MY Morning Wrap | DXN Holdings Q4 Net Profit Up 43.23% to RM79.02 Million
Good morning mooers! Here are things you need to know about today's market:
●Markets Rebound with Q1 Earnings Underway
●FBM KLCI Rises to Highest in Almost Two Years
●Local Institutions Expected to Absorb Net Selling by Foreign Portfolio Funds on Bursa Malaysia
●Stocks to watch: Capital A, DXN
-moomoo News MY
Wall Street Summary
Indexes held onto gains on Tuesday as Q1 earnings reports began to roll in. The $S&P 500 Index(.SPX.US$ traded up 1.20%, the $Dow Jones Industrial Average(.DJI.US$ climbed around 0.69%, and the $Nasdaq Composite Index(.IXIC.US$ rose 1.59%. Even though Tesla missed earnings expectations, the company still gained after hours.
Breaking News
FBM KLCI Rises to Highest in Almost Two Years
The FBM KLCI rose to its highest level in almost two years, gaining 2.05 points or 0.13% to 1,561.64, with 642 gainers, 402 losers, and 507 counters traded unchanged on the Bursa Malaysia. The performance was buoyed by buying support from index-linked counters led by Maybank, IHH Healthcare, and CIMB Group. Dutch Lady, Allianz, PIE, and Ajinomoto were among the gainers. Malaysian Pacific Industries, Malaysia Smelting Corp, BAT, and Pentamaster were among the losers. Foreign funds and local institutions were net buyers, while local retailers emerged as net sellers. The ringgit was quoted at 4.7778 against the US dollar, while US West Texas Intermediate crude and Brent rose. Meanwhile, Japan's Nikkei 225 added 0.3%, South Korea's Kospi fell 0.24%, China's CSI 300 index fell 0.7%, and Hong Kong's Hang Seng Index surged 1.92%.
Local Institutions Expected to Absorb Net Selling by Foreign Portfolio Funds on Bursa Malaysia
Analysts believe that local institutional investors can absorb the net selling by foreign portfolio funds on Bursa Malaysia and support the local market. Despite the RM1.59 billion in net selling by foreign funds last week, the local benchmark FBM KLCI closed at a 23-month high on fresh buying by local institutions. Local institutions have been net buying for eight consecutive weeks, and they net bought RM1.79 billion worth of local securities last week, which was a six-year high of buying. Although foreign investors have accounted for 30%-39% of trading participation on Bursa Malaysia over the past three months, local institutional investors have accounted for around 30% to 32%. The downside for the local market may be limited, and some companies' fundamentals and valuations are too compelling, providing support to the market. A pivot by the Fed will be a major catalyst for investors to return to EMs like Bursa Malaysia and the ringgit. The upcoming corporate earnings season and government initiatives, including subsidy rationalisation and tax reforms, could influence market sentiment and economic performance in the coming months.
Stocks to Watch
$CAPITALA(5099.MY$: AirAsia Consulting Sdn Bhd, a unit of Capital A Bhd, is still in the pre-qualification stage for the acquisition of Sri Lankan Airlines, according to its CEO Subashini Silvadas. However, AirAsia Consulting has yet to submit a bid, and due diligence has yet to be carried out. Reuters reported that AirAsia is among six bidders for Sri Lanka's state-run carrier, as the nation looks to reduce losses incurred by government-owned enterprises under a US$2.9 billion (RM13.8 billion) International Monetary Fund programme.
$DXN(5318.MY$: DXN Holdings Bhd reported a 43.23% rise in net profit to RM79.02 million for its fourth quarter ended Feb 29, 2024 (4QFY2024), compared to RM55.17 million a year ago. The company's quarterly revenue grew 16.21% to RM470.64 million, primarily due to increased revenue contributions from Latin America and India. For the full year, the group's net profit increased 12.9% to RM310.99 million, while revenue expanded 12.6% to RM1.8 billion. DXN Holdings declared a dividend of one sen per share, payable on May 30.
$KOMARK(7017.MY$: KomarkCorp Bhd is appealing against the High Court's decision in its defamation suit against The Edge Communications Sdn Bhd. The court found that the media company had not defamed KomarkCorp in an article about the manipulation of penny stocks published nearly three years ago. KomarkCorp filed a notice of appeal on April 22.
