Holding well above 1,500

Market Review

Malaysia: The FBM KLCI (+0.1%) managed to recover all its intraday losses, lifted by the quick bargain hunting activities in selected Petronas-related and banking heavyweights. The lower liners, however, extended their decline, while the broader market ended mostly lower with the technology sector (-2.9%) underperformed.

Global markets: Wall Street remained in red as the Dow (-0.6%) fell on the back of concern over the rise of recessionary risk after the US Federal Reserve continues to place priority to tame inflation over economic stability. The European stock markets also declined, while Asia stock markets closed mostly negative.

The Day Ahead

The FBM KLCI eked out marginal gains, outperforming the negative regional markets as selling pressure subsided after the morning session selldown. Still, we expect global market sentiment to remain cautious on the back of persistent concerns over interest rate hikes going forward as the Fed stands firm on its hawkish stance. Meanwhile, on the local front, an increase in Malaysia’s July inflation rate may lead to another Overnight Policy Rate hike by Bank Negara. Commodities wise, the crude oil price surged above USD105 per barrel mark, while the CPO traded above RM4,200.

Sector focus: As Wall Street remained in the bearish undertone overnight, selling pressure may continue in the technology sector, but bargain hunting might emerge. Meanwhile, under the OPR upcycle environment, it could benefit the banking counters. We also see upside potential in energy sector as crude oil price rebounded above USD105.

FBMKLCI Technical Outlook

The FBM KLCI ended marginally higher, staying above its daily EMA9 level. Technical indicators are recovering as MACD Histogram is making a rounding bottom, with the RSI hovering above 50. Resistance is envisaged at 1,530-1,550, while the support is set along 1,450-1,465.

Company Brief

KPJ Healthcare Bhd’s 2QFY22 net profit jumped 288.1% YoY to RM27.1m, on higher bed occupancy rate. Revenue for the quarter rose 11.8% YoY to RM707.6m. An interim dividend of 5.5 sen per share, payable on 21st October 2022 was declared. (The Star)

Public Bank Bhd’s 2QFY22 net profit increased 2.4% YoY to RM1.42bn, on lower loan impairment allowances. Revenue for the quarter improved 1.1% YoY rose to RM4.97bn. A first interim dividend of 8.0 sen per share, payable on 23rd September 2022 was declared. (The Star)

RHB Bank Bhd's 2QFY22 net profit fell 9.5% YoY to RM634.8m, dragged by lower non fund based income and higher operating expenses. Revenue for the quarter, however, rose 2.0% YoY to RM2.99bn. An interim dividend of 15.0 sen per share, comprising a 10.0 sen cash payout and a 5.0 sen electable portion under the dividend reinvestment plan was declared. (The Star)

OSK Holdings Bhd’s 2QFY22 net profit rose 2.5% YoY to RM106.2m, as the property segment and capital financing division continued to be major profit contributors for the group. Revenue for the quarter gained 25.2% YoY to RM334.7m. A single tier interim dividend of 2.0 sen per share, payable on 6th October 2022 was declared. (The Star)

Ta Ann Holdings Bhd’s 2QFY22 net profit expanded 24.1% YoY to RM92.0m, mainly attributed to higher average selling prices achieved for crude palm oil, fresh fruit bunches and plywood products. Revenue for the quarter grew 43.7% YoY to RM654.2m. A third interim dividend of 15.0 sen per share, payable on 5th October 2022 was declared. (The Edge)

Mah Sing Group Bhd’s 2QFY22 net profit rose 6.5% YoY to RM43.0m, driven by the group's successful launches of new parcels of affordably priced homes and good take-up of its other ongoing projects. Revenue for the quarter grew 23.6% YoY to RM542.0m. (The Edge)

TIME dotCom Bhd's 2QFY22 net profit rose 27.6% YoY to RM118.3m, propelled by higher revenue growth from both its data and data centre product segments as well as larger net gain on foreign exchange amounting to RM27.1m. Revenue for the quarter grew 7.6% YoY to RM373.6m. (The Edge)

Malaysian Pacific Industries Bhd's (MPI) 4QFY22 net profit rose 7.2% YoY to RM80.5m, helped by double-digit contributions from all of its geographical segments. Revenue for the quarter climbed 13.9% YoY to RM612.0m. (The Edge)

Solarvest Holdings Bhd's 1QFY23 net profit soared 24.9x YoY to RM4.3m, as construction activities continued to pick up following the country's transition to the endemic stage of Covid-19. Revenue for the quarter jumped 131.5% YoY to RM52.7m. (The Edge) Mentri Besar Terengganu (Incorporated), a Terengganu state-owned company, is looking into acquiring a 5.0% stake in PCG PCC Oxyalkylates Sdn Bhd. The company is a joint venture between Petronas Chemicals Group Bhd and German firm PCC SE, and is principally involved in the production of chemical feedstocks and specialty chemicals production. (The Edge)

Source: Mplus Research - 30 Aug 2022