MY MARKET WATCHTOWER | KLCI opens MARGINALLY LOWER

Jungle lee wrote a column · Sep 7, 2023 09:41

Stock market outpost

Good morning! Here's what you need to know about today's market:

●US stocks closed: worried that the Fed's interest rate hike has not stopped, US stocks have blackened by nearly 200 points

●Expert: The economy is slowing down, inflation is cooling, and the Bank of China will not raise interest rates this week

●Deutsche Bank: Tesla warns that Q3 vehicle delivery and production will decline

●Anhua: To improve economic relations, Ma Mei should focus on deeper cooperation

●IMF suggests measures for ASEAN to address economic challenges

●Focus on individual stocks: PARAMON, EDARAN, ECOWLD, DESTINI, YTLREIT, PWRWELL

-klse pulse

Overnight US trends

US stocks closed down overnight on Wednesday, with technology stocks leading the decline; US Treasury yields climbed. Investors are worried that the Fed's interest rate hike cycle may not be over yet, as one Fed official said it is still likely that further rate hikes are needed. The Federal Reserve's Beige Book says that economic activity and job market growth are slowing down.

The Dow fell 198.78 points, or 0.57%, to 34443.19 points; the NASDAQ fell 148.48 points, or 1.06%, to 13872.47 points; and the S&P 500 fell 31.35 points, or 0.70%, to 4465.48 points.

As of Wednesday's close, the Dow and the S&P 500 both recorded declines for the second consecutive trading day, while the NASDAQ fell for the third day in a row.

The trend of the Malaysian stock market

The overall performance of Bursa Malaysia is weak. The main reason is that trading sentiment is more cautious, and some investors prefer to cash out and wait and see.

At 9:15 a.m., the FTSE Malaysia Composite Index fell 0.93 points to 1459.69 points.

There were 148 rising stocks, 202 falling stocks, and 305 with no ups or downs.

$FTSE Bursa Malaysia KLCI Index (.KLSE.MY)$

MY MARKET WATCHTOWER | KLCI opens MARGINALLY LOWER

News highlights

IMF proposes 3 measures for ASEAN to address economic challenges

The International Monetary Fund (IMF) recommended that ASEAN countries adopt 3 measures to deal with economic challenges such as inflationary pressure and tight liquidity.

The three measures are to maintain macroeconomic and financial stability, increase investment in education and skills, and invest in the digital and green economy, respectively.

International Monetary Fund Managing Director Kristalina Georgieva pointed out that in order to keep the economy stable and full of vitality, it is recommended that ASEAN member countries maintain macroeconomic and financial stability to ensure that consumers and investors have confidence.

“This (confidence) was very helpful before the COVID-19 pandemic and needs to be maintained.”

Anhua: To improve economic relations, Ma Mei should focus on deeper cooperation

Prime Minister Dato' Sri Anwar suggested that China and the US focus on deeper economic cooperation through investment and trade framework agreements and broad economic participation to develop further cooperation.

He also emphasized the importance of supporting foreign direct investment, the internationalization of micro, small and medium-sized enterprises, promoting green growth to achieve climate sustainability, and ensuring efficient use of resources and food security.

In the field of digitalization, Anwar is also encouraging cooperation between the US and ASEAN to promote the digital transformation of the ASEAN region, including digital infrastructure connectivity, digital inclusion, 5G, and digital data policies and regulation.

As for energy, Anwar said that ASEAN has set a target to increase the share of renewable energy in its energy mix to 23% by 2025. To this end, it hopes to seek support from the US to ensure compliance with the standards.

Focus on individual stocks

Deutsche Bank (Deutsche Bank) analyst Emmanuel Rosner (Emmanuel Rosner) pointed out in an analysis report sent to customers on Wednesday (6th) that major electric vehicle manufacturers $Tesla (TSLA.US)$It was clearly stated at the Munich Law Conference that in the third quarter, the number of production and vehicle deliveries would decrease due to planned global factory shutdowns and upgrades.

The market's current consensus is that Tesla's traffic volume in the second quarter was “flat,” and the company's warning indicates that there is a risk that performance will decline in the third quarter.

Rosner also believes that quarterly profit margins will also be poor because inventory vehicles are sold at reduced prices, plus limited cost savings.

The good news is that Tesla optimistically anticipates that after this season, the facelifted Model 3 can see “solid” demand.

Rosner said that compared to the model that will soon be discontinued, the car after the facelift is expected to help profit due to its lower cost and higher selling price.

