MY Morning Wrap | Scientex Aborts RM548 mil Johor land Buy from S P Setia

Moomoo News MY wrote a column · Jan 8, 2024 08:32

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

●US stock indices make modest gains on Friday but close the week in the red

●Construction industry to see growth and improved margins in 2024

●HLIB expects property sector to moderate in 2024

●Malaysia embraces revitalized southern corridor economic prospects

●Stocks to watch: Scientex, S P Setia, MYEG

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MY Morning Wrap | Scientex Aborts RM548 mil Johor land Buy from S P Setia

Wall Street Summary

U.S. stocks concluded Friday's trading session with modest gains, though the uptick failed to offset earlier losses, resulting in major indices closing the inaugural trading week of the year in negative territory. The market's nine-week rally was halted as investor optimism for substantial interest rate cuts waned in light of persistent vigor in the job market, prompting a reassessment of the likelihood of such monetary easing measures. The $S&P 500 Index (.SPX.US)$ edged up 0.2%, ending the session at 4,697.24 on Friday. Meanwhile, the $Nasdaq Composite Index (.IXIC.US)$ saw a marginal increase of less than 0.1%, closing at 14,524.07. The $Dow Jones Industrial Average (.DJI.US)$ experienced a slight uptick of 0.07%, concluding the day at 37,466.11.

Breaking News

Construction industry to see growth and improved margins in 2024

Kenanga Research predicts a margin boost for the construction industry in 2024 with new contracts expected to offset older low-margin ones. The research firm maintains a positive outlook on the sector, backed by inflation-adjusted contracts with protective price escalation clauses. Key public infrastructure projects like the RM45 billion MRT3, alongside vibrant private investments in semiconductors and data centers, are poised to drive growth. Despite a trim in Budget 2024's development expenditure, the government's commitment to major projects and off-balance sheet funding options suggest a bright future for the sector, with Gamuda Bhd, IJM Corp Bhd, and Sunway Construction Group Bhd as top picks.

HLIB expects property sector to moderate in 2024

Hong Leong Investment Bank Bhd (HLIB) indicates a potential moderation in the property sector's growth for 2024, following a robust performance. Analyst Tan Kai Shuen predicts a normalization of sales and billings with GDP growth forecasted to remain moderate. The sector's rating has been adjusted to 'Neutral' as the market may take time to absorb 2023's property launches, though some stocks like Sunway Bhd are still seen as promising.

Malaysia embraces revitalized southern corridor economic prospects

The High-Speed Rail (HSR) initiative is poised to bolster Johor's economic growth and property sector, aligning with national development goals. This transport infrastructure, coupled with the strategic Johor-Singapore Special Economic Zone, aims to attract talent and investment, promising a sustainable and prosperous future for the southern corridor.

Stocks to Watch

$SCIENTX (4731.MY)$: Scientex Bhd's revised bid to acquire a substantial land parcel in Johor Baru from $SPSETIA (8664.MY)$ for RM548 million has been unsuccessful, marking the second failed attempt after a previous effort in 2021 at RM518.1 million. The initial acquisition was hindered by an inability to secure a Bumiputera equity condition waiver from the Economic Planning Unit, leading to a renegotiated offer in July 2023. However, the latest transaction for the 960-acre Tebrau land has been called off due to unmet conditions before the deadline, as reported in recent Bursa Malaysia filings by both companies.

$MYEG (0138.MY)$: MyEG Services Bhd has announced the reinstatement of its online renewal services for foreign workers' temporary work permits (PLKS), effective January 15, following system upgrades as specified by the Home Ministry. Initially, MyEG's three-year immigration services concession was due to end in May of the previous year after an extension from May 2020. The company later confirmed that it had received official correspondence on July 4 from the Home Ministry, substantiating that the Ministry of Finance had consented to prolong the concession period.

