Previous Day Highlights

FBM KLCI continue to trend lower as selling pressure persisted on banking stocks. The benchmark index fell by 0.38% or 5.63 points to close at 1,470.75 with losers led by HLFG, CIMB and HLBANK. Market breadth was negative with 566 decliners against 370 advancers while 404 counters remain unchanged. Total volume stood at 3.94bn shares valued at RM2.51bn.

Key regional indices were mostly lower despite the positive cue from Wall Street overnight. STI gained 0.23% to end at 3,388.52 whereas Nikkei 225 lost 0.29% to finish at 27,606.46. Meanwhile, HSI and SHCOMP declined 0.07% and 0.49% to close at 21,283.52 and 3,232.11 respectively.

Wall Street retreated as investors digested remarks from several Federal Reserve officials saying that more rate hike to combat inflation. The DJIA dropped 0.61% to finish at 33,949.01. Meanwhile S&P500 and Nasdaq both slumped 1.11% and 1.68% to end at 4,117.86 and 11,910.52 respectively.

News For The Day

BAT Malaysia’s 4QFY22 net profit down 14%

British American Tobacco (Malaysia) (BAT Malaysia), the country’s largest tobacco company by revenue, posted its 4QFY22 net profit decline, reporting a net profit of RM61.73m compared with RM71.46m YoY. The decline was partly due to the one-off prosperity tax of 33%. EPS came in lower at 21.6 sen for 4QFY22, compared with 25 sen for 4QFY21. The group declared a fourth interim dividend of 21 sen per share, amounting to RM60m for FY22, payable on March 7. -The Edge Markets

Crescendo buys 109.86-acres land in Johor for RM67.55m

Crescendo Corp (CCB) is acquiring three plots of land in Johor totalling 109.86 acres from Johor Land for RM67.55m. The property developer said the lands are within the development known as “Bandar Tiram.” “The plots are located in a strategic location and are near to the existing development of the CCB group at Bandar Cemerlang and enable the group to further expand its landbank near its existing development.” it said. – The Star

UEM Sunrise's KLCC land buy falls through as conditions precedent not met

UEM Sunrise’s plan to buy a freehold land situated near the Kuala Lumpur Convention Centre (KLCC) has fallen through after conditions precedent under the sale and purchase agreement (SPA) were not fulfilled within the conditional period, which expired on Tuesday (Feb 7). As the SPA had lapsed, UEM Sunrise said the vendor Nipponkey SB will refund its indirect wholly owned subsidiary Lucky Bright Star SB the deposit, including any interest accrued, within 14 days. -The Edge Markets

Ecomate seeks to transfer listing to Main Market

ACE Market-listed Ecomate Holdings is seeking to transfer its listing status to the Main Market of Bursa Malaysia. “The proposed transfer is expected to enhance the group’s prestige and reputation, and will accord the Ecomate group with greater recognition and acceptance amongst investors, in particular, institutional investors,” Ecomate said.-The Star

TMC Life Sciences’ 2Q net profit falls 20%

TMC Life Sciences’ 2QFY6/23 net profit declined 20.49% YoY to RM5.49m from RM6.91m, due to a sharp increase in depreciation and tax expenses. Its depreciation and amortisation expenses ballooned to RM6.3m from RM2.92m, while finance costs jumped 21-fold to RM2.46m.-The Edge Markets

Our Thoughts

Wall Street tumbled after a choppy session as traders digested remarks from the Federal Reserves that interest rates may need to stay high to fight inflation. As a result, the DJI Average lost 208 points while the Nasdaq declined by203 points as the US 10-year yield eased to 3.61%. Over in Hong Kong, the HSI closed 15 points lower amid some mild profit taking activities but tech related stocks experienced some strong selling on concerns of earnings and interest rate outlook. On the home front, the FBM KLCI failed to maintain its strong opening as it dipped to the 1,470 level amid the continued sell-down on the Banks. Despite the prevailing weak market sentiment, we reckon blue chips are ripe for accumulation as we enter into the corporate earnings season where consensus remain confident that both the Banking and Telco sectors to perform strongly for 2022. For today, we expect the index to hover within the 1,470-1,480 range. Meanwhile, crude oil prices continued with its uptrend momentum as the Brent crude ended at above the US$85/barrel.

Source: Rakuten Research - 9 Feb 2023

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