KUALA LUMPUR (Aug 21): Hap Seng Consolidated Bhd and YTL Power International Bhd traded higher on Monday (Aug 21), after FTSE unveiled that it will be adding the stocks into the small-cap category of its Asia Pacific ex Japan ex China Index in the semi-annual review in September.

Hap Seng, one of Mercedes-Benz's dealers in Malaysia, saw its share price rise as much as 13.6% to RM3.76 in the afternoon session, the highest level since May 30, when the stock was on a steep downtrend from its year-to-date high (YTD) of RM7.19 on Jan 31.

At the close, the counter settled at RM3.73, still up 42 sen or 12.7%, with 13.64 million shares traded, valuing the group at RM9.29 billion. The stock was the biggest gainer across all Bursa securities.

YTL Power, meanwhile, rose as much as 10.6% to an intraday high of RM1.88, before paring gains to close at a record RM1.80, still up 10 sen or 5.9%, valuing it at RM14.68 billion, with 56.63 million shares done.

The rally came days ahead of the release of Hap Seng’s financial results for the second quarter ended June 30, 2023 (2QFY2023), which is estimated to fall on Friday, according to Bloomberg. YTL Power is also scheduled to release its financial results for the fourth quarter ended June 30, 2023 on the same day.

YTL Power’s ascent was an extension of its uptrend since the beginning of the year, as defensive earnings prospects for its utilities businesses in Singapore and the UK, coupled with new data centre and digital banking ventures, excited investors, propelling its share price to record a YTD gain of more than 140%.

Hap Seng’s rebound, meanwhile, seemed nascent for a stock that had dwindled 70% YTD, amid news that it was removed from the MSCI Malaysia Index in May, followed by Mercedes-Benz's intention to implement an agency model in selling its luxury marques, replacing the dealership model by year end.

Hap Seng announced to Bursa Malaysia last month that the two parties had signed agency and service dealer agreements, which will come into force in September.

From Sept 1, subsidiary Hap Seng Star Sdn Bhd will be appointed as a non-exclusive agent to broker sales of Mercedes-Benz passenger vehicles, and to support Mercedes-Benz in the performance and fulfilment of its direct sales to end customers in Malaysia.

Hap Seng Star will also be appointed as a non-exclusive service dealer for the service of Mercedes-Benz passenger vehicles in Malaysia.

For 1QFY2023, Hap Seng, which is also involved in plantation and property businesses, reported a 67% drop in net profit to RM50.77 million, from RM156.3 million a year ago, as lower palm oil prices and a subdued real estate market dragged profitability.

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