This week, investors are waiting cautiously for the Fed’s decision to cut its interest rate

By SULHI KHALID / Pic By TMR File

THE local bourse witnessed a foreign net inflow of RM56.9 million last week as investors wait cautiously for the US Federal Reserve’s (Fed) decision to cut its interest rate.

MIDF Research said in its weekly fund flow report on Monday that it is almost certain for the Fed to cut its policy rate later this week, as signalled by the US dollar money market.

“The Fed is widely expected to cut interest rates by 25 basis points (bps) this month,” MIDF said in the report.

Malaysia’s benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) closed lower on Monday to 1,642 points and has a year-to-date (YTD) negative return of 2.94%.

In exchange, regional equity markets Singapore and Thailand both registered an 8.83% and 9.85% YTD return respectively.

Following the recent developments globally, The Malaysian Reserve takes a peek at the top three gainers and losers throughout July.

G3 Global Bhd
G3 Global saw its market capitalisation reach RM1.2 billion from RM604 million recorded in June, after its shares jumped by 94% as technology stocks were actively traded on the local bourse last month.

The company’s stock hit a four-week high of RM2.90 and a four-week low of RM1.50.

The supplier of Internet of Things-connected objects is said to be in discussions with Chinese firm SenseTime Group Ltd to build the first artificial intelligence park in Malaysia. The total estimated investment for the project is said to be US$1 billion (RM4.12 billion).

G3 Global’s sister company Green Packet Bhd also saw its shares surge 67% for the past one month, reaching a four-week high of RM0.60 from a four-week low of RM0.36. Green Packet is currently trading at RM0.60, valuing the company at RM550 million.

Genting Malaysia Bhd
Genting’s market capitalisation has increased by RM3.92 billion, from RM19.24 billion recorded last month as the casino company resolves its dispute with The Walt Disney Co and 21st Century Fox Inc over its halted outdoor theme park project.

Recapping the event, Fox had entered into a licensing agreement with Genting in 2013 and in November 2018, Disney and Fox pulled out of the contract.

Genting retaliated and sued the international renowned company for over US$1 billion in damages.

Nevertheless, analysts concurred that the theme park is expected to be completed in the first quarter of 2021 (1Q21).

Genting’s share price has surged to reach a four-week high of RM7.03 and a four-week low of RM6.63. On Monday, its share price closed 11 sen lower to RM6.95.

KNM Group Bhd
KNM’s value had increased to RM1.1 billion over the past month as the group bagged a US$4.25 million contract to supply shop-assembled large drums for the petrochemical complex in southern Vietnam.

The investment holding company for renewable energy, power, utilities, refining and petrochemical industries previously inked a contract in Egypt for a deal worth RM36 million on the design and fabrication of air cooler heat exchangers at the Middle East oil refinery in Alexandria.

On Monday, KNM’s share price closed 15 sen lower to RM0.42.

Petronas Chemicals Group Bhd (PetChem)
The biggest loser for the month is PetChem, which saw RM6.4 billion wiped out from its market capitalisation due to the ongoing US-China trade war that has taken a toll on petrochemical prices.

AmInvestment Bank Bhd has maintained its target price of RM7.80 as it expects a rebound in the group’s 2Q19 results, which will be announced on Aug 13, 2019.

“This is further underpinned by average crude oil prices rising 8% quarter-on-quarter from US$64/barrel to US$68/barrel in 2Q19 — notwithstanding generally mixed price movements for ethylene (-12%) and polyethylene (-2%), versus benzene (+14%), polypropylene (+2%) and urea (+2%),” AmInvestment said in a research note.

Last week, its head of commercial Shamsairi Mohd Ibrahim said the group had earmarked US$12 billion over the next 18 years for future deals, with a focus on specialty chemicals.

According to Shamsairi, the group has shortlisted 20 projects in derivatives and specialty chemicals to be potentially developed at the Refinery and Petrochemical Integrated Development project in Pengerang, Johor, and Kerteh, Terengganu.

PetChem’s share price closed three sen lower on Monday to RM7.57.

Petronas Gas Bhd (PetGas)
PetGas’ market capitalisation dropped by RM2.25 billion to RM32.1 billion as the battered local stock market continued to put pressure on the FBM KLCI.

The firm’s shares had hit a four-week high of RM17.50 and a four-week low of RM16.22.

The gas infrastructure and utilities company was in the spotlight in early July as one of its gas processing plants in Paka, Terengganu, was involved in a fire incident.

On Monday, PetGas closed four sen lower to RM16.18.

CIMB Group Holdings Bhd
CIMB saw a total of RM2.33 billion lost in its market capitalisation as its share price dropped 9% over the month.

The financial institution hit a four-week high of RM5.44 and a four-week low of RM5.15. Currently, the stock is trading at RM5.10.

Rakuten Trade Sdn Bhd has placed a target price of RM6.45 as corporate loan activities are expected to gain traction in 2020.

“CIMB’s upcoming results are seen to be within expectations as capital market activities have improved, plus writebacks.

“Top-line is expected to be driven by Islamic financing and fee-based income, but we expect fund-based income to moderate, primarily due to margin pressure,” Rakuten said in a research note.