Buoyed by net foreign fund inflow

Market Review

Malaysia:. The FBM KLCI (+1.0%) advanced yesterday, driven by gains in two-thirds of the key index components as foreign fund inflow continues to thrive. The lower liners also marched higher, while the REIT sector (-0.1%) was the sole underperformer on the positive broader market.

Global markets:. Wall Street remained upbeat as the Dow (+0.7%) recorded its fifth winning streak, boosted by stronger-than-expected earnings from Walmart and Home Depot. The European stock markets extended their gains, while the Asia stock markets ended mostly positive.

The Day Ahead

The FBM KLCI staged a strong breakout, mainly fuelled by buying interest in the telecommunication heavyweights, coupled with the healthy inflow of foreign funds; 5-day net foreign buying stood at RM719.8m. While the global markets may keep an eye on UK’s inflation to gauge the global recession risk, we believe the local bourse should remained positive in the upcoming earnings season as the international border was uplifted in April. Commodities wise, both the crude oil and CPO trended lower, with the former trading around USD92 and the latter hovering slightly above RM4,100.

Sector focus:. As China’s weaker economic data earlier brought recession fears back to the spotlight, the energy sector may see some selling pressure along with the lower oil price. Meanwhile, investors may look at REIT and consumer stocks amid global uncertainties. Also, foreign funds may be eyeing on the telco and banking sectors.

FBMKLCI Technical Outlook

The FBM KLCI breakout to close at intraday high, breaching above its daily EMA120 level. Technical indicators are set to turn positive as the MACD Histogram has rebounded above zero, while the RSI hovered above 50. The key index’s resistance will be set around 1,530-1,560, with the support pegged around 1,480-1,500.

Company Brief

Berjaya Food Bhd (BFood)'s 4QFY22 net profit jumped 184.9% YoY to RM40.7m, mainly due to the higher same-store- sales growth. Revenue for the quarter improved 61.2% YoY to RM291.3m. A fourth single-tier interim dividend of 2.0 sen per share, payable on 22nd September 2022 was declared. (The Star)

Perak Transit Bhd’s 2QFY22 net profit grew 10.4% YoY to RM14.9m, mainly due to higher contribution from the integrated public transportation terminal (IPTT) operations and petrol station operations. A third interim dividend of 0.75 sen per share, payable on 15th November 2022 was declared. Revenue for the quarter rose 20.5% YoY to RM42.1m. (The Star)

Malaysia Airports Holdings Bhd's (MAHB) total passenger movements soared 138.0% YoY to 7.8m in July 2022. International passenger movements recorded 3.1m passengers, reaching 51.3% of pre-pandemic level, while domestic passenger movements recorded 4.7m passengers, reaching 72.2% of pre-pandemic level. (The Edge)

Guan Chong Bhd's 2QFY22 net profit grew 22.6% YoY to RM44.6m, in line with improving grinding margins, apart from being boosted by higher sales tonnage of cocoa ingredients, following a recovery in global chocolate consumption in post pandemic era. Revenue for the quarter gained 36.7% YoY to RM1.20bn. A second interim single-tier dividend of 2.0 sen per share, payable on 10th October 2022 was declared. (The Edge)

Apex Healthcare Bhd's 2QFY22 net profit jumped 83.6% YoY to RM23.5m, on improved operating profit from its subsidiaries as well as a significantly stronger share of net-of-tax earnings from its associated company. Revenue for the quarter rose 14.6% YoY to RM209.2m. An interim single-tier dividend of 3.0 sen per share, payable on 15th September 2022 was declared. (The Edge)

Duopharma Biotech Bhd’s 2QFY22 net profit increased 6.0% YoY to RM16.3m, fuelled by higher sales to the ethical classic market and public health sector. Revenue for the quarter climbed 16.9% YoY to RM181.7m. A first interim dividend of 0.5 sen per share, payable on 14th September 2022 was declared. (The Edge)

GuocoLand (Malaysia) Bhd's 4QFY22 net profit jumped 239.9% YoY to RM23.8m, due to higher contribution from the property development division and lower loss incurred by the hospitality division. Revenue for the quarter grew 29.1% YoY to RM172.1m. (The Edge)

PLS Plantations Bhd intends to invest RM50.0m in a 51:49 joint venture with Landasan Erajaya Sdn Bhd to undertake cash crops plantation activities over land areas located in Pahang, which would enhance the group's cash flow by optimising its large tracts of land assigned for forest plantation. (The Edge)

Swift Haulage Bhd has announced that it is disposing of a 4.8-ha piece of land in located in Bandar Sultan Sulaiman, Klang for RM38.4m. (The Edge)

The Energy Commission has granted MK Land Holdings Bhd a 4-year extension to its power purchase agreement (PPA) for its 10.95-MW Large Scale Solar Photovoltaic Plant in Kerian, Perak. Consequently, the tenure of the PPA will be 25 years after the extension. (The Edge)

Dayang Enterprise Holdings Bhd’s wholly owned subsidiary DESB Marine Services Sdn Bhd has secured a contract from Sarawak Shell Bhd/Sabah Shell Petroleum Co Ltd (SSB/SSPC) for the provision of 1 unit landing craft tank known as Dayang Cempaka. The value of the contract is based on work orders issued by SSB/SSPC approximately within 548 days from 26th September 2022, with a 6-month extension option. (The Edge)

Source: Mplus Research - 17 Aug 2022