$TOPMIX(0302.MY$: Topmix Bhd, which was recently listed, closed its maiden trading day with a premium of 11 sen or 35.48% against its initial public offering (IPO) price of 31 sen, with 124.78 million shares traded. The surface decorative company's market capitalisation stood at RM165.42 million at the closing price of 42 sen per share. Topmix Bhd expects its expansion in the northern region of Peninsular Malaysia to boost its earnings growth in the future.
$PAVREIT(5212.MY$: Pavilion Real Estate Investment Trust (PavREIT) has reported that the opening of The Exchange TRX has not affected the footfall at its malls nearby, namely Pavillion KL and the connected Pavilion Elite. The malls are still enjoying over 95% occupancy rates, and they remain PavREIT's largest earnings contributors, accounting for about 77% and 10.3% respectively of its full FY2023 net property income (NPI) of RM459.11 million. While the opening of The Exchange TRX is expected to intensify competition in the malls sector, PavREIT's malls remain resilient.
$KIPREIT(5280.MY$: KIP Real Estate Investment Trust (KIP REIT) has reported a 10.1% rise in net property income (NPI) to RM18.1 million for the third quarter ended March 31, 2024 (3QFY2024), compared to RM16.43 million a year ago. The increase was mainly due to a stronger performance from its retail properties. The company's revenue also rose by 12.5% year-on-year to RM24.55 million from RM21.82 million, driven by higher contributions from its four malls in the central region. KIP REIT declared a distribution per unit of 1.6 sen for 3QFY2024, payable on May 28.
$CYPARK(5184.MY$: Cypark Resources Bhd has announced that its 100MW Large Scale Solar 3 (LSS3) hybrid solar plant project in Merchang, Terengganu, will begin full commercial operations next month, as it achieved initial operations as of April 21. The plant comprises of 83MWac (megawatt, alternating current) ground-mounted solar photovoltaics and 32MWac floating solar photovoltaics. Cypark's executive chair Datuk Ami Moris had previously mentioned in an interview with The Edge that the LSS3 project would generate recurring revenue streams for the group as a 21-year concession asset.
$GADANG(9261.MY$: Gadang Holdings Bhd has announced plans to appeal to the Economic Planning Unit (EPU) for a waiver of the Bumiputera equity requirement to facilitate its acquisition of a 21.08-acre land in Kwasa Damansara. The EPU had rejected the proposed acquisition on Monday as it did not meet the 30% Bumiputera equity ownership requirement. Gadang had earlier entered into an agreement with Kwasa Development (3) Sdn Bhd (KD3) in November 2023 to acquire the land for RM114.78 million, with plans to develop it into a residential project.
$HAILY(0237.MY$: Haily Group Bhd has announced that its wholly-owned subsidiary, Haily Construction Sdn Bhd, has secured a contract worth RM109.5 million to construct and complete 332 units of double-storey terrace houses in Pontian, Johor. The contract was awarded by Mandy Corp Sdn Bhd, a wholly-owned subsidiary of Gadang Holdings Bhd. The value of the contract is higher than Haily's market value of RM93.62 million. This is the fourth contractor project award for Haily since the start of 2024, and the total contract value amounts to approximately RM247.09 million.
$INTA(0192.MY$: Inta Bina Group Bhd has been awarded a contract worth RM169.67 million from Next Delta Sdn Bhd to develop a serviced apartment project in Country Heights. The scope of work involves the construction of two blocks of serviced apartments, one podium block comprising parking lots and facilities, as well as a guard house in Tropicana Metropark, Country Heights. The construction period is expected to be 33 months from the commencement date.
$COMFORT(2127.MY$: Comfort Gloves Bhd has reported a fire outbreak at its three-storey warehouse and packing department in Taiping, Perak on Tuesday morning. The cause of the fire and the extent of the damage are yet to be determined, but the company has confirmed that there were no casualties or fatalities, and its production line was not affected. Comfort Gloves added that a preliminary assessment indicates that the fire incident would not have a significant impact on the financials and operations of the group.
$AHB(7315.MY$: AHB Holdings Bhd has announced that its planned acquisition of a 51% stake in automotive distributor CAF Motor Sdn Bhd has been mutually terminated due to unfulfilled precedent conditions. AHB had entered a non-binding term sheet with CAF Motor's sole shareholder, CAF Global Tech Sdn Bhd, in July 2023 for the acquisition. The 51% stake was valued at RM10 million. AHB added that the termination of the term sheet would not have any financial impact on the company and its subsidiaries.
Source: Dow Jones Newswires, Bursa Malaysia, The Malaysian Reserve, The Star, The EDGE
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