Previous Day Highlights

FBM KLCI closed lower as investors took profits following recent gains. The benchmark index down 0.67% or 10.89 pts to close at 1,623.28. Majority of sectors were negative with telecommunications (-1.4%), consumer (-1.4%), and utilities (-1.3%) leading the losses; while gainers were seen in technology (+1.2%), and financial services (+0.1%). Market breadth was negative with 641 losers against 466 gainers. Total volume stood at 3.78bn shares valued at RM3.42bn.

Major regional indices trended higher. HSI gained 2.02%, to end at 20,953.34. SHCOMP increased 2.57%, to close at 3,470.66. Nikkei 225 eased 0.25%, to finish at 39,381.41. STI rose 1.96%, to close at 3,673.49.

Wall Street closed higher as the Federal Reserve lowered interest rates by 25 basis points. The DJIA was flat at 43,729.34. Nasdaq rose 1.51%, to close at 19,269.46. S&P500 rose 0.74%, to finish at 5,973.10.

News For The Day

EcoWorld launches RM4.6bn Boustead project

Eco World Development Group is buying 342.86 hectares (ha) of land owned by Boustead Properties in Semenyih for RM742.4m cash, to be developed into a RM4.6bn mixed development. The purchase will be made via a joint venture company, Mutiara Balau (MBSB), in which Eco World Malaysia holds 81% interest, and BProp 19% interest. EcoWorld Malaysia believes this augurs well for the group's future growth and earnings prospects. – New Straits Time

Pentamaster’s 3Q profit halves

Pentamaster Corp’s net profit fall 49.9% to RM11.8m for 3QFY24, dragged down by lower automated test equipment (ATE) sales performance and foreign exchange losses. The dismal ATE performance which saw automotive related-sales fall 56.5% YoY, was mainly the consequence of the US and Europe tariff policies towards Chinese-made electric vehicles (EV), that had resulted in greater market uncertainty and disruptions. Pentamaster expects sluggish demand to persist across key segments, particularly in the automotive sector, for the remainder of the financial year and anticipates closing the year with a flat revenue momentum. - The Edge Market

PETRONAS signs MoUs to boost technology efficiency

Petroliam Nasional (Petronas), through its Malaysia Petroleum Management (MPM) division, has signed two memoranda of understanding (MoUs) aimed at enhancing technology and operational efficiencies in Malaysia's exploration and production (E&P) sector. The first MoU, signed with Schlumberger WTA (Malaysia) (SLB) focuses on enhancing technical capabilities in artificial intelligence (AI), machine learning and generative AI technologies. The second MoU with Velesto Drilling and NOV Inc establishes a framework to deploy NOV’s drilling automation system and robotics technology on Velesto-operated rigs. Through these partnerships, the Group builds a strong ecosystem to enable access to our PACs. – The Star

KKB bags RM93m contracts from three firms

KKB Engineering (KKB) has secured three new contracts worth RM93m, boosting its growth prospects across multiple sectors. The contracts consist of a long-term agreement with Petroleum Sarawak (Petros), a sub-work with Bina Puri Builder for a water supply project and a purchase order from Greenchain Capital. The new projects will not affect its share capital, expected to contribute to its earnings and net assets over the contract periods. - New Straits Time

Our Thoughts

Wall Street ended higher after the Federal Reserve announced a 25 basis-point rate cut, continuing a rally sparked by Donald Trump's return as U.S. president. The Dow closed flat, while the S&P 500 and Nasdaq rose 0.74% and 1.51%, respectively. At the same time, Fed Chair Jerome Powell expressed confidence in a soft landing for the economy. Key regional indices finished mostly higher, tracking U.S. market strength, as investors looked ahead to a possible second Trump term and an expected Fed rate cut. China and HK’s stocks surged on optimism around potential new stimulus from Beijing. On the domestic front, the FBM KLCI closed marginally lower due to profit-taking activities following several days of uptrend. Nonetheless, the recent rally in the FBM KLCI indicates strong buying interest, signalling a promising short-term rebound opportunity. Malaysia's promising GDP growth forecast, strategic investments, and strengthened ties with global economies could positively influence the stock market in the short to medium term. Sectors like services, manufacturing, and ICT may see increased investor interest, while fiscal stability and targeted subsidies could bolster overall market confidence and drive broader gains. As such we anticipate the FBM KLCI to trend within the range of 1,620- 1,640 for today.

Source: Rakuten Research - 8 Nov 2024

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