Hup Seng Industries Bhd's (KL ) shares surged after the company reported record quarterly profits and announced a special dividend. The biscuit maker's stock rose 9.1% to RM1.20 at its peak before settling at RM1.16, valuing the company at RM928 million with 1.7 million shares traded by 9:15 am. BIMB Securities upgraded Hup Seng to a “buy” with a target price of RM1.36, following stronger-than-expected quarterly results. The firm cited Hup Seng’s enhanced production capabilities and solid market positioning as key growth drivers. Earnings projections for FY2024F, FY2025F, and FY2026F were raised by 26.9%, 28.4%, and 30.1%, respectively, driven by an anticipated rise in sales from increased production and market reach. Festive season demand is expected to further boost sales momentum, BIMB noted. However, they cautioned about potential margin pressures due to rising palm oil costs.
Asian equities are poised for a pullback on Thursday, following a broad decline in US markets and increasing caution in the bond market. Futures for share indexes in Japan, Australia, and Hong Kong dipped early Thursday, after the S&P 500 dropped 0.9% and the tech-heavy Nasdaq 100 fell 1.6% on Wednesday.
Meanwhile, the yen steadied after dropping to its lowest level against the dollar in nearly three months, amid fears of potential intervention by Japanese officials. The US 10-year Treasury yield rose, pushing the dollar higher as traders scaled back their expectations of Federal Reserve rate cuts.
Tesla's after-hours rally of 8% on robust earnings provided a silver lining for tech stocks, with an ETF tracking the Nasdaq 100 gaining 0.4% in post-market trading.
Bond yields in Australia also climbed early Thursday, mirroring movements in US treasuries, as concerns over the pace of rate reductions by the Fed grow. The term premium on 10-year US Treasury notes reached its highest level since November, reflecting investor demand for higher yields on long-term debt.
In currency markets, the yen traded around 152 per dollar early Thursday, while Canada’s loonie fell after the Bank of Canada accelerated its easing measures.
Elsewhere, Taiwan Semiconductor Manufacturing Co halted shipments to a client after discovering that chips made for that client ended up with Huawei Technologies, raising concerns over potential US sanctions violations.
Investors are watching key upcoming events, including big tech earnings, October's payrolls report, and the US election, followed by the Fed meeting, which could add further volatility to markets in the coming weeks.
Despite recent challenges, some analysts remain optimistic. Nicholas Colas at DataTrek Research noted that higher yields could be a positive sign for economic growth and corporate earnings in the near term.
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