Previous Day Highlights

FBM KLCI closed on a positive note as broad buying on energy stocks in tandem with a much improved performance regionally. The benchmark index gained 0.60% or 8.80 points to close at 1,483.97. Gainers were led by PETGAS, KLK and PETDAG. Market breadth was neutral with 431 decliners against 428 advancers while 442 counters were unchanged. Total volume stood at 3.20bn shares valued at RM2.16bn.

Key regional indices ended mixed despite the positive Wall Street performance overnight. Nikkei 225 was up 0.64% to close at 27,602.77 while STI was down 0.20% to close at 3,318.20. Meanwhile, HSI declined 0.24% to finish at 21,113.76 whereas SHCOMP added 0.28% to end at 3,293.28.

Wall Street trended mixed following a higher than expected January’s CPI. The DJIA erased 0.46% to closed on 34,089.27 while SP500 close flat at 4,136.13. Meanwhile, Nasdaq advanced 0.57% to finish at 11,960.15.

News For The Day

MR DIY posts flat 4Q net profit

MR DIY Group (M) reported a marginal increase in 4QFY22 net profit to RM136.08m from RM134.55m, on the back of a higher revenue. Quarterly revenue rose 9.27% YoY to RM1.07bn from RM975.39m, driven by positive sales contributions from new stores, which grew 20% YoY from 900 stores to 1,080 stores, leading to a 15.2% increase in total transactions to 38.1m. MR DIY declared an interim dividend of 0.6 sen, to be paid on March 24, with March 2 as the ex-date.– The Edge Markets

Betamek bags Perodua contracts worth RM123.5m

Betamek has secured contracts worth RM123.5m to supply various electronics parts for a new Perodua model. The electronics manufacturing services (EMS) provider said its unit Betamek Electronics (M) SB received the letter of appointment from Perusahaan Otomobil Kedua SB (Perodua). It said the supply of these parts commenced in 4QFY3/23 and is for a duration of six years. -The Edge Markets

TNB to allocate RM90m for building EV charging stations

Tenaga Nasional (TNB) will allocate RM90m over a two-year period to build direct charging (DC) stations for electric vehicles (EV) in the country. TNB had already built three charging stations at the Rest and Service (R&R) areas in Ayer Keroh, Melaka; Tapah, Perak; and Paka, Terengganu. “We are targeting to build seven more DC stations in Malaysia by the end of this year along the North-South Highway (PLUS). -The Edge Markets

Hup Seng's 4Q net profit rises 28%

Stronger domestic sales lifted Hup Seng Industries’ 4QFY22 net profit by 28.08% YoY to RM12.44m from RM9.71m. Carried by a 23% rise in domestic sales, the group’s quarterly revenue increased 16.05% YoY to RM94.93m versus RM81.81m. The group has recommended an interim single-tier dividend of one sen per share for the quarter under review. -The Edge Markets

SCIB terminates RM56m EPCC contract in Indonesia

Sarawak Consolidated Industries Bhd (SCIB) has terminated a proposed engineering, procurement, construction and commissioning (EPCC) project worth RM55.59m, involving earthworks for the Prabumulih-Muara Enim tolled road in Sumatera, Indonesia. The civil engineering specialist’s wholly owned unit SCIB International (Labuan) Ltd (SCIBILL) issued a notice of termination to PT Cipta Multi Sarana (PTCMS), amid a lack of progress due to the pandemic and initiatives to review and update SCIB’s order books. -The Edge Markets

Our Thoughts

Wall Street closed on a mixed note following a higher than expected January’s consumer price index (CPI) heightening concerns of more rate hikes by the Federal Reserves going forward. The DJI Average lost 157 points after a choppy session while the Nasdaq added 68 points as the US 10-year yield inched higher to 3.75%. Over in Hong Kong, the downtrend of the benchmark HSI continued as it declined 51 points or a 1-month low amid more outflow of funds. Meanwhile, the Hong Kong Monetary Authority (HKMA) mopped up HK$4.22bn in local currency to stabilize the HK$. On the domestic front, the FBM KLCI surged past the 1,480 mark attributed to accumulation of blue chips by foreign funds. We reckon such bargain hunting activities to continue ahead of the earnings season later this month as many are expecting corporate Malaysia to churn out decent earnings growth for 2022. In view of the mixed performance in the US overnight, we reckon flight of funds may return hence anticipate the index to hover between the 1,475-1,490 range today with focus on the Banks today.

Source: Rakuten Research - 15 Feb 2023

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