Previous Day Highlights

FBM KLCI closed lower due to a lack of buying catalysts. The benchmark index down 0.19% or 3.14 pts to close at 1,642.54. Majority of sectors were positive with construction (+2.2%), transportation (+0.6%), and plantation (+0.5%), leading the gains; while losers were seen in property (-0.4%), and utilities (-0.3%). Market breadth was negative with 540 losers against 460 gainers. Total volume stood at 2.67bn shares valued at RM2.49bn.

Major regional indices trended mixed. HSI gained 0.10%, to end at 20,498.95. SHCOMP increased 0.54%, to close at 3,285.87. Nikkei 225 eased 1.39%, to finish at 38,411.96. STI slid 0.75%, to close at 3,587.41.

Wall Street closed mixed as investors evaluated the latest set of corporate earnings. The DJIA dropped 0.02%, to end at 42,924.89. Nasdaq rose 0.18%, to close at 18,573.13. S&P500 slid 0.05%, to finish at 5,851.19.

News For The Day

Gamuda bags RM4.3bn MRT project in Taiwan

Gamuda has secured a RM4.3bn contract for the Xizhi Donghu Mass Rapid Transit (MRT) in Taiwan, marking the group's seventh major infrastructure project there. Gamuda holds a 75 per cent majority stake in the JV is equivalent to RM3.2bn share of the contract value. - The Straits Times

CelcomDigi prefers to lead second 5G network

CelcomDigi CEO Datuk Idham Nawawi plainly admits that the group prefers to lead the second 5G network rather than take over the existing 5G network under state-owned Digital Nasional (DNB) when Malaysia transitions to a dual network model for 5G versus a single wholesale network (SWN). CelcomDigi’s network of 18,000 sites has been upgraded to be 5G-ready and can be transformed into a 5G network by just adding network equipment and performing a software upgrade if it is granted use of 5G or 3.5GHz spectrum currently given only to DNB. - The Edge Market

Bahvest signs exclusive gold mining agreement

Bahvest Resources said it had entered into an exclusive prospecting and contract of works agreement with Aurelius Borneo Mining, which is involved in gold mining (18,000 hectares). Prospecting is the first stage of the geological analysis of a territory in search of gold. There is also a profit-sharing arrangement from any future potential gold mined: 70% for WRSB and 30% for Aurelius. - The Edge Market

HSS Engineers unit inks JV with OPUS International

HSS Engineers's wholly-owned subsidiary HSS Engineering has entered into a joint venture and shareholders' agreement with OPUS International (M), a sub-subsidiary of UEM Edgenta, to provide engineering and technical services. HSS Engineering will have a 40% stake in the joint venture company while OPUS will own the majority 60%. - The Star

Ge-Shen shareholders approve stake buy in EMS firm

Contract manufacturer Ge-Shen Corp, whose share price has jumped over 200% year-to-date, has obtained shareholders’ approval to buy a 40% stake in electronic manufacturing services (EMS) firm Local Assembly for RM48m, cash, and diversify its existing business to include EMS. A private placement involving 39.6m shares to raise gross proceeds of up to RM91.2m to fund the acquisition, borrowings as well as working capital. The acquisition in Local Assembly comes with a guaranteed minimum profit-after-tax of RM24m from Local Assembly for FY24 and FY25. - The Edge Market

Our Thoughts

Wall Street ended on a mixed note as traders are digesting the ongoing earnings reports as the US 10-year yield inched higher at 4.208%, indicating that the Federal Reserve may not be aggressive in cutting rates next month. Meanwhile in Hong Kong, the HSI pared earlier losses to end on a flat note after a choppy session as traders are hopeful of more stimulus measures from China going forward. Back home, the FBM KLCI maintained its consolidation pattern to close lower as many are still pondering the aftereffects of Budget 2025. Daily volume traded remains low as we enter into the earnings season in a cautious mood. We believe trading to stay lacklustre thus expect the index to hover within the 1,640-1,650 range today. Meanwhile, crude oil prices rebounded with the Brent crude hitting above the USD76/barrel on renewed optimism over Chinese demand.

Source: Rakuten Research - 23 Oct 2024

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