$UEMS (5148.MY)$: After nearly a decade of collaboration, UEM Sunrise Bhd, Telekom Malaysia Bhd (TM), and Iskandar Investment Bhd (IIB) have decided to wind down Inneonusa Sdn Bhd, their joint venture aimed at providing smart in-building and smart city services in Iskandar Puteri, Johor. The decision for voluntary dissolution was reached unanimously during an extraordinary general meeting on Friday. With TM holding a 51% stake, UEM owning 39%, and IIB the remaining 10%, both UEM and TM announced in filings to Bursa Malaysia that terminating the JV aligns with their strategies to streamline operations.

$DAYANG (5141.MY)$: Dayang Enterprise Holdings has announced that its subsidiary, Dayang Enterprise Sdn Bhd, has been granted an extension on its maintenance, construction, and modification contract by Mubadala Energy. The extension, effective from July 17, 2023, to December 31, 2024, will have its value determined by the work orders issued over the period of roughly one year and five months.

$CMSB (2852.MY)$: Cahya Mata Sarawak Bhd has disclosed that its subsidiary, Cahya Mata Phosphates Industries, is contending with a RM342.25 million counterclaim from Syarikat Sesco Bhd amid arbitration over a power purchase agreement. Despite the substantial figure, CMS reassures that the counterclaim will not significantly affect its financial standing or operations.

$EMCC (0286.MY)$: Evergreen Max Cash Capital Bhd (EMCC) plans to open two new pawnshops in Sri Petaling, Kuala Lumpur, and Shah Alam, Selangor, increasing their total to 24. EMCC's annual revenue has risen by 63.8% to RM74.8 million, with net profits up by 35.7% to RM10.2 million. Executive Director and Group Managing Director Datuk Low Kok Chuan mentioned that funds from the IPO will be used to open five more pawnshops by 2024.

$TAWIN (7097.MY)$: Ta Win Holdings Bhd, currently facing losses, has proposed a joint venture with Ningbo Kibor Wire & Cable Co Ltd, a Chinese firm specializing in energy cable production, to create solar cables and other wire products. The joint venture, named Cyprium Kibor Tech Sdn Bhd, will see Ta Win's subsidiary Cyprium Capital and Ningbo Kibor each holding a 50% share, with an investment up to RM15 million funded by debt and equity.

$EIB (0255.MY)$: Ecoscience International Bhd's subsidiary, Ecoscience Manufacturing & Engineering, is taking legal action against RDS Marketing Malaysia for an outstanding payment of RM2.38 million. This sum is related to a project involving the construction of a factory, warehouse, office building, and substation in Negeri Sembilan that RDS Marketing has allegedly failed to settle. The ACE Market-listed parent company has initiated proceedings in the High Court to recover the unpaid dues.

$MPAY (0156.MY)$: ManagePay Systems Bhd hasrevealed that its subsidiary, ManagePay Services, is set to partner with PT Finnet Indonesia to offer white label e-wallet and mobile app services. The app, Finpay Money Migrant, will cater to Indonesian migrant workers in Malaysia, enabling them to handle transactions in both ringgit and rupiah, as well as manage social security and compensation claims with BPJS TK.

$GOB (1147.MY)$: Global Oriental Bhd is set to purchase the remaining 45% interest in EdisiJuta Parking Sdn Bhd for RM22.5 million, following its acquisition of a 55% stake last year. The buyout from Edisijuta Sdn Bhd and Cahaya Impian Sdn Bhd, as announced in a recent stock exchange filing, values the car park management company at a price-earnings multiple of 9.9, referencing the RM5.05 million post-tax profit for the fiscal year ending December 31, 2022. The complete ownership of EPSB aligns with Global Oriental's strategy to diversify its portfolio by venturing into the car park operations sector.

$MJPERAK (8141.MY)$: Perak Transit Bhd is set to issue up to 433.64 million bonus shares, offering one bonus share for every two held by shareholders. With a current base of 742.13 million shares and 125.16 million warrants, the theoretical ex-bonus price is projected to be 76 sen, following the share price of RM1.14 on January 2.

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

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