Previous Day Highlights

FBM KLCI ended lower amid lacklustre trading, in tandem with the downbeat performance in regional markets. The benchmark index lost 0.68% or 10.01 points to close at 1,464.00. Losers were led by PPB, PETGAS and KLK. Market breadth was negative with 654 losers against 273 gainers. Total volume stood at 3.51bn shares valued at RM2.07bn.

Key regional markets ended broadly lower taking negative cue from Wall Street performance overnight. Nikkei 225 and STI fell by 1.34% and 0.21% to close at 27,104.32 and 3,300.04 respectively. Meanwhile, HSI and SHCOMP declined 0.51% and 0.47% to finish at 20,423.84 and 3,291.15 respectively.

Wall Street trended mostly lower after investors weighted on expectation for higher interest rates to tame inflation. The DJIA and S&P500 weakened 0.26% and 0.16% to close at 33,045.09 and 3,991.05 respectively. Meanwhile, Nasdaq inched 0.13% higher to end at 11,507.07.

News For The Day

Petronas Dagangan net profit for FY22 rises to RM776.60m

Petronas Dagangan’s FY22 net profit rose to RM776.60m compared to RM529.75m YoY, revenue expanded to RM36.75bn from RM22.67bn. The higher net profit was mainly contributed by higher gross profit from all segments following an increase in demand during the period, it said. The petrol station operator declared a dividend per share of 40 sen, totalling dividend to 76 sen per share for the FY22.-The Star

Gamuda buys Australian project for RM636m

Gamuda's wholly-owned Australian sub-subsidiary DT Infrastructure Pty Ltd (DTI) has executed an asset sale agreement to buy Downer's Australian transport projects (DTP) business from Downer EDI Works Pty Ltd and VEC Civil Engineering Pty Ltd, for AU$212m (RM636m). Gamuda said the cash deal, which is expected to be completed by June, will be financed by internal generated funds and borrowings. -NST

Nestle to acquire Wyeth Nutrition Malaysia for RM165m

Nestle (M)’s wholly-owned subsidiary Nestle Products SB has proposed to acquire Wyeth Nutrition (M) SB (Wyeth Malaysia) for RM165m. “The acquisition, which is subject to regulatory requirements and shareholders’ approval, marks Nestle Malaysia’s aim to solidify its footprint in the premium infant and adult nutrition segments,” it said. –The Star

AEON declares higher dividend as annual profit up 30.4%

AEON Co (M)’s 4QFY22 net profit plummeted 64.9% YoY to RM24.92m from RM70.98m, mainly due to an increase in promotional activities, maintenance costs and lower reversal of impairment of receivables. It declared a final dividend of four sen for FY22. -The Edge Markets

Apex Healthcare's 4Q net profit up 68

Apex Healthcare’s 4QFY22 net profit jumped 68.25% YoY to RM34.84m from RM20.7m, on the back of higher share of results of an associate company as well as favourable foreign exchange gain. Apex Healthcare has declared a final dividend of 3.5 sen per share and proposed a one-for-two bonus issue of shares to reward its existing shareholders. -The Edge Markets

Power Root’s 3Q net profit surges 87% YoY

Higher sales in local and export markets boosted Power Root’s 3QFY3/22 net profit by 87.14% YoY to RM11.28m from RM6.03m. Quarterly revenue rose 11.65% YoY to RM106.68m from RM95.55m. The group has declared an interim dividend of 2.25 sen per share. -The Edge Markets

Our Thoughts

Wall Street ended broadly lower after exchanging with gains and losses as the minutes from the Federal Reserve’s February meeting added to expectations that further rate hikes are in the pipeline to squeeze inflation. Over in HK, the HSI close marginally lower due to market correction amid the regional selldown overall on cautious sentiment as investors weighed the prospect of central banks tightening policy more than previously expected to tame inflation. Back home, FBM KLCI closed lower in a lacklustre market with broad based selling due to absence of buying catalyst. We reckon the FBM KLCI to stage a rebound and expect it to hover within the 1,465-1,475 range for today. We believe Oil and Gas may continue to see some selling pressure as Brent Crude fell to below USD80 per barrel.

Source: Rakuten Research - 23 Feb 2023