Previous Day Highlights

FBM KLCI trended within a narrow range due to absence of fresh buying catalysts ahead of the 2nd tabling of Budget 2023. The benchmark index eased 0.23% or 3.44 points to close at 1,473.46. Losers were led by NESTLE, PETGAS, and TM. Market breadth was negative with 539 losers against 315 gainers while 411 counters remained unchanged. Total volume stood at 3.14bn shares valued at RM2.14bn.

Key regional markets were mostly in positive territory despite the worsened China and US relation. STI fell by 0.59% to close on 3,308.75 whereas Nikkei 225 gained a mere 0.07% to end at 27,531.94. Meanwhile, HSI and SHCOMP both soared 0.81% and 2.06% to finish at 20,886.96 and 3,290.34 respectively.

Nonetheless, Wall Street was closed for Washington's Birthday Holiday.

News For The Day

MBM Resources' 4Q net profit halves to RM57.4m

Automotive trader and parts manufacturer MBM Resources’ 4QFY22 net profit fell by 49% YoY to RM57.41m from RM112.81m due to higher operating costs and lower contributions from associates. Quarterly revenue increased by 16.5% YoY to RM651.40m from RM558.92m thanks to higher revenue from both its motor trading and auto parts manufacturing divisions. - The Edge Markets

YKGI bags RM271.6m contract to build homes in Sarawak

YKGI Holdings has bagged a RM271.62m contract to build affordable houses in Sarawak. YKGI said its 80.36%-owned subsidiary ASTEEL Development SB (ADSB) will undertake the Housing Development Corporation (HDC) project. ADSB will design and build the houses within three years from the date of formal approval of the project by the state planning authority. -The Edge Markets

MRCB posts lower 4QFY22 net profit

Malaysian Resources Corp’s (MRCB) 4QFY22 net profit came in sharply lower at RM13.02m from RM75.21m YoY. The group attributed the lower earnings to the fall in other operating income, which declined by 88% YoY to RM17.01m from RM146.09m. MRCB declared a first and final single tier dividend of one sen per share, payable on May 17, with an exdate of April 26, 2023. –The Edge Markets

MCT acquires Seputeh land for RM58m

MCT is acquiring a 1.57-acre freehold plot of residential land at Seputeh, Kuala Lumpur, for RM58m. MCT said it had entered into an agreement with HPC Development SB for the acquisition, marking the group’s 2023 first land deal.-The Star

Tropicana sells Chin Hin shares to its chairman for RM12.5m

Tropicana Corp, its indirect wholly owned unit Desiran Realiti SB has sold 2.65m shares in Chin Hin Group for RM12.46m via a direct business transaction. The buyer is Tropicana’s executive chairman and major shareholder Tan Sri Danny Tan Chee Sing, who holds a 21.35% direct stake and 33.76% indirect stake in the property developer. -The Edge Markets

Lii Hen's 4Q net profit rises 33.7%

Lii Hen Industries’ 4QFY22 net profit increased 33.7% YoY to RM16.87m from RM12.62m on the back of lower raw materials and stronger US dollar. Quarterly revenue of the furniture manufacturer fell 31.4%, due to sluggish demand for the group’s products, especially for bedroom set, dining and sofa and high level of inventory. -The Edge Markets

Our Thoughts

Wall Street was closed for Washington’s Birthday yesterday. In Hong Kong, expectations of earnings upside attributed to China’s reopening saw the HSI added 167 points to almost the 20,900 mark. Bargain hunting activities also played its part as the benchmark index had declined by 8.7% over the last 3 weeks. Both Baidu and HSBC closed higher as earnings are anticipated to be solid. Back home, the FBM KLCI fell to below the 1,475 level as sentiment remained cautious from the lack of fresh catalysts. We believe trading on the local bourse to stay lacklustre while waiting for the 2nd tabling of Budget 2023 this Friday. As such, we reckon the index to trend within the 1,470-1,480 range today as bargain hunting on Banks may emerge ahead of the 4Q earnings reporting. Meanwhile, a surge in global demand saw crude oil prices rebounded with the Brent crude jumped to US$84/barrel.

Source: Rakuten Research - 21 Feb 2023