Previous Day Highlights

FBM KLCI ended lower on Friday in tandem with regional weakness as US rate hike weighed on sentiment. The benchmark index lost 0.50% or 7.36 points to close at 1,476.90. Losers were led by PETGAS, GENTING and HLFG. Market breadth was negative with 627 losers against 282 gainers while 414 were unchanged. Total volume stood at 3.27bn shares valued at RM2.10bn. Key regional indices mostly closed on a weak note following Wall Street’s performance. Nikkei 225 declined 0.66% to end at 27,513.13 whereas STI added 0.52% to end at 3,328.37. Meanwhile, HSI and SHCOMP slumped 1.28% and 0.77% to finish at 20,719.81 and 3,224.02 respectively. Wall Street ended mixed amid cautious sentiment as investors bet on more interest-rate hikes by the Federal Reserve. The DJIA rose 0.39% to close at 33,826.69. Meanwhile, SP500 and Nasdaq fell by 0.28% and 0.58% to end at 4,079.09 and 11,787.27 respectively.

Our Thoughts

Wall Street closed mixed as concerns over inflation and spike in rates continue to weigh on sentiment. Therefore, despite the DJI Average added 130 points, the Nasdaq lost 68 points as the US 10-year yield eased lower to just below the 3.82% level. In Hong Kong, the HSI slipped 268 points amid the escalating tension between the US and China with both Lockheed Martin and Raytheon Technologies were sanctioned and fined by China for supplying weapons to Taiwan. On the home front, the FBM KLCI retreated to below the 1,480 mark attributed to broad-based selling especially on Tech related stocks. For today we reckon trading on the local bourse to be subdued ahead of corporate earnings results announcements thus expect the index to hover within the 1,470-1,480 range today. In view of a recovery in crude palm oil prices, we believe Plantation stocks should see some buying support today. Meanwhile, crude prices continue to weaken on the back of stronger US$ and higher rates, as such the Brent crude eased to US$83/barrel from US$86 last week.

News For The Day

MSC 4Q net profit falls 59.6%, proposes seven sen dividend
Malaysia Smelting Corp (MSC) has posted a 59.6% YoY decline in its 4QFY22 net profit to RM25.89m from RM64.07m, due to lower average tin price. The average price fell to RM98,100 per tonne compared with RM158,300 in 4QFY21. For FY22, MSC’s net profit decreased 16.69% YoY to RM98.36m from RM118.06m in despite revenue increasing 39.67% YoY to RM1.5bn from RM1.08bn. The lower earnings were also attributed to a net share loss of RM900,000 at its associate and joint venture firm. The group recommended a first and final dividend of seven sen per share amounting to RM29.4m. -The Edge Markets

KPJ Healthcare reports over 3-fold profit jump in 4Q
KPJ healthcare group’s 4QFY22 net profit surged more than three-fold to RM72.1m. The group said during the quarter under review, patient visits and bed occupancy rate increased to 820,734 patients from 780,221 patients and 64% from 46% respectively. KPJ Healthcare has declared a first interim dividend for FY23 of 0.6 sen per share, with a total aggregate payment of RM27m. -The Star

Haily wins RM78m construction job
Haily Group has bagged a RM78.28m construction contract to build 262 units of residential properties in Pontian, Johor. With this new job, which is the largest contract to date, Haily’s total contract value increased to RM660.77m. The contract will be effective for 20 months from the date of commencement. -The Star

CI Holdings net profit surge 129%
Edible oil manufacturer CI Holdings's 2QFY6/23 net profit surged 129.2% YoY to RM37.18m from RM16.22m, on increased sales and better margin. “The lower container freight rates in 2QFY23 have also resulted in an increase in profit. The US dollar-ringgit average forex rate increased significantly which contributed to higher realized gain in foreign exchange and derivatives,” the group said. -The Edge Markets

Classic Scenic posts record revenue and profit for FY22
Classic Scenic’s 4QFY22 posted a 22.94% YoY increase to RM4.15m from RM3.38m, thanks mainly to the strong US dollar and lower operating expenses. Quarterly revenue was marginally lower at RM17.72m, compared with RM17.90m previously, amid lower export volume of wooden picture frames and moulding. The group’s FY22 net profit jumped 196.41% YoY to RM18.99m from RM6.41m, the highest since the group’s listing in 2004. -The Edge Markets

Source: Rakuten Research - 20 Feb 2023