MY Morning Wrap | CelcomDigi Proposes to Lead Malaysia's Second 5G Network Deployment

Moomoo News MY wrote a column · Aug 1, 2024 08:46

Good morning mooers! Here are things you need to know about today's market:

●Tech Sector Rallies with Historic Gains Following Strong AMD and Meta Earnings

●Malaysia's MOF Confirms Diesel Subsidy Policy Unlikely to Impact Inflation and Growth Forecasts

●Malaysia's MSME Sector Shows Robust Growth, Poised to Meet Economic Targets

●Malaysia's Manufacturing Sector Hits RM1.89 Trillion in 2022

●Stocks to watch: CelcomDigi, Yong Tai, Zen Tech

-moomoo News MY

MY Morning Wrap | CelcomDigi Proposes to Lead Malaysia's Second 5G Network Deployment

Wall Street Summary

The stock market experienced a notable rebound on Wednesday, driven by a surge in the technology and semiconductor sectors following Advanced Micro Devices (AMD)'s impressive earnings report. The positive momentum continued post-market as Meta's earnings further bolstered investor confidence. Nvidia, in particular, made history by adding $329 billion to its market capitalization, marking the largest one-day gain ever recorded for a single stock. Despite a general pullback on Tuesday, the market recovered robustly on Wednesday morning, with the $S&P 500 Index (.SPX.US)$ climbing 1.91%, the $Dow Jones Industrial Average (.DJI.US)$ increasing by 0.93%, and the $NASDAQ 100 Index (.NDX.US)$ seeing a significant jump of 2.8% just past 11:30 am ET.

Breaking News

Malaysia's MOF Confirms Diesel Subsidy Policy Unlikely to Impact Inflation and Growth Forecasts

The Ministry of Finance (MOF) of Malaysia has announced that the newly implemented targeted diesel subsidies are not expected to significantly affect the country's inflation rates or economic growth projections. In response to a parliamentary inquiry, the MOF clarified that the current inflation forecast for 2024 will remain stable at 2.0% to 3.5%, and the growth outlook for the gross domestic product (GDP) is maintained at 4.0% to 5.0%. The targeted approach to diesel subsidies aims to minimize leakage by directing support specifically to low and medium-income groups and excluding ineligible recipients such as foreign citizens, large corporations, and high-income earners. The MOF further detailed the strategy behind the diesel subsidy retargeting, which allocates cash assistance of RM200 per month to 300,000 qualified individuals, primarily pickup truck users. In contrast, due to the larger number and varied consumer base of RON95 petrol users, a different approach would be required if cash assistance were to be considered for them.

Malaysia's MSME Sector Shows Robust Growth, Poised to Meet Economic Targets

Entrepreneur Development and Cooperatives Minister Datuk Ewon Benedick has reported positive growth within Malaysia's micro, small, and medium enterprises (MSMEs), signaling a significant scale-up in the sector. Despite a 16.9% reduction in micro-sized businesses, the number of small and medium-sized enterprises has risen by 35.8% and 7.9%, respectively. MSMEs, which comprise 96.9% of all businesses in Malaysia, have demonstrated resilience in the face of challenging conditions and are on track to meet the goal of contributing 41% to the GDP by 2025 as outlined in the 12th Malaysia Plan. With the MSME sector's contribution to the GDP growing by 5% in 2023 and outpacing the overall GDP growth, the focus remains on the services and manufacturing sectors. To further support MSMEs, the ministry plans to conduct engagement sessions to gather input for Budget 2025 and sustain the sector's performance, with upcoming sessions in Kuala Lumpur and Sabah for stakeholders in Peninsular Malaysia and East Malaysia, respectively.

Malaysia's Manufacturing Sector Hits RM1.89 Trillion in 2022

Malaysia's manufacturing sector showed significant growth in 2022, with a gross output value of RM1.89 trillion, as reported by the Department of Statistics Malaysia (DOSM). The increase was propelled by the petroleum and electronics sub-sectors, responding to global demand spikes. The sector's expansion included more establishments and higher value-added gains, with notable salary growth in skilled positions. Key regions such as Selangor and Johor led the output, showcasing the sector's strong contribution to the national economy.

Stocks to Watch

$CDB (6947.MY)$: CelcomDigi Bhd has officially expressed its intention to spearhead the construction of Malaysia's second 5G network by submitting a proposal to the Malaysian Communications and Multimedia Commission. Following a recent acquisition of a 16.3% stake in Digital Nasional Bhd's single wholesale network model, CelcomDigi is poised to build what they describe as "the most advanced 5G network" in the country. As of now, CelcomDigi stands as the sole telco operator to publicly declare interest in managing the upcoming 5G infrastructure project.

