Upbeat trend resume

Market Review

Malaysia: The FBM KLCI (+0.2%) snapped a 3-day losing streak, lifted by gains in selected banking heavyweights yesterday. The lower liners also advanced, while the utilities sector (+2.2%) emerged as the biggest winner amongst the mostly positive sectorial peers.

Global markets: Wall Street retreated as the Dow slipped 1.0% after the strongerthan-expected retail sales data implies that interest rates may stay elevated for a longer period. The European stockmarkets closed mostly negative, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI took another stride forward as sentiment turned more favourable yesterday. We reckon that the key index may build onto its previous session gains, driven by the (i) stable political environment, (ii) uninterrupted foreign funds inflow over the past 7 consecutive trading sessions and (iii) active EPF members hitting all-time high of 8.5m signals robust employment market. The lower liners are also in a sweet spot with the quarterly reporting season shifted into higher gear. Moving forward, investors will be keeping a close tab on the US FOMC minutes releases that may provide additional clues over the interest rate direction in the world largest economy. Commodities wise, the Brent crude oil slipped towards USD85/bbl, while the CPO prices stabilised above RM3,800/MT.

Sector focus: The rebound in crude palm oil prices after China unexpectedly cut key policy rates to spur economic growth is deemed positive for the plantation sector. On the other hand, the weaker crude oil prices may lead to a potential pullback in the energy sector, while profit taking activities may emerge within the technology sector following the softer performance on Nasdaq overnight.

FBMKLCI Technical Outlook

The FBM KLCI advanced to form a short-term flag-formation breakout as the key index re-tested the 1,460 resistance level. Technical indicators stayed positive as the MACD Histogram extended another positive bar, while the RSI is above 50. The next resistances are located along 1,480-1,500, while the support is pegged around 1,420-1,440.

Company Brief

Dialog Group Bhd’s 4QFY23 net profit rose 7.2% YoY to RM126.8m, lifted by higher share of profit from joint ventures and associates and other operating income. Revenue for the quarter gained 2.1% YoY to RM690.0m. An interim dividend of 2.4 sen per share was proposed. (The Star)

Carlsberg Brewery Malaysia Bhd’s 2QFY23 net profit declined marginally by 0.8% YoY to RM88.2m, primarily due to lower sales. Revenue for the quarter fell 11.8% YoY to RM506.7m. (The Edge)

Heineken Malaysia Bhd’s 2QFY23 net profit rose 5.1% YoY to RM90.5m, as efficiency gains through cost and value initiatives mitigated lower revenue. Revenue for the quarter fell 11.7% YoY to RM569.2m. An interim dividend of 40.0 sen per share, payable on 10th November 2023 was declared. (The Edge)

Abrdn plc (formerly known as Aberdeen Asset Management plc) has emerged as Farm Fresh Bhd’s substantial shareholder after the purchase of 93.8m shares or a 5.0% stake. Abrdn is the fifth largest shareholder in the home-based dairy company. (The Edge)

Datuk Wira Justin Lim Hwa Tat, who is under investigation by the Malaysian AntiCorruption Commission (MACC), has resigned from the board of SMTrack Bhd as its non-independent non-executive director, with immediate effect. His resignation was due to other work commitments. (The Edge)

MST Golf Group Bhd’s 2QFY23 recorded a net profit of RM5.4m on revenue of RM75.9m. There are no comparative year-on-year figures as the group was only listed on 20th July 2023. On a quarter-on-quarter basis, MST Golf’s net profit dropped 38.2% QoQ, while revenue decreased 12.0% QoQ. (The Edge)

Ranhill Utilities Bhd's 2QFY23 net profit surged 72.2% YoY to RM12.1m, as its environment and energy segments reported higher earnings. Revenue for the quarter grew 29.5% YoY to RM593.7m. A dividend of 3.5 sen per share was proposed. (The Edge)

Samchem Holdings Bhd’s 2QFY23 net profit sank 70.3% YoY to RM5.4m, due to a decline in sales volume and margins. Revenue for the quarter fell 24.7% YoY to RM276.2m. A second interim dividend of 0.5 sen per share was proposed. (The Edge)

Source: Mplus Research - 16 Aug 2023