MY CLOSING BELL REVIEWS | KLCI CLOSED BEHIND 1450 POINTS AFTER FED MEETING MINUTS

The minutes of the Fed's hawkish meeting overnight shocked global stock markets. The trend of horse stocks declined across the board today, with only construction, maternity capital, industry, and healthcare maintaining gains.

When the market closed at 5 p.m., the FTSE Composite Index closed at 1447.98 points, down 15.53 points, or 1.06%.

The full-day turnover was 4,335,381,500 shares, with a turnover value of RM2,561.39 million 6,349 million.

The FTSE Malaysia All Stock Index reported 10679.57 points, down 90.29 points.

There were 355 rising stocks, 607 falling stocks, 429 with no ups and downs, and 949 with no trades.

At 5 p.m., 1 dollar was converted into ringgit at the level of 4.6523.

China sold 63,676 cars in July, up 27.52% from the same period last year.

The number of cars sold in July was also 1.7% higher than 62,593 units in June. The Malaysian Automobile Dealers Association (MAA) believes that this achievement is due to the normalization of the automotive supply chain and the completion of recent orders for new models.

The association is even more optimistic that total automobile sales in August are expected to be slightly higher than the sales level of July due to the recent introduction of new car models in the automobile industry and the implementation of National Day promotions.

According to data released by MAA today, total automobile sales have reached 429,807 units since the beginning of the year, up 12.61% from 381,680 units last year

In terms of production, production of 60,6862 vehicles was recorded in July, an increase of 28.43% compared to 502,061 vehicles in the same period last year.

Since the beginning of the year, total automobile production has reached 429,397 vehicles, an increase of 16% compared to 36,9994 vehicles last year.

Faced with continued rising costs and the business environment still full of challenges, the Malaysian Real Estate Development Association (REHDA) believes that it is unavoidable for developers to pass on costs, and housing prices may rise.

“Our mission and goal is to build quality, affordable housing in a timely manner. For this reason, when costs rise, we have to pass them on, otherwise they can't continue. ”

This is what REHDA Chairman Dato' Tong Yinkun said today during the industry sector survey for the first half of 2023 and the market outlook for the second half of 2024 and the media briefing on the market outlook for the second half of 2024.

He pointed out that most developers expect construction costs to rise by an average of 15% in the second half of the year.

However, REHDA Vice Chairman Dato' Ho Hansheng also added that developers cannot arbitrarily increase prices; in addition to having to consider various factors, there is also the fact that sales prices will be swayed by banks.

“Because financing approval is very strict, housing prices cannot be raised at will; it is necessary to facilitate banks to provide loan support to buyers.”

According to the survey, the main reasons why completed businesses were not sold include high housing prices, failed loan applications, and the failure to open Aboriginal reservations.

Looking forward to the future, Tong Yinkun said that developers have a moderate view of the domestic economic situation and industrial market prospects in the next 12 months, but are more optimistic about the first half of next year.

“As for next year's views, it's actually difficult to predict the future, but what we can see is that the pandemic is over, which may make us more optimistic, and the state elections (results) aren't frightening.”

He hopes that once these disruptions are reduced, everyone will focus on moving forward, and that the state and federal governments will focus on the development of people, industries, and the economy as a whole.

Furthermore, he said that measures to benefit the people implemented by the government, such as the “Changming Malaysia” economic framework, will also have a positive effect on stimulating industrial market sentiment.

He said that the government's pro-people efforts will boost market sentiment, and the Housing Credit Guarantee Corporation (SJKP) financing plan is expected to support people to buy the industry.

He said 53% of developers plan to launch new projects in the second half of the year. Most of the planned industries are priced between RM151,000 and 300,000, mainly in Kedah, Perlis, Melaka, Pahang, Penang, and Perak.

Looking back at the first half of this year, China's industrial market is actively recovering. Compared with the second half of last year, new launches and sales units have both achieved significant growth.

According to this survey data involving 148 members, a total of 14,392 new units were launched in the first half of the year, an increase of 50%.

Tong Yinkun said that most of the new units are apartments (7183), followed by double- and three-story townhouses (3729), followed by serviced residences (1223).

Meanwhile, he said that sales doubled in the first half of the year, totaling 11,1273 units, of which 35% were newly launched units. Compared to 5087 in the second half of last year.

“The sales performance of condominiums was the best, with a total of 3,749 units sold, followed by 3688 serviced houses, followed by double- and three-story terraced houses, with 2,040.”

He believes that the launch of projects and the increase in sales are positive signs that the industrial market is gradually returning to normal.

“However, a real recovery is still far from within reach, as developers continue to struggle to address unaddressed challenges, such as rising material prices, cross-subsidies, and high compliance and utility costs.”

53% of developers surveyed all faced the problem of slow housing sales in the first half of this year. Among them, the most obvious units selling more than RM1 million accounted for 23%, units between RM700,000 and RM700,000 to RM800,000, and units between RM400,000 and RM400,000 to RM500,000 each accounted for 20% respectively.

Of these, 47% of homes were built and slow to sell within 12 months, while 31% were over 36 months old.

Developers believe the main reasons for slow housing sales include failed loan applications (75%), the failure to open Aboriginal reservations (68%), and housing prices that are too high (51%).

He said that many loan applications have been rejected, which may be a more cautious approach taken by banks based on considerations of the current environment.

According to the survey, 84% of developers took into account the current economic situation and chose to take cost reduction measures, such as freezing recruitment, reducing benefits and allowances, and lowering wages, and adjusting delivery measures, such as rescheduling launch plans, reducing the size of launches, and postponing projects.

The Malaysian Stock Exchange announced yesterday that Southeast Asia Tiles will be exempted from the requirement to submit a PN17 restructuring plan in accordance with listing regulations, and that the PN17 status of the stock will be withdrawn this morning.

The stock once soared to 39 cents in early trading today, up as much as 90.24% from yesterday's closing price of 20.5 cents!

Stock prices followed suit, but by the time the market closed at noon, they had still risen 31.71%, or 6.5 cents, to 27 cents.

Southeast Asia Tiles was included in PN17 in 2019 due to debt default; however, the company's performance has improved recently, recording a net profit of RM1.46 million in the third quarter of FY2023 ending May.

As a result, the company applied for an exemption from submitting a restructuring plan to the exchange in April, which was approved yesterday.

As of the market closure at noon, Pestech International reported 25.5 cents, equivalent to a drop of 3.5 cents, or 12.07%. The stock fell as low as 23.5 cents in early trading to 5.5 cents, or 18.97%.

The terminated contract of Pestech International is a Kuala Lumpur International Airport internal train (Aerotrain) contract received through the subsidiary Pestech Technology (PTSB) in December 2021, worth RM743 million.

According to a statement issued by Malaysia Airport, PTSB's failure to fulfill its contractual obligations seriously affected the progress of the project. There was a risk of delaying the delivery of the project, thus terminating the contract.