Previous Day Highlights

FBM KLCI closed lower as investors are reluctant to make significant move ahead of the 2023 Budget re-tabling. The benchmark index lost 0.43% or 6.35 points to close at 1,4657.65. Losers were led by PCHEM, JLBANK and TM. Nonetheless, market breadth was positive with 480 gainers against 408 losers. Total volume stood at 3.32bn shares valued at RM2.25bn.

Key regional markets ended lower following negative cue from Wall Street performance overnight. HSI and SHCOMP lost 0.35% and 0.11% to finish at 20,351.35 and 3,287.48 respectively. STI declined 1.04% to 3,264.93. Nikkei225 was closed.

Wall Street trended mostly higher. The DJIA and S&P500 gained 0.33% and 0.53% to close at 33,153.91 and 4,012.32 respectively. Meanwhile, Nasdaq advanced 0.72% to end at 11,590.40.

News For The Day

Maxis posts RM1.8bn net profit for FY22, declares 5sen dividend

Maxis' FY22 net profit fell by 9.7% to RM1.18bn due to the effect of Prosperity Tax. The company declared an interim dividend of 5sen per share bringing the full-year dividend to 20 sen per share. – NST

IJM’s 3QFY23 earnings hit by a bigger share of associate's and forex losses

IJM Corp’s 3QFY3/23 net profit fell by 24% YoY to RM74.8m dragged by the construction sector due to high share of losses from its Singapore associate and unrealised foreign exchange losses. With a wide array of highly sought after products in strategic locations and its unbilled sales of about RM3.4bn, the property division is expected to deliver a better performance for the financial year. - The Edge Markets

Genting 4Q revenue jumps 32% to RM6.36bn

Genting’s 4QFY22 revenue rose 32% YoY to RM6.36bn, which came mainly from its leisure and hospitality division. The company said adjusted EBITDA improved by 18% YoY to RM1.9bn. - The Star

Hap Seng’s 4Q profit drops 67% on lower contribution from plantation, property divisions

Hap Seng Consolidated’s 4QFY22 net profit dropped 67.4% YoY to RM98m due to lower contribution from its plantation and property divisions. FY22 net profit improved 5.6% YoY to RM950.7m due to a lower tax expense which was attributable to capital gains not subjected to tax. – The Edge Markets

Malakoff net profit rose 19.6% to RM255m in FY22

Malakoff Corporation's FY22 net profit rose 19.6% YoY to RM255mn primarily due to higher contribution from Tanjung Bin Power SB (TBP) given the higher applicable coal price (ACP), insurance claims on the forced outage that occurred at Tanjung Bin Energy SB (TBE) power plant, a higher share of profit from associates and JV and the absence of the write-off of Segari Energy Ventures SB’s deferred expense which was registered in the previous year. -NST

YTL Power 2Q net profit jumps to RM198.82m

YTL Power International’s 2QFY6/23 net profit soared to RM198.8m due to higher earnings in the power generation division. On prospects, the group expects the performance of its business segments to remain resilient due to the essential nature of its operations and will continue to closely monitor the related risks and impact on all business segments. -The Star

Our Thoughts

Wall Street ended higher after volatile trading sessions as investors remained concerned about the path of the US Federal Reserve’s rate hikes. The Dow gained 109 points as the US 10-year yield eased 3 basis points at 3.921%. The US Fed indicated that inflation is still above the central bank’s target of 2%, although data has shown some decline in the monthly pace of price increases. In HK, the HSI ended marginally lower following a heavy regional selldown as investors responded negatively to the FOMC meeting minutes. Back home, FBM KLCI fell by 0.43% to 1,457.65 in a lacklustre market ahead of the re-tabling of Budget 2023 today. We reckon the recent selldown offers more potential upside as the FBM KLCI’s forward PER fell to below 13x, far from its as compared with its 5 years average of around 18x. Hence, we anticipate bargain hunting to emerge and reckon the benchmark index to stage a rebound today, trending within the 1,460-1,475 range. Buying interests may return to Telco stocks after a strong selldown yesterday.

Source: Rakuten Research - 24 Feb 2023