Quick profit taking

Market Review

Malaysia:. The FBM KLCI (-1.0%) pared some of its gains from the previous rally on quick profit taking activities ahead of the extended weekend break. The lower liners also turned lower, while the healthcare sector (-1.7%) underperformed the mostly negative sectorial peers.

Global markets:. The US stockmarkets turned lower as the Dow fell 1.5% after several key Federal Reserve officials reiterated the requirement for further aggressive rate hikes to combat inflation. The European stockmarkets also ended in red, while Asia stockmarkets closed mostly negative.

The Day Ahead

The FBM KLCI retreated on Friday as broad-based profit taking activities emerged ahead of the long weekend. The global stock markets started the week largely in a weaker note as protest over China’s strict Covid-19 restriction stoked worries over the global financial recovery. The local bourse may follow suit as buying momentum may slow down moving, while focusing on the ongoing earnings season. Meanwhile, investors may watch the formation of the cabinet in the near future as well as the re-tabling of Budget 2023. Commodities wise, the crude oil price fell towards USD83 per barrel, while the CPO price hovered above RM4,100.

Sector focus:. With the FIFA World Cup going on, buying momentum may build up in the breweries stocks. Besides, investors may favour the construction and building material related stocks ahead of the re-tabling of Budget 2023 which will likely to be focusing on the economy wellbeing. On the contrary, profit taking activities may emerge within the technology stocks.

FBMKLCI Technical Outlook

The FBM KLCI slipped below the key 1,500 level amid profit taking activities. Technical indicators, however turned positive with the MACD Histogram rising above zero, while the RSI is hovering above 50. Resistance is pegged along 1,520- 1,530, while the support is located at 1,430-1,450.

Company Brief

Affin Bank Bhd’s 3QFY22 net profit surged 554.9% YoY to RM872.4m, mainly due to higher net interest income. Revenue for the quarter jumped 193.2% YoY to RM1.62bn. (The Star)  

Genting Malaysia Bhd, along with 6 other companies bidding for a new 10-year gaming concession in Macau from 2023, may have to increase their proposed level of investment. The Macau government had sought an increase in investments as the bidding parties completed negotiations with the government and submitted their final proposals this week. (The Edge)  

Petronas Chemicals Group Bhd's (PetChem) 3QFY22 net profit slipped 3.5% YoY to RM1.90bn, as margins came under pressure from higher operating costs. Revenue for the quarter, however, grew 21.6% YoY to RM7.03bn. (The Edge)  

Axiata Group Bhd’s 3QFY22 net loss stood at RM52.4m vs. a net profit of RM349.6m recorded in the previous corresponding quarter, dragged by significant foreign exchange losses of RM346.7m, higher depreciation and amortisation, one off additional fees and RM151.6m penalties charged in Cambodia as well as higher finance costs and taxes. Revenue for the quarter, however, rose 11.0% YoY to RM7.26bn. A 5.0 sen interim dividend was declared. (The Edge)  

Sunway Bhd’s 3QFY22 net profit jumped 103.1% YoY to RM164.7m, lifted by improved performance across its business segments. Revenue for the quarter expanded 48.3% YoY to RM1.27bn. (The Edge)  

Dagang NeXchange Bhd’s (DNeX) 1QFY23 net profit sank 85.8% YoY to RM41.7m, as it recorded a RM264.5m gain from the bargain purchase of a 60.0% stake in SilTerra Malaysia Sdn Bhd in the previous corresponding quarter. Revenue for the quarter grew 54.9% YoY to RM419.6m. (The Edge)  

IOI Corp Bhd’s 1QFY23 net profit fell 39.7% YoY to RM167.5m, due to lower fresh fruit bunch (FFB) production and higher cost of production that mitigated the higher crude palm oil (CPO) prices realised. Revenue for the quarter improved marginally by 0.8% YoY to RM3.66bn. (The Edge)  

Sarawak Oil Palms Bhd's 3QFY22 net profit fell 34.4% YoY to RM82.3m, on higher production costs following increases in fertiliser and labour costs. Revenue for the quarter, however, climbed 1.7% YoY to RM1.32bn. (The Edge)  

Uchi Technologies Bhd’s 3QFY22 net profit added 30.5% YoY to RM32.5m, mainly due to higher demand for the group’s products and services, and the appreciation of the USD against the Ringgit. Revenue for the quarter rose 23.2% YoY to RM54.7m. (The Edge)  

Bintulu Port Holdings Bhd’s 3QFY22 net profit increased 31.7% YoY to RM28.7m, due to more cargo throughput at the Bintulu Port and Samalaju Industrial Port. Revenue for the quarter rose 15.3% YoY to RM199.1m. (The Edge)  

IJM Corp Bhd’s 2QFY23 net profit stood at RM27.0m vs. a net loss of RM29.3m recorded in the previous corresponding quarter, following the full resumption of business activities during the quarter, as countries emerged from Covid-19-induced lockdowns. Revenue for the quarter increased 22.6% YoY to RM1.07bn. (The Edge)

Chin Hin Group Bhd's 3QFY22 net profit jumped 6.4x YoY to RM16.4m, driven by full resumption of business activities. Revenue for the quarter increased 84.6% YoY to RM418.1m. (The Edge)  

OM Holdings Ltd is seeking to raise up to AUD30.9m (RM93.5m) through the issuance of a private bond to certain key management personnel, managers, employees as well as sophisticated and professional investors. Subscribers of the 3-year private bond, which carries a 10.0% coupon rate and payable semi-annually, will include executive chairman and chief executive officer Low Ngee Tong and related parties. Proceeds raised will be used to partly finance the purchase of a 25.0% interest in OM Materials (Sarawak) Sdn Bhd and OM Materials (Samalaju) Sdn Bhd from Samalaju Industries Sdn Bhd for USD120.0m (RM536.4m). (The Edge)  

Bintai Kinden Corp Bhd has secured a project worth RM39.0m from Tenaga Nasional Bhd (TNB) for the installation of a 132 kilovolt (kV) underground cable double circuit. The cable circuit will be installed from the PMU Financial Center to the GDS Data Center substation in Nusajaya, Johor. (The Edge)  

Datuk Seri Robert Tan Chung Meng will step down as IGB Bhd’s group chief executive officer effective 1st January 2023. Robert will remain with the group in the role of a non-independent, non-executive director to facilitate the change in leadership during the transition. Tan Boon Lee, the current deputy group CEO, will succeed Robert as the group CEO. (The Edge)

Source: Mplus Research - 29 Nov 2022