Previous Day Highlights

FBM KLCI ended higher as bargain hunting activities emerged following the sell down previously. The benchmark index gained 0.29% or 4.30 points to close at 1,489.80 with gainers led by PETDAG, KLK and NESTLE. Market breadth was positive with 681 gainers against 340 losers while 372 counters remain unchanged. Total volume stood at 5.14bn shares valued at RM2.95bn.

Key regional indices were mixed after the US Federal Reserves’ smaller rate hike of 25bps. Nikkei 225 added 0.20% to end at 27,402.05 whereas STI dropped 0.41% to end at 3,363.68. HSI fell by 0.52% to close at 21,958.36 while SHCOMP closed flat at 3,285.67.

Wall Street closed mixed amid easing inflationary concerns. The DJIA erased 0.11% to finish at 34,053.94. Meanwhile S&P500 and Nasdaq both soared 1.47% and 3.25% to end at 4,179.76 and 12,200.82 respectively.

News For The Day

Kerjaya Prospek wins contract worth RM135m

Construction outfit Kerjaya Prospek Group announced that its 49%-owned subsidiary Kerjaya Bina BMK SB has accepted a letter of award (LOA) from BBCC Development SB, a joint venture company between Employees Provident Fund, UDA Holdings and Eco World Development Group. The award valued at RM135.4m is for the design and build contract work of the main building for the proposed development project off in Kuala Lumpur. The project is expected to commence on March 1, 2023 for 36 months. -The Edge Markets

Velesto bags jack-up drilling rig services worth RM59m

Velesto Energy announced that its wholly owned subsidiary Velesto Malaysian Ventures SB had received a letter of award from ROC Oil (Sarawak) SB for the provision of jack-up drilling rig services estimated at US$14m (RM59.29m). Velesto Malaysian Ventures' wholly owned subsidiary Velesto Drilling SB is estimated to be drilling three firm wells from Jan 25 to Feb 25 this year. -The Edge Markets

IHH Healthcare acquires Turkey-based Kent Health Group

IHH Healthcare has acquired Kent Health Group, the largest private hospital operator in Izmir, Türkiye. IHH said its subsidiary, Acibadem Healthcare Group, had entered into definitive agreements to acquire 100% of Kent Health Group. Founded in 2004, Kent Health Group operates the 340-bed Izmir Kent Hospital with an attached cancer centre and two medical centres in the city.-The Star

DNeX bags contract from Inland Revenue Board

Dagang NeXchange's (DNeX) subsidiary Innovation Associates Consulting SB (IAC) has bagged a maintenance contract from the Inland Revenue Board (IRB) worth RM4.05m, for the application and software maintenance of Malaysia Hasil Integrated Taxation Systems. DNeX said the one-year contract was expected to commence in February 2023 and be operationalised at IRB's headquarters in Cyberjaya. – NST

ACE Market-bound Oppstar signs underwriting agreement with Affin Hwang IB

Oppstar Bhd, an integrated circuit design service provider, has signed an underwriting agreement with Affin Hwang Investment Bank in conjunction with its initial public offering (IPO) and listing on the ACE Market of Bursa Malaysia. The IPO involves a public issue of 165.48m new shares, which represents approximately 26% of its enlarged issued share capital of 636.2m shares upon listing. -The Edge Markets

Our Thoughts

Wall Street closed mixed amid easing inflationary concerns and a more resilient labour market ensuring a soft landing scenario for the US economy. Though the DJI Average lost 39 points, the Nasdaq however jumped by 384 points with the US 10-year yield eased marginally to 3.4%. Over in Hong Kong, the HSI slipped 114 points after a strong opening as profit taking activities emerged erasing earlier gains. Nonetheless market undertone remains strong taking cue from the Federal Reserves’ less aggressive rate hike. Back home, the FBM KLCI ended on a positive note but below the 1,490 level as trading on the blues remains subdued. As we enter into corporate results season, we reckon most of the Big Caps to show decent earnings growth for 2022 particularly the Banks, Energy and Consumer sectors. For today, we expect the index to possibly trend between the 1,490-1,500 range. Meanwhile, we notice that consensus had changed their stance on the domestic interest rate scenario as most anticipate BNM to maintain the OPR indefinitely which is good news to equities.

Source: Rakuten Research - 3 Feb 2023

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