Unabated volatility

Market Review

Malaysia:. The FBM KLCI (-0.4%) extended its decline after reversing all its intraday gains, dragged by weakness in banking heavyweights. The lower liners also trended lower, while 9 out of 13 sectors closed in red with the financial services sector (-1.1%) finished lower for the fourth straight session.

Global markets:. The US stockmarkets retreated as the Dow (-0.6%) pared most of its previous session gains after several US Federal Reserve officials re-iterated their hawkish stance on future interest rate hikes to quash inflation. Both the European and Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI trended lower amid selling pressure in banking and industrial products & services heavyweights. Meanwhile, the local bourse continued to see net selling activities from foreign investors (5-day cumulative net selling:. - RM407.0m). While the bargain hunting activities may emerge following a two-day selldown, overall market undertone will remain cautious amid the overnight negative performance on Wall Street amid the persisted worries over the US interest rate hikes. Commodities wise, the crude oil price stayed above USD83, while the CPO price hovered closer to RM4,000 zone.

Sector focus:. Volatility may continue within the technology sector, as Nasdaq fell below the critical 12,000 level overnight. Investors may focus on defensive sectors such as REIT and utilities to withstand the near-term volatility. Besides, we still expect the O&G sector to stay firm amid the elevated crude oil price.

FBMKLCI Technical Outlook

The FBM KLCI extended its decline for the second session to close below its daily EMA120 level. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 50. Support is pegged along 1,450-1,460, while the resistance is set around 1,525-1,540.

Company Brief

British American Tobacco (M) Bhd’s (BAT) 4QFY22 net profit fell 13.6% YoY to RM61.7m, due to one-off prosperity tax of 33.0% and weaker topline. Revenue for the quarter dipped 10.6% YoY to RM770.6m. A fourth interim dividend of 21.0 sen per share, payable on 7th March 2023 was declared. (The Star)

TMC Life Sciences Bhd’s 2QFY23 net profit declined 20.5% YoY to RM5.5m, due to a sharp increase in depreciation and tax expenses. Revenue for the quarter, however, grew 23.9% YoY to RM73.3m. (The Edge)

The Employees Provident Fund (EPF) has increased its direct stake in MyEG Services Bhd to 6.9%. This came after the pension fund bought 1.5m MyEG shares on 2nd February 2023, raising its interest to 513.0m shares. (The Edge)

IHH Healthcare Bhd, which has a private healthcare facility in Türkiye, has reported that its operations are unaffected by the 7.8-magnitude earthquake that struck southeastern Türkiye and northwestern Syria early Monday. IHH’s 90.0% interest in Acibadem Holdings operates a private healthcare provider in Türkiye that offers integrated healthcare services in that country, Macedonia, Bulgaria, the Netherlands and Serbia. (The Edge)

UEM Sunrise Bhd’s plan to buy a piece of freehold land situated near the Kuala Lumpur Convention Centre (KLCC) has fallen through after conditions precedent under the sale and purchase agreement (SPA) were not fulfilled within the conditional period, which expired on 7th February 2023. As the SPA had lapsed, the vendor Nipponkey Sdn Bhd will refund its indirect wholly-owned subsidiary Lucky Bright Star Sdn Bhd the deposit within 14 days. (The Edge)

EG Industries Bhd has proposed a private placement to raise RM22.4m to fund its business expansion and working capital. The placement entails the issuance of up to 40.9m new shares, representing 10.0% of EG Industries’ issued shares to independent investors. The assumed issue price of 54.75 sen represents a discount of 10.0% to the 5-day volume weighted average market price of EG Industries’ shares up to the latest practicable date, of 60.8 sen. (The Edge)

Crescendo Corp Bhd is buying 3 plots of land measuring 109.9-ac in Kota Tinggi, Johor, to expand its landbank. The group is buying the plots, located near its existing development in Bandar Cemerlang, from Johor Land Bhd for RM67.6m. (The Edge)

Ecomate Holdings Bhd eyes a move to the Main Market after meeting the requirements for the transfer to the Main Market as set out in the equity guidelines issued by the Securities Commission and the Main Market Listing Requirements of Bursa Securities. Ecomate posted a profit after tax (PAT) of RM7.1m in its most recent audited financial year ended 28th February 2022 (FY22), and an aggregate PAT of RM21.4m over the past three audited financial years (FY20-FY22). (The Edge)

Source: Mplus Research - 9 Feb 2023