MY Morning Wrap | MISC Records 19.43% Increase in Net Profit for Q2FY2024 Amidst Revenue Decline
Good morning mooers! Here are things you need to know about today's market:
●Market Rallies on Powell's Comments; Investors Eye PCE Data and NVIDIA Earnings
●Malaysia's Economic Indicators Show Growth in June 2024
●Malaysia's Unemployment Decreases in Q2 2024, Labor Market Shows Strength
●Stocks to watch: MISC, Sime Darby Property, Keyfield, S P Setia
-moomoo News MY
Wall Street Summary
Investors celebrated a Happy Friday as markets surged following Federal Reserve President Jerome Powell's optimistic remarks at the Jackson Hole Economic Symposium. Powell's speech, which investors interpreted as dovish, fell just short of signaling a rate cut in September, propelling indexes towards near-record levels. The market's positive response set a buoyant tone ahead of key events next week, which include the Personal Consumption Expenditures (PCE) index release and NVIDIA's earnings report. The trading session concluded with the $S&P 500 Index (.SPX.US)$ up by 1.15%, the $Dow Jones Industrial Average (.DJI.US)$ increasing by 1.14%, and the tech-heavy $NASDAQ 100 Index (.NDX.US)$ leading the gains with a 1.47% rise as of the 4 pm ET close.
Breaking News
Malaysia's Unemployment Decreases in Q2 2024, Labor Market Shows Strength
The Department of Statistics Malaysia (DOSM) released the Labour Market Review for Q2 2024, highlighting a continued decline in unemployment and robust labor demand in the economic sector. The labor force saw a 2.5% growth, reaching 17.15 million persons, with employed individuals increasing by 2.8% to 16.59 million. Unemployment figures dropped by 4.1% to 557,800, maintaining an unchanged unemployment rate of 3.3% for the third consecutive quarter. This labor market strength contributed to Malaysia's economy growing at 5.9% year-on-year, supported by rising household spending, robust exports, and potential foreign investments. The labor force participation rate also increased to 70.5%, and there was a decrease in time-related underemployment. Additionally, labor productivity improved, with value added per employment up by 3.1%, and total hours worked in the quarter increased by 3.4%, leading to a higher value added per hour worked.
Malaysia's Economic Indicators Show Growth in June 2024
Malaysia's Leading Index (LI), which forecasts economic trends four to six months in advance, exhibited a positive trajectory with a 3.5% year-over-year increase to 113.4 points in June 2024, as per the Department of Statistics Malaysia (DOSM). This growth was primarily driven by a 42.2% surge in the Bursa Malaysia Industrial Index. Despite this annual rise, the LI saw a slight monthly decline of 0.7%, with five of its seven components experiencing downturns, except for the Bursa Malaysia Industrial Index and Real Money Supply, M1. The smoothed long-term trend for June 2024 indicated that the economy is on a sustainable and resilient growth path, as the LI stayed above the 100-point threshold. The DOSM emphasized that Malaysia's consumer-driven economy could receive a further boost from the salary revision initiative, encouraging domestic spending.
Concurrently, the Coincident Index (CI), which reflects the current economic activity, continued its upward trend since September 2021, marking a 2.6% gain to 126.4 points in June 2024. The CI's positive movement was largely attributed to real contributions from the EPF and a 6.4% increase in the Volume Index of Retail Trade. Despite a minor monthly increase of 0.2% in the CI, all components rose except for Capacity Utilisation in Manufacturing, which fell slightly.
Stocks to Watch
$MISC (3816.MY)$: MISC Bhd has reported a significant 19.43% surge in net profit for the second quarter of the fiscal year 2024, reaching RM540.9 million compared to RM452.9 million in the corresponding period last year. This improvement in profitability is largely attributed to enhanced performance in its marine and heavy engineering operations, alongside gains in the petroleum and product shipping segment. Despite this, the company's revenue saw a 6.2% decline, falling to RM3.33 billion from RM3.55 billion, a drop that can be traced back to reduced earnings from ongoing projects and the expiration of contracts. In light of its financial results, MISC Bhd has announced a second interim dividend of eight sen per share, scheduled for distribution on September 26. This announcement brings the total dividend handed out for FY2024 thus far to 16 sen per share.
$SIMEPROP (5288.MY)$: Sime Darby Property has projected a significant uptick in the occupancy rate for Phase 3B of the Battersea Power Station development in the UK, anticipating an increase from the current 20% to a range between 50-80% by the next year. This anticipated growth in occupancy is expected to mitigate the adverse consequences of an accounting rule that contributed to a larger joint-venture loss of RM87.9 million in its second quarter financial results for fiscal year 2024. The company has expressed confidence that the impact of this accounting rule will diminish, with no substantial effects foreseen for the remainder of the year. This optimism is bolstered by recent positive developments, including a rate cut in the UK, which Sime Darby Property believes could enhance the attractiveness and performance of its investment in the iconic Battersea Power Station project.
