MY Morning Wrap | Tenaga Nasional Expected to Post Improved 4Q23 Results
Good morning mooers! Here are things you need to know about today's market:
●US Stock Indexes Rise on Strong Economic Data, Defying Recession Projections
●Malaysia's Palm Oil Output May Rise 5% with Admission of New Workers
●Malaysia to See Faster Recovery in Tourist Arrivals, Says Maybank IB Research
●Stocks to watch: TNB, YTL Power
-moomoo News MY
Wall Street Summary
Major US stock indexes rose after the latest economic data showed that the US economy grew at a stronger-than-expected pace in the fourth quarter of last year without an uptick in inflation, defying projections of a recession. The $S&P 500 Index (.SPX.US)$ closed up 0.53% at 4,894, the $Nasdaq Composite Index (.IXIC.US)$ closed up 0.18% at 15,510, and the $Dow Jones Industrial Average (.DJI.US)$ finished up 0.64% at 38,049.
Breaking News
Malaysia's Palm Oil Output May Rise 5% with Admission of New Workers
Malaysia's palm oil output could rise 5% this year after the government allowed plantations to hire foreign workers, according to Joseph Tek, CEO of the Malaysian Palm Oil Association. The additional workers could harvest an additional 5.2 million tons of fresh fruit bunches, translating into 1 million tons of crude palm oil and generating revenue of close to MYR4 billion ($845 million), providing "significant relief" to the industry, which is facing a chronic shortage of 40,000 workers, the group said. However, the news put pressure on benchmark palm oil futures in Kuala Lumpur trading. The government aims to regulate the admission processes to prevent forced labor, worker exploitation and human trafficking.
Malaysia to See Faster Recovery in Tourist Arrivals, Says Maybank IB Research
Maybank Investment Bank (Maybank IB) Research forecasts Malaysia, Thailand, and Singapore to experience a faster recovery in tourism in 2024 compared to neighboring countries. In a report on the ASEAN tourism sector, the research firm predicts visitor arrivals to ASEAN-6 (Indonesia, the Philippines, Singapore, Thailand, Vietnam, and Malaysia) to recover to 98% of pre-pandemic levels by year-end, with total visitor arrivals expected to grow by about 27%. However, for the full year, visitor arrivals in ASEAN-6 countries are expected to be about 10% below 2019 pre-pandemic levels. Maybank IB expects the recovery to be marginally stronger in Malaysia and Singapore and slowest in the Philippines. The research firm cited data from Malaysia's tourism authority, which showed visitor arrivals to Malaysia recovered to 89% of pre-pandemic levels by September 2023.
Stocks to Watch
$TENAGA (5347.MY)$: Tenaga Nasional Bhd (TNB) is expected to post improved financial results in its fourth quarter ended Dec 31, 2023, as it should be able to buffer higher year-end expenses with more stable fuel costs during the period, according to UOB Kay Hian (UOBKH) Research. The power utility should be able to reverse the negative fuel margins it faced in the nine months of 2023, as coal prices had stabilised in the period. TNB is expected to book higher year-end expenses arising from general, repair and maintenance costs, but UOBKH Research expects 4Q23 net profit to come in at MYR1 billion in the absence of a negative fuel margin.
$YTLPOWR (6742.MY)$: YTL Power International Bhd's data centre business is "underappreciated" and valued at RM6.3 billion or one-fifth of the group's total market value of over RM32 billion, according to Hong Leong Investment Bank (HLIB) Research. The valuation is based on a "conservative" 150-megawatt capacity of YTL Power's data centre arm, YTL Data Center Holdings Pte Ltd (YTLDC), benchmarked to Singapore's Keppel DC Real Estate Investment Trust (REIT), which is at the "lower end of peers' comparison." HLIB Research said data centres will be YTL Power's next phase of growth, but the segment remains underappreciated due to lack of details and understanding among investors.
$LBS (5789.MY)$: LBS Bina Group has successfully issued its first tranche of ASEAN Social SRI Sukuk Wakalah, amounting to MYR200 million in nominal value under its newly established MYR750 million Sukuk Wakalah Programme. The first tranche was priced at a yield of 5% with a periodic distribution rate of 5% per annum, secured and has a tenure of five years from the issue date. The final order book for the first tranche was approximately MYR1.276 billion, representing an oversubscription rate of 6.38 times, demonstrating robust investor demand and confidence towards LBS. The proceeds will be tagged to affordable housing, making LBS the first real estate developer in Malaysia to issue an ASEAN Social SRI Sukuk Wakalah.
$WASCO (5142.MY)$: Wasco Bhd's earnings in the fourth quarter of 2023 could surprise on the upside on the back of better-than-expected margins with more pipe-coating works having been carried out, according to CGS-CIMB Research. The energy infrastructure group also has a healthy tender book of MYR7 billion to underpin sustained growth, with awards for several key projects in Malaysia, Qatar and the United Kingdom expected towards the second half of 2024. Wasco delivered strong results for the nine-month period of 2023, with normalised net profit increasing by 61% year-on-year to MYR60.2 million, driven primarily by a turnaround in its associates and joint ventures and lower taxes.
$UOB (U11.SG)$: United Overseas Bank (M) Bhd (UOB Malaysia) has established its inaugural RM5 billion Islamic debt programme under the syariah principle of Wakalah Bi Al-Istithmar and announced the successful pricing of its debut RM500 million Basel III-compliant tier-two subordinated Islamic medium-term notes (Tier 2 Sukuk Wakalah) due in February 2034. During the book-building exercise, the Islamic debt offering was oversubscribed by approximately 3.39 times, and the final order book of MYR1.7 billion enabled UOB Malaysia to close at a fixed profit rate of 4.01% per annum, with the tightest spread ever recorded for a tier two capital instrument in the ringgit-denominated market to date.
$MAHSING (8583.MY)$: Mah Sing Group's expansion into plastic manufacturing in Indonesia will have a minimal impact on its earnings in the near term, according to Hong Leong Investment Bank Research. The plastic segment currently has a pre-tax profit margin of 7%-8% and the Indonesian venture is expected to have a similar cost structure as Malaysia. The additional 10% capacity from the expansion is expected to increase the group's earnings by around MYR1.96 million a year or 0.08 sen earnings per share, which is 0.98% of the company's financial year 2024 earnings forecast. The regional expansion supports Mah Sing's target to list its manufacturing segment within three years.
Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE
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