Previous Day Highlights

FBM KLCI slumped on broad-based selling on the last trading day of January, in line with the poor performance across the region. The benchmark index lost 0.93% or 13.89 points to close at 1,485.50. Losers were led by PETDAG, NESTLE and PETGAS. Market breadth was negative with 632 decliners against 326 advancers. Total volume stood at 4.03bn shares valued at RM2.78bn.

Key regional markets were in positive territory following the positive cue in the US overnight. Nikkei 225 and STI advanced 0.07% and 0.36% to end at 27,346.88 and 3,377.65 respectively. Meanwhile, HSI and SHCOMP soared 1.05% and 0.90% to finish at 22,072.18 and 3,284.92 respectively.

Wall Street reversed its earlier losses and ended higher after the Federal Reserve raised its policy interest rate by 25bps. The DJIA added 0.02% to finish at 34,092.96. Meanwhile S&P500 and Nasdaq rose 1.05% and 2.00% to end at 4,119.21 and 11,816.32 respectively.

News For The Day

AEON Credit secures RM600m SLLs from three banks 

AEON Credit Service (M) has secured a total of RM600m in sustainability-linked loans (SLLs) with a three-year tenure for the first time with two Japanese banks and a local bank, namely Mizuho Bank (Malaysia), MUFG Bank (Malaysia) and CIMB Bank. Proceeds from the SLLs will be used for general working capital and refinancing purposes and to enhance its sustainability performance that contributes to the United Nations' Sustainable Development Goals (SDGs). -NST

Lotte Chemical Titan posted 4Q net loss of RM317.22m

Lotte Chemical Titan Holding (LCT) posted its 4QFY22 net loss of RM317.22m from a net profit of RM168.89m amid weakened market demand. The company said this resulted from a volatile external environment, such as elevated inflation, higher interest rates and the Russia-Ukraine crisis. LCT declared a special dividend of 13.98 sen per share, which amounted to a dividend payout of RM318.4m.– NST

Pavilion REIT 4Q net profit surges to RM216.4m

Pavilion REIT’s 4QFY22 net profit surged to RM216.42m from RM53.57m YoY mainly due to higher rental billings, increase in revenue rent and income from advertising after all economic sectors and businesses resume their businesses post pandemic. -The Star

Bursa Malaysia 4QFY22 net profit down 25% to RM49m

Bursa Malaysia’s 4QFY22 net profit declined by 24.55% YoY to RM49m from RM64.95m. Bursa Malaysia declared a final dividend of 11.5 sen per share amounting to around RM93.10m, bringing FY22 total dividend payout to 26.5 sen per share. -The Edge Markets

Teladan Setia buys Melaka land for RM48.54m

Teladan Setia Group through its wholly owned subsidiary Asal Harta SB has entered into a sales and purchase agreement with Megan Mastika SB to purchase a vacant commercial land in Melaka Tengah for RM48.54m. The land, which measures approximately 7.54 acres will be developed into a health and wellness centre and serviced apartments. -The Edge Markets

Hong Seng Consolidated acquires 51% stake in Innov8tif

Hong Seng Consolidated (HSC) has acquired a 51% equity interest in Innov8tif Holdings SB for RM30.85m to empower Malaysia as a digital nation. Innov8tif Holdings currently owns Innov8tif Solutions SB and Xendity SB under the Innovative Holdings Group. -NST

Our Thoughts

Wall Street having languishing in negative territory, recovered strongly following the Federal Reserves 25bps hike in late session. The Feds further reiterated that future hikes will depends on the inflation data indicating a less aggressive stance. The DJI Average added 7 points while the Nasdaq jumped by 232 points as the US 10-year yield eased to below 3.42%. Meanwhile, Hong Kong equities rebounded buoyed by tech stocks as traders are betting on the Feds less aggressive rate hike pushing the HSI 230 points higher to close above the 22,000 level. On the local front, the FBM KLCI experienced strong broadbased sell-down on Monday as it ended below the 1,490 mark. Nonetheless, we reckon bargain hunting activities should return thus expect the index to trend between the 1,490-1,500 range today with the tech sector to see a strong recovery. Meanwhile, crude oil prices weakened on higher inventory data as the Brent crude declined to US$83/barrel.

Source: Rakuten Research - 2 Feb 2023

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