Mild improved sentiment

Market Review

Malaysia:. The FBM KLCI (+0.2%) eked out mild gains that was driven by Petronas related heavyweights yesterday, while the political situation remains clouded by uncertainty. The lower liners closed mixed, while the energy sector (+2.0%) led the mostly positive sectorial peers.

Global markets:. The Wall Street extended their lead as the Dow (+0.3%) rose after the latest FOMC minutes meeting indicated that most officials are backing for a moderation of interest rate hikes in near future. The European stockmarkets also advanced, while Asia stockmarkets closed mostly positive.

The Day Ahead

The FBM KLCI eked out small gains in a volatile session amid mixed sentiment due to the fluid situation on the political scene. Optimism surrounding the slowdown in rate hikes indicated in the FOMC minutes may spread across the regional markets. Given the UMNO Supreme Council has given the support to a unity government ensuring the stability of the country, we believe the market may turn more positive. Meanwhile, investors could shift their focus from politics to Malaysia’s inflation rate and the on-going reporting season. Commodities wise, the Brent oil tumbled to around USD85/bbl as European Union discussed imposing a price cap on Russian oil between USD65-70. Meanwhile, the CPO price stayed above RM4,000.

Sector focus:. Technology stocks could be on investors’ radar given the uptrend move on Nasdaq. Investors may lookout for decent energy counters with the anticipation of stronger earnings this quarter. Besides, we expect the sin counters to be in the spotlight as the market could be anticipating a PH-led government.

FBMKLCI Technical Outlook

The FBM KLCI edged higher but the key index continued to hover below its daily EMA20 level. Technical indicators, turned mixed as the MACD Histogram extended a positive bar, while the RSI climbed above 50. Resistance is monitored along 1,480-1,500, while the support is set at 1,420-1,430.

Company Brief

Malayan Banking Bhd’s (Maybank) 3QFY22 net profit rose 28.5% YoY to RM2.16bn, amid the loans growth in key business segments across the bank’s home markets within a rising rate environment. Revenue for the quarter gained 20.4% YoY to RM13.42bn. (The Star)

Genting Plantations Bhd’s 3QFY22 net profit slipped 26.1% YoY to RM75.5m, on account of higher production costs. Revenue for the quarter, however, rose 12.2% YoY to RM822.4m. (The Star)

ECA Integrated Solution Bhd made a strong debut on the ACE Market of Bursa Malaysia Securities Bhd at 65.0 sen, which is a 282.4% premium to its initial public offering (IPO) price of 17.0 sen. (The Edge)

Tenaga Nasional Bhd’s (TNB) 3QFY22 net profit dropped 13.7% YoY to RM888.9m, dragged down by higher foreign currency translation losses, finance cost and Cukai Makmur (prosperity tax). Revenue for the quarter, however, grew 46.9% YoY to RM19.07bn. (The Edge)

IOI Properties Group Bhd’s (IOIPG) 1QFY23 net profit surged 206.6% YoY to RM640.3m, on improvements across all its business segments particularly the hospitality and leisure segment, coupled with fair value gain of RM470.0m for IOI City Mall. Revenue for the quarter climbed 60.2% YoY to RM691.5m. (The Edge)

Allianz Malaysia Bhd’s 3QFY22 net profit fell 5.7% YoY to RM108.6m, as it registered a higher management expense as well as higher operating and tax expenses. Revenue for the quarter, however, rose 7.7% YoY to RM1.71bn. (The Edge)

KPJ Healthcare Bhd’s 3QFY22 net profit soared 329.4% YoY to RM54.3m, on improved hospital activities. Revenue for the quarter climbed 15.8% YoY to RM809.2m. A single tier interim dividend of 1.0 sen per share, payable on 28th December 2022 was declared. (The Edge)

Malaysian Pacific Industries Bhd’s (MPI) 1QFY23 net profit fell 35.5% YoY to RM52.7m, due to lower demand from the consumer electronics market in Asia. Revenue for the quarter slipped 3.5% YoY to RM564.0m. An interim dividend of 10.0 sen per share, payable on 21st December 2022 was declared. (The Edge)

Hap Seng Plantations Holdings Bhd’s 3QFY22 net profit declined 56.8% YoY to RM22.9m, mainly due to higher production costs as a result of higher fertilizer and diesel costs, as well as an increase in minimum wage and loss from fair value adjustments of biological assets of RM24.2m. Revenue for the quarter, however, increased 4.8% YoY to RM182.0m. (The Edge)

Farm Fresh Bhd's 2QFY23 net profit dropped 64.5% YoY to RM11.2m, due to significantly lower fair value gain on valuation of biological assets and higher costs. Revenue for the quarter, however, climbed 32.5% YoY to RM162.1m. (The Edge)

Matrix Concepts Holdings Bhd's 2QFY23 net profit eased 2.4% YoY to RM50.6m, as labour shortage weighed on construction activities. Revenue fell 7.2% YoY to RM222.4m. A dividend of 2.0 sen per share, payable on 12th January 2023 was declared. (The Edge)

Sports Toto Bhd’s 1QFY23 net profit stood at RM71.5m vs. a net loss of RM17.7m recorded in the previous corresponding quarter, mainly due to the improved results reported by its number forecast operator business STM Lottery Sdn Bhd and supported by the group’s luxury car deal HR Owen plc. Revenue for the quarter rose 77.9% YoY to RM1.42bn. A first interim dividend of 2.0 sen per share, payable on 20th January 2023 was declared. (The Edge)

IJM Corp Bhd has secured 2 contracts for the construction of a manufacturing facility and a commercial tower in Penang worth RM422.2m. The first contract is for the construction of a new chip assembly and testing facility with a value of RM341.4m, awarded by ASE Electronics (M) Sdn Bhd (ASEM), while the second contract is for the construction of a 45-storey Maritime Signature commercial tower located at Karpal Singh Drive in Georgetown, valued at RM80.8m, and awarded by Bionic Develoment Sdn Bhd. (The Edge)

Omesti Bhd’s unit secured a 3-year contract worth RM33.9m from the Federal Court of Malaysia to provide maintenance and support services for phase two of the e-COURTS system. Omesti’s 51.0%-owned indirect subsidiary Formis Network Services Sdn Bhd accepted the award from the Chief Registrar’s Office of the apex court for a contract period starting 1st December 2022 to 30th November 2025. (The Edge)

MN Holdings Bhd (MNHB) has proposed a bonus issue of 204.4m free warrants on the basis of 1 warrant for every 2 existing shares held to reward existing shareholders. The entitlement date of the warrants will be determined and announced at a later date. Such proceeds will be utilised for future working capital requirements. (The Edge)

Source: Mplus Research - 24 Nov 2022