$YONGTAI (7066.MY)$: Yong Tai Bhd has announced the sale of its luxury hotel, Courtyard by Marriott Melaka, to Southern Envoy Sdn Bhd for RM160 million. The transaction, conducted through its subsidiary Apple 99 Development Sdn Bhd, is expected to net the company a gain of RM45.86 million. Alongside this sale, Yong Tai plans to issue up to 190.05 million new shares, representing 30% of its current issued share capital, aiming to raise an additional RM57.02 million. This move is part of the company's strategy to attract third-party investors, details of which will be specified at a later date.

$ZENTECH (0094.MY)$: Bursa Malaysia Securities Bhd has reprimanded Zen Tech International Bhd and eight directors for falsely claiming to be a Covid-19 vaccine distributor and for violations in their 2021 annual report and corporate governance practices. The directors collectively face fines totaling RM757,500 as a penalty for these infractions. This action underscores the bourse operator's commitment to maintaining accurate representations and adherence to regulatory standards among listed companies.

$AVI (8885.MY)$: Baker Tilly Monteiro Heng PLT, the external auditor for Avillion Bhd, has expressed material uncertainty over the hotel and travel company's ability to continue operations. Despite Avillion's businesses running at full capacity, the auditor pointed to significant net losses—RM5.55 million at the group level and RM6.81 million at the company level for the fiscal year ending March 31, 2024 (FY2024). These losses cast doubt on the company's financial sustainability and its future as a going concern.

$BINTAI (6998.MY)$: Bintai Kinden Corp Bhd has received the green light from Malayan Banking Bhd for the debt restructuring of its wholly owned subsidiary, Kejuruteraan Bintai Kindenko Sdn Bhd. With only two months remaining to present its regularisation plan, the approval is a positive step forward. The restructuring entails converting the subsidiary's existing contract overdraft and trade bills into a term loan. Additionally, an overdraft facility of RM6.9 million will be reinstated, along with a bank guarantee facility worth RM10 million, to support the subsidiary's financial stability and operational requirements.

$LCTITAN (5284.MY)$: Lotte Chemical Titan Holding Bhd continues to face challenges as it reports its ninth straight quarterly loss. However, there's a silver lining as the company has managed to narrow its net loss to RM248.9 million for the second quarter ended June 30, 2024 (2QFY2024), down from RM313.5 million in the same period the previous year. The loss per share has also decreased to 10.93 sen from 13.76 sen. Despite this, the company's revenue fell by 4.3% to RM1.78 billion from RM1.86 billion in 2QFY2023, attributed to a dip in sales volume caused by scheduled statutory maintenance. This maintenance impacted the company's production capacity, reflecting in the reduced revenue.

$INFOM (0265.MY)$: Infomina Bhd, an information technology service provider, has announced the acquisition of a lucrative three-year contract valued at RM34.71 million. The contract, awarded by the Ministry of Home Affairs, tasks Infomina with delivering technology and infrastructure operations and support services to the National Registration Department. This new contract is anticipated to have a positive impact on the company's financial performance throughout the duration of the agreement.

$CENSOF (5195.MY)$: Censof Holdings Bhd has taken a strategic step to reinforce its foothold in the e-invoicing sector by collaborating with Storecove, a company based in the Netherlands. Through its subsidiary, Century Software (M) Sdn Bhd, Censof aims to capitalize on Storecove's adaptable e-invoice solutions, backed by its established expertise and experience in the field. This partnership is expected to streamline Censof's e-invoicing offerings while ensuring full compliance with the regulations set forth by the Inland Revenue Board, thus positioning the company for stronger market presence and growth in e-invoicing services.

$CEB (5311.MY)$: Cape EMS Bhd has been under the spotlight as its stock price plummeted by over 30% within the past week. Amidst the market turbulence, the company's Managing Director and Chief Executive Officer, Christina Tee Kim Chin, made a significant move by selling 1.895 million shares for a total of RM1.27 million. This transaction resulted in Tee's shareholding in the electronics manufacturing services firm decreasing slightly from 38.05% to 37.86%. Despite this, Tee maintains the position of largest shareholder in Cape EMS. Tee's sister, Kim Yok, who serves as the executive director, holds the second-largest share at 6.81%. The share disposal has caught the attention of investors and market watchers, as it comes during a period of notable decline in the company's share value.

Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE

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