Muted response from Budget 2023

Market Review

Malaysia:. The FBM KLCI (-0.1%) ticked lower as the key index recorded its fourth day losing streak, dragged down by Petronas-related and telco heavyweights. The lower liners also edged lower, while the utilities (+0.8%), financial services (+0.7%) and property (+0.3%) sectors outperformed the negative sectorial peers.

Global markets:. Wall Street rebounded as the Dow (+0.2%) managed to hold onto its intraday gains, driven by optimism expectations over earnings growth that offset the mixed bag of economic data. The European stockmarkets also advanced, but Asia stockmarkets ended mostly negative.

The Day Ahead

The FBM KLCI inched lower after hovering mostly in the red, with selling pressure seen in other sectors outweighing gains in the banking heavyweights. The rebound attempt on Wall Street overnight may trigger the regional markets to recover some grounds. Meanwhile, investors are awaiting the consumer confidence data and Chicago PMI to gauge the US Fed’s tone in interest rate direction. We reckon cautious sentiment will prevail on the local front with foreign investors turning net sellers, but bargain hunting may be noticed. Commodities wise, the Brent crude oil price hovered above USD82 per barrel mark, while the CPO traded above RM4,220.

Sector focus:. Investors may see some bargain hunting activities emerging in the technology sector following a Nasdaq-led rebound on Wall Street. Besides, investors may continue to focus on the energy sector in view of the firm crude oil price hovering above USD82.

FBMKLCI Technical Outlook

The FBM KLCI marked fourth-session losses but managed to closed above its immediate support at 1,450. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 50. Should the key index break below 1,450, next support is located at 1,430, resistance is envisaged at 1,500-1,510.

Company Brief

Pharmaniaga Bhd has been classified as an affected listed issuer under Practice Note 17 (PN17) of the Main Market Listing Requirements of Bursa Malaysia. The pharmaceutical company had triggered the PN17 criteria pursuant to its audited consolidated financial statements for the period ended 31st December 2022. Pharmaniaga said it will need to submit a regularisation plan to the Securities Commission Malaysia within 12 months if the plan will result in a significant change in the business direction or policy of the company. (The Star)

Malayan Banking Bhd’s 4QFY22 net profit grew 5.4% YoY to RM2.17bn, as growth in net interest income and other operating income more than offset headwinds from higher provisions, impairments and overhead expenses. Revenue for the quarter added 28.9% YoY to RM14.51bn. A second interim cash dividend of 30 sen per share was announced. (The Edge)

Public Bank Bhd’s 4QFY22 net profit grew 24.1% YoY to RM1.71bn, on high revenue. Revenue for the quarter rose 24.8% YoY to RM6.06bn. A third interim dividend of 5.0 sen per share, payable on 22nd March 2023 was declared. (The Edge)

RHB Bank Bhd’s 4QFY22 net profit increased 22.3% YoY to RM772.1m, due to the absence of modification loss, as well as significantly lower allowances for credit losses on financial assets. Revenue for the quarter grew 36.7% YoY to RM3.95bn. (The Edge)

Affin Bank Bhd’s 4QFY22 net profit shrank 33.2% YoY to RM138.3m, due to a sharp rise in taxation to RM86.7m vs. RM3.5m a year ago. Revenue for the quarter slipped marginally by 0.9% YoY to RM566.7m. A final dividend of 7.77 sen per share was announced. (The Edge)

Tenaga Nasional Bhd’s 4QFY22 net profit dropped 7.8% YoY to RM809.1m, dragged by higher finance cost and tax expenses that offset by the higher foreign currency translation gain. Revenue for the quarter, however, increased 3.1% YoY to RM12.92bn. A final single-tier dividend of 26.0 sen per share was announced. (The Edge)

FGV Holdings Bhd’s 4QFY22 net profit declined 27.4% YoY to RM337.7m, due to drop in profitability from the plantation and logistics sector, and higher losses recorded by its sugar business. Revenue for the quarter marginally by 1.1% YoY to RM6.10bn. Separately, the group expects to resolve the issue of labour shortage at its oil palm plantations by 3Q2022, and hopes this will help to boost production and expedite its replanting programme. (The Edge)

MyEG Services Bhd’s 4QFY22 net profit decreased 7.3% YoY to RM74.7m, affected by the government's lifting of health screening and quarantine requirements. Revenue for the quarter declined 29.6% YoY to RM165.0m. A final dividend of 1.17 sen per share was announced. (The Edge)

UMW Holdings Bhd’s 4QFY22 net profit sank 55.8% YoY to RM106.0m, owing to a lower share of profit from an associated company. Revenue for the quarter, however, rose 20.0% YoY to RM4.38bn. (The Edge)

Velesto Energy Bhd’s 4QFY22 net loss stood at -RM26.0m vs. a net profit of RM5.4m registered in the previous corresponding quarter, as the bottom line was hit by higher operating expenses, finance costs and taxation. Revenue for the quarter, however, gained 53.4% YoY RM243.1m. (The Edge)

OSK Holdings Bhd's 4QFY22 net profit rose 23.4% YoY to RM121.32 m, supported by its property and financial services and investment holding divisions. Revenue for the quarter gained 5.6% YoY to RM332.7m. A final dividend of 4.0 sen per share, payable on 12th May 2023 was declared. (The Edge)

PT Resources Holdings Bhd has inked a deal with Ocean Exchange (Fujian)

Foreign Trade Services Co Ltd (Ocean Exchange) to jointly develop the Malaysia East Coast International Supply Chain Intelligent Park. The project involves the establishment of an international supply chain intelligent park in Kuantan, Pahang, which is intended to drive the development of food and light industries’ supplychain between Malaysia and Fuzhou. (The Edge)

Source: Mplus Research - 28 Feb 2023