Market Review

Malaysia:. The FBM KLCI (+0.04%) snapped a 4-day losing streak as mild signs of bargain hunting emerges. The lower liners ended mixed, while the technology  sector (+3.2%) rallied to rebound from near 7-months low, taking cue from the positive developments on Nasdaq overnight.

Global markets:. Wall Street advanced as the Dow (+1.0%) was driven by the buying frenzy in AI-related stocks, while there were signs of progress over the on-going  debt negotiations. The European stock markets also advanced, but Asia stockmarkets ended mostly in red.

The Day Ahead

The FBM KLCI booked marginal gains after enduring a volatile session following the softer CPI data for Malaysia in April 2023. In light of the brighter outlook of US  debt-ceiling deal, bargain-hunting activities may emerge on the local bourse,  tracking the rallies on Wall Street last Friday. Investors may also monitor  Malaysia’s and US S&P Global Manufacturing PMI, as well as US unemployment rate this week. Commodities wise, the Brent crude oil traded above USD76, while  the CPO price climbed above RM3,500. 

Sector focus:. We believe the rallies on Wall Street Nasdaq last Friday should spill over to the local technology stocks. Besides, the beaten-down energy sector may see some buying interest amidst economy recovery. Poultry sector may gain momentum prior to the potential lifting of poultry ceiling prices after June 2023. 

FBMKLCI Technical Outlook

The FBM KLCI finished marginally higher as the key index continued to stay below its daily EMA9 and EMA20. Technical indicators however, remained negative as the MACD Histogram extended a negative bar, while the RSI hovered below 50. Next support is envisaged along 1,370-1,390, while the resistance is pegged along 1,440- 1,460.

Company Brief

DRB-Hicom Bhd’s 1QFY23 net profit stood at RM107.9m vs. a net loss of - RM25.7m recorded in the previous corresponding quarter, following an improved  performance in the group’s automotive and banking sectors. Revenue for the  quarter rose 33.7% YoY to RM4.10bn. (The Star)

IOI Properties Bhd’s (IOIProp) 3QFY23 net profit jumped 93.2% YoY to RM115.4m,  on lower taxation. Revenue for the quarter, however, fell 23.5% YoY to RM564.7m.  (The Star)

RHB Bank Bhd’s 1QFY23 net profit rose 30.8% YoY to RM761.7m, largely thanks to  higher non-fund based income and lower expected credit loss. Revenue swelled  39.6% YoY to RM3.92bn. (The Edge)

Affin Bank Bhd's 1QFY23 net profit rose 4.4% YoY to RM149.0m, on higher net  interest income. Revenue for the quarter fell 6.5% YoY to RM494.3m. (The Edge)

MSM Malaysia Bhd’s 1QFY23 net loss widened to -RM35.9m, from a net loss of - RM27.7m registered in the previous corresponding quarter, as a result of lower  margins and higher operating costs. Revenue for the quarter declined marginally by  1.3% YoY to RM588.4m. (The Edge)

Malakoff Corp Bhd’s 1QFY23 net loss stood at -RM99.1m, from a net profit of  RM27.5m recorded in the previous corresponding quarter, due to substantial  negative fuel margin recorded at its Tanjung Bin Power Sdn Bhd and Tanjung Bin  Energy Sdn Bhd power plants. Revenue for the quarter, however, rose 21.3% YoY to  RM2.28bn. (The Edge)

UMW Holdings Bhd’s 1QFY23 net profit gained 32.9% YoY to RM134.4m, thanks to  strong vehicle sales. Revenue for the quarter grew 20.0% YoY to RM4.38bn. (The  Edge)

OSK Holdings Bhd’s 1QFY23 net profit climbed 36.3% YoY to RM115.1m, due to  better operating performance across all business segments that was underpinned  by stronger consumer sentiment, recovering labour market conditions and the  revival of tourism activities. Revenue for the quarter rose 8.7% YoY to RM333.2m. (The Edge)

Bintai Kinden Corp Bhd has provided additional information to Bursa Malaysia  regarding the group’s internal investigation into the conduct involving 3 former  directors. Bintai Kaiden revealed that there are three former directors involved in  the investigation, but again it did not reveal their identities. (The Edge)

Datasonic Group Bhd’s 4QFY23 net profit added 69.8% YoY to RM22.7m, driven by higher supply of passports, smart cards and personalisation services.Revenue or the quarter jumped 93.0% YoY to RM104.9m. A fourth interim dividend of 0.75 sen per share was announced. (The Edge)

Top Builders Capital Bhd's external auditor Kreston John & Gan has flagged significant doubts over the group's future in an audit of its financial statements for the financial year ended 30th June 2022. Kreston John & Gan was unable to obtain sufficient appropriate audit evidence regarding the feasibility of Top Builders' plan to regularise its financial condition by 29th June 2023. (The Edge)

CTOS Digital Bhd has redesignated its independent director Datuk Noorazman Abd  Aziz as independent non-executive chairman, following the retirement of Tan Sri  Izzuddin Dali. The redesignation took effect from 26th May 2023. (The Edge)

Sapura Energy Bhd has appointed a former top staff of Malaysia Marine and  Heavy Engineering Holdings Bhd (MHB) and Petroliam Nasional Bhd (Petronas) into its boardroom, amid talks of merger between Sapura Energy and MHB — a unit of Petronas. The company announced that MHB’s former managing director and chief executive officer Wan Mashitah Wan Abdullah Sani has joined the board as an independent and non-executive director. (The Edge)

Tenaga Nasional Bhd (TNB) has inked 3 Memoranda of Understanding with the major energy players in Vietnam and Laos to explore potential collaboration in renewable energy power generation. The two MOUs signed in Vietnam were between TNB Renewables Sdn Bhd and Saigon Gia Dinh Electric Joint Stock  Company and between TNB Repair and Maintenance Sdn Bhd and North Power  Service Joint Stock Company. Meanwhile, the MOU in Laos was signed between  TNB Genco and Electricite Du Laos. (The Edge)

Boustead Holding Bhd announced that its 68.9%-owned subsidiary, Boustead  Naval Shipyard Sdn Bhd, has inked a 6th supplemental contract with the government with regard to the construction of littoral combat ships. It will build 5 combat vessels instead of six originally, and at a higher contract cost of RM11.2bn. (The Edge)

Bahvest Resources Bhd is unable to submit its 1QFY23 by 31st May 2023 due to the recent raid by the Malaysian Anti-Corruption Commission (MACC) on the goldmine and business premises of its wholly-owned unit Wullersdorf Resources  Sdn Bhd in Tawau, Sabah. MACC had raided its accounting records on 16th May  2023 and therefore Bahvest's finance team was unable to finalise the results for the quarter within two months as required by Bursa Securities. (The Edge)

Source: Mplus Research - 29 May 2023