$Apple (AAPL.US)$Stock prices fell the most in a month due to reports that China requires central government agency workers not to use iPhones and other foreign-branded devices while working.

The Wall Street Journal quoted people familiar with the matter as reporting that “some” central government agency workers received instructions from their superiors during work groups or meetings asking them to stop bringing such devices into the office.

The newspaper added that it is currently unclear how far the order was issued.

Apple fell 3.6% to $182.91 in the New York market on Wednesday, the biggest drop since August 4.

As of Tuesday's close, Apple's stock price had increased 46% cumulatively this year.

$PARAMON (1724.MY)$Looking ahead to the second half of this year, real estate projects worth RM700 million will be launched.

CEO Zhou Shengzhong said today at the performance briefing for the first half of fiscal year 2023 that industrial sales in the first half of the year reached RM617 million, an increase of 45% year-on-year.

“Additionally, unrecorded sales reached RM1.5 billion, a year-on-year increase of 19%, which also supports the company's future cash flow.”

Asked what kind of residential projects have more potential, he said that compared to high-rise apartments, land-based housing has greater potential.

“Also, throughout the Klang Valley, it is difficult for developers to find 30 to 50 acres of land to build land-based homes.”

$EDARAN (5036.MY)$It was announced that it has been awarded a contract worth RM44.02 million by the Executive Modernization and Management Planning Unit (MAMPU) of the Prime Minister's Department to support the infrastructure and provide maintenance services for the MYGOVCLOUD @PDSA service.

According to the statement, Digital Systems received the above contract from the Malaysian Administration Modernization and Management Planning Unit (MAMPU) under the Prime Minister's Office through a subsidiary, Edaran IT Services Private Limited.

Starting today, the digital system will provide maintenance and support services to relevant units for a period of 48 months.

$ECOWLD (8206.MY)$With an investment of RM21,0605,241, to $IOIPG (5249.MY)$It has acquired approximately 403.78 acres of land in Johor Senai and plans to build a new industrial park project with a total development value (GDV) of RM1.58 billion.

According to the statement, through its subsidiary Eco Business Park 6 Private Limited, Lushengshi reached a deal with IOI Prima Property, a subsidiary of IOI Land, to acquire the land in Johor at a price of nearly RM211.07 million.

Green Sheng Shi plans to develop an industrial park project called “Eco Business Park VI” on related land, targeting medium and light industries. The total development value is estimated at RM1.58 billion.

$DESTINI (7212.MY)$It was announced that the subsidiary was issued a pipeline service contract worth US$488,000 (approximately RM2.289,900) by Northern Gulf Petroleum.

Destini Oil Services Pte. Ltd., a wholly-owned subsidiary that received the contract, will provide casing hammering and column loading services for the Thai Gulf Rossukon project in Block G6/48 of the Rossukan Oilfield in the Gulf of Thailand.

According to the agreement, the subsidiary, as the contractor, shall prepare detailed access procedures and conduct an appropriate risk assessment of the range of access to the casing and tubing.

$YTLREIT (5109.MY)$It was announced that it will spend RM138 million to acquire a hotel called “Hotel Stripes Kuala Lumpur, Autograph Collection” from Hotel 25 Private Limited.

The two parties have signed a purchase and sale agreement. Once the transaction is completed, the hotel will be leased back to Hotel 25. The initial rental period is 15 years, and there is an option to renew the lease for another 15 years.

Yang Zhongli Real Estate Trust stated that the funds will be raised through bank loans and/or internal financing, and the transaction is expected to be completed in the second half of the year.

According to the statement, as of the end of June last year, this 5-star hotel in Kuala Lumpur had an audited net book value of RM48.7 million.

$PWRWELL (0217.MY)$It was announced that a Memorandum of Understanding (MoU) was signed with M Electrical & Engineering Private Limited to acquire 55% of the latter's shares for RM8.25 million, thereby entering the electrical sector.

According to the statement, the company will acquire 55% of M Electrical & Engineering's shares through its subsidiary Powerwell International Private Limited to help lay a solid foundation in the electrical field.

M Electrical & Engineering is mainly engaged in the manufacturing, supply and processing of customized switchboards and panels. Powerwell Holdings will make good use of this business and excellent technology, and combine it with its market position advantages to achieve the best benefits.

“Furthermore, it can also be used to expand the customer base, strengthen operational knowledge, and achieve marketing synergies.”

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#macro matters

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-Source: Nanyang Siang Pau, Bursa Malaysia

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Jungle lee

Currently working at Nanyang Siang Pau. Outside of work, enjoys stay active and exploring new investment opportunities.

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