting expectations of more easing measures to prop up growth. The Hong Kong market will be closed today for Double Ninth Festival. On the home front, the FBM KLCI closed positively but off the day’s high amid bouts of late profit taking activities. Nonetheless, news that Public Bank is acquiring LPI Capital at a 25% discount to its pre-suspension price of RM13 via cash bodes well for the bank as the purchase is earnings accretive minus the dilutive impact to shareholders. As such, we may see some buying in Public Bank which accounts for more than 8% weighting on the FBM KLCI hence expect the index to hover within the 1,640-1,650 range today.

Source: Rakuten Research - 11 Oct 2024

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