$KEYFIELD (5321.MY)$: Keyfield International Bhd, an oil and gas services company, has announced the successful acquisition of a contract valued at RM48 million. The deal involves providing an accommodation workboat, with the primary charter commitment starting in August worth RM34.6 million and an additional option for extension valued at RM13.4 million. The contract encompasses not only the workboat but also the necessary crew and on-board services. This new contract is anticipated to be a significant contributor to Keyfield's earnings and net asset value for the fiscal year 2024, potentially bolstering the company's financial position and enhancing shareholder value. The secured contract reflects Keyfield's ongoing commitment to expanding its presence in the oil and gas industry and its ability to secure valuable service agreements.
$SPSETIA (8664.MY)$: S P Setia Bhd has officially addressed and dismissed the circulating rumors regarding the departure of their top executive, Datuk Choong Kai Wai, affirming that he continues to serve as the President and CEO of the company. S P Setia Bhd has expressed its unwavering commitment to reaching its strategic objectives with Choong at the helm. The company is confident in his leadership abilities and anticipates his ongoing contributions to be instrumental in driving the company's success and growth. This clarification reinforces the stability of S P Setia Bhd's leadership and serves to reassure stakeholders of the company's direction and management continuity.
$ALLIANZ (1163.MY)$: Allianz Malaysia Bhd's financial performance in the second quarter of the fiscal year 2024 saw a marginal increase in net profit by 0.21%, amounting to RM167.02 million, compared to RM166.67 million in the same period last year. This negligible growth in profit comes in the face of a rise in claims related to fire and engineering losses. However, the company benefited from better results in the investment-linked protection business and an increase in net investment income. The company's revenue enjoyed a significant boost of 17.7% year-on-year, reaching RM1.37 billion, largely attributable to higher insurance revenue from both life and general insurance segments. No dividends were declared for this quarter, reflecting a cautious stance amidst the mixed financial outcomes.
$HIBISCS (5199.MY)$: Hibiscus Petroleum Bhd has taken a strategic step to enhance its asset base by having its subsidiary, Straits Hibiscus Sdn Bhd, enter into a farm-in arrangement with Petronas Carigali Sdn Bhd for a 30% interest in the Block PM327 production sharing contract. The completion of this acquisition is contingent upon receiving the necessary regulatory approvals and fulfilling other customary conditions. This move signifies Hibiscus Petroleum's commitment to growing its presence in the oil and gas sector and diversifying its portfolio of assets.
$TM (4863.MY)$: Telekom Malaysia Bhd (TM) announced the termination of its agreement to acquire a stake in Digital Nasional Bhd (DNB), following DNB's refusal to grant an extension for TM to obtain approval from its shareholders. Despite this setback, TM assured that its 5G services will continue uninterrupted, as the company maintains its wholesale subscription agreement with DNB for 5G services.
$UCHITEC (7100.MY)$: Uchi Technologies Bhd observed a 13.38% increase in net profit for the second quarter of the fiscal year 2024, hitting RM32.17 million, up from RM28.37 million reported in the previous year. The profit boost is largely attributed to the appreciation of the US dollar against the Malaysian ringgit. While its revenue saw a slight rise of 2.15% to RM59.06 million, the company's revenue in US dollar terms actually fell by 3% to US$12.5 million, reflecting a dip in sales demand for its offerings. Despite the mixed performance, Uchi Technologies has declared a first interim dividend of 6.5 sen per share, to be paid on September 26, cumulatively bringing the dividend payout for the year to date to eight sen.
$SPTOTO (1562.MY)$: Sports Toto Bhd reported an 8.4% increase in net profit for the fourth quarter ending June 30, 2024, reaching RM67.6 million, compared to RM62.3 million the previous year. The growth is attributed to the robust performance of STM Lottery Sdn Bhd, its main subsidiary. The company's revenue also saw a modest rise of 2.1% year-on-year to RM1.65 billion. Despite the profit growth, Sports Toto declared a fourth interim dividend of two sen per share, which is lower than the 2.5 sen per share from the same quarter last year, to be paid on October 18. The total dividends for FY2024 sum up to 10 sen per share, an increase from the nine sen per share distributed in the previous fiscal year.
$D&O (7204.MY)$: D&O Green Technologies Bhd experienced a significant leap in its net profit for the second quarter of the fiscal year 2024, soaring to RM7.76 million, an increase of nearly 11 times from the RM716,000 reported in the same period last year. This remarkable profit surge is attributed to a 20.76% rise in revenue to RM265.63 million, up from RM219.97 million in 2QFY2023, with the automotive segment being a key driver of growth. The company's success during the quarter is linked to securing new design wins, particularly in the advanced "Smart LED" ambient lighting, and innovations in rear combination lamps and headlamp technology. However, the company did not declare a dividend for this quarter.
$KIPREIT (5280.MY)$: KIP Real Estate Investment Trust (KIP REIT) has announced its third acquisition for the year by purchasing a plot of land spanning 4,663 square meters in Gerik, Perak, for RM14.8 million. The acquired property hosts a single-storey hypermarket currently leased to TF Value-Mart. The investment will be financed through bank borrowings, with KIP REIT stating that the acquisition will have a minimal effect on the trust's financing ratio.
Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE
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Malik ritduan : sturdy