Previous Day Highlights

FBM KLCI eased to close marginally lower as profit taking activities emerged. The benchmark index shed 0.26% or 3.93 points to close at 1,484.26. Losers were led by NESTLE, PETDAG and PETGAS. However, market breadth was positive with 527 advancers against 403 decliners while 410 were remain unchanged. Total volume stood at 4.56bn shares valued at RM2.55bn.

Key regional markets were mostly in positive territory, leveraged by the stronger Wall Street performance overnight. Nikkei 225 and STI gained 0.71% and 0.93% to close at 27,696.44 and 3,311.23 respectively. Meanwhile, HSI rose 0.84% to end at 20,987.67 whereas SHCOMP dropped 0.96% to finish at 3,249.03.

Wall Street tumbled after a higher than expected producer price index data and raised investor’s concern for more aggressive rate hike. The DJIA fell by 1.26% to close at 33,696.85. Meanwhile, SP500 and Nasdaq slumped 1.38% and 1.78% to finish at 4,090.41 and 11,855.83.

News For The Day

PetGas' FY22 net profit drops to RM1.65bn

Petronas Gas's FY22 net profit dropped 17.3% YoY to RM1.65bn from RM1.99bn, due to lower contribution from all segments following higher operating expenses, mainly relating to fuel gas and internal gas consumption expenses. FY22’s group revenue however, rose 9% YoY to RM6.16bn from RM5.65bn. This was mainly contributed by higher revenue from the utilities segment as a result of higher product prices in line with higher fuel gas price. For its 4QFY22's net profit slipped 8.9% YoY to RM412.55m from RM452.63m. PetGas declared a dividend of 22 sen per share 4QFY22. Subsequently, its fullyear dividend came in at 72 sen per share. – NST

Hibiscus 2QFY23 net profit rises 45% as operations improve, declares 0.75 sen dividend

Hibiscus Petroleum’s 2QFY23 net profit rose 45% YoY to RM70.47m from RM48.49m, on the back of high oil and gas prices and as it achieved its highest average quarterly production ever. The group declared a dividend of 0.75 sen per share. Hibiscus incurred a one-off non-cash adjustment from the Energy Profits Levy regime in the United Kingdom amounting to RM104m in the latest quarter, which will be reversed in March 2028. -The Edge Markets

Farm Fresh acquire 53% stake in the Inside Scoop

Farm Fresh (FFB) has entered into a share purchase agreement with the vendors of The Inside Scoop SB (TISSB) for the proposed acquisition of 462,739 existing ordinary shares in TISSB. FFB said the acquisition represented 53% of the enlarged issued shares in TISSB after the completion of the proposals, for a total purchase consideration of about RM68.4m, subject to adjustments.-The Star

Vestland wins contracts totalling RM200m

Vestland has secured two contracts totalling RM200m for construction-related works in Pahang and Kuala Lumpur. Vestland said its wholly-owned subsidiary, Vestland Resources SB (VRSB) had accepted a letter of award worth RM125m from Tafi Development SB to undertake the construction and completion of building and mechanical and electrical work in Cameron Highlands, Pahang.-The Edge Markets

Cape EMS aims to raise RM155.7m in IPO

Electronics manufacturing services provider Cape EMS plans to raise RM155.7m via its initial public offering (IPO) to fund its expansion plans. The company, which is set to list on the Main Market of Bursa Malaysia on March 10, 2023, said the public issue will entail 173m new shares at 90 sen per share.-The Star

Our Thoughts

Wall Street retreated on more inflation worries following the release of a higher than expected producer price index coupled with a lower unemployment claims. As a result, the DJI Average declined by 431 points while the Nasdaq lost 215 points as the US 10-year yield closed higher at above the 3.86% level. Over in Hong Kong, the HSI rebounded to almost the 21,000 mark over reports that China may boost consumption via injection of liquidity possibly by lowering the banks’ reserve requirement ratio. Back home, the FBM KLCI closed on a weak note due to profit taking activities after a positive opening as the index closed below the 1,485 level. In view of Wall Street’s performance overnight, we reckon regional markets to experience heighten volatility hence should add some pressure on the local bourse as we anticipate the benchmark index to trend between 1,480- 1,490 range today. We reckon Tech stocks may face with some headwinds today on the back of the surge in Treasury yields in the US.

Source: Rakuten Research - 17 Feb 2023

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