Previous Day Highlights

FBM KLCI closed flattish on Friday as late buying activities emerged attributed to the re-tabled Budget 2023. The benchmark index eased 0.06% or 0.85 points to close at 1,456.80. Losers were led by PCHEM, KLK and QL. Market breadth was negative with 535 losers against 419 gainers. Total volume stood at 3.43bn shares valued at RM2.58bn.

Key regional indices trended mixed despite the positive Wall Street performance overnight. HSI and SHCOMP slumped 1.68% and 0.62% to finish at 20,010.04 and 3,267.16 respectively. Nikkei225 and STI gained 1.29% and 0.53% to end at 27,453.48 and 3,282.30 respectively.

Wall Street closed sharply lower following the personal consumption expenditures price index for January came in higher than expected. The DJIA and S&P500 tumbled 1.02% and 1.05% to close at 32,816.92 and 3,970.04 respectively. Meanwhile, Nasdaq dipped 1.69% to end at 11,394.94.

News For The Day

Dutch Lady slips into the red with RM20.2m net loss in 4Q

Dutch Lady Milk Industries slipped into the red, as it booked a net loss of RM20.23m for 4QFY22, from a net profit of RM183.46m YoY. The dairy product maker blamed the quarterly net loss on a RM17.9m one-off restructuring cost and RM25m related to the 2018-2021 bilateral advanced pricing arrangement between the authorities of Malaysia and the Netherlands. – The Edge Markets

CelcomDigi announces 1Q and FY22 report since merger

Digi.com (CelcomDigi) 4QFY22 net profit stood at RM42.82m versus RM304.55m YoY, marking the first time the company combines its financial reporting since completion of the merger. For the FY22 net profit fell to RM763.5m from RM1.16bn YoY, impacted by additional depreciation and finance costs and Cukai Makmur. -The Edge Markets

Padini posts 20% higher quarterly profit

Padini Holdings’ 2QFY6/23 net profit increased 20.1% YoY to RM73.14m from RM60.89m attributed to the higher earnings to the continued recovery from the pandemic, which also resulted in a 19.3% growth in quarterly revenue to RM509.48m from RM427.17m. Padini declared a third interim dividend of 2.5 sen per share, to be paid on March 31. - The Edge Markets

IOI Properties records robust net profit, sales in 2Q

IOI Properties’ 2QFY6/23 net profit more than tripled to RM402m against RM125.7m. The group has achieved commendable sales of RM926.6m in 1H23. Moving forward, the group said the operating environment both within and outside Malaysia would continue to face some headwinds. - The Star

Uzma bags 3-year job worth RM30m from Petronas Carigali

Oil and gas service and equipment provider Uzma has bagged a RM30m contract from Petronas Carigali SB to provide electrical submersible pump equipment and services for the latter's wells in Malaysia SB accepted an award of contract from Petronas Carigali for the job. The duration of the contract will be for three years until Jan 24, 2026. – The Edge Markets

Mestron reports positive FY22 earnings

Specialty pole maker Mestron Holdings posted its FY22 net profit surged to RM10.1m due to the higher sales demands for telecommunication towers and outdoor lighting products amid the faster rollout of the telco infrastructure projects this year following the reopening of the economy. The board has proposed a first interim single-tier dividend of 0.15 sen per ordinary share for FY22. -NST

Our Thoughts

Wall Street closed broadly lower as concerns on inflation heightened following the release of a higher than expected personal consumption expenditure price index that may force the Federal Reserves to maintain high interest regime longer than anticipated. The DJI Average declined by 337 points while the Nasdaq lost 195 points as the US 10-year yield remained at almost 3.95%. In Hong Kong, the HSI slipped 341 points to its lowest level this year at just above the 20,000 mark due to a mixed bag of earnings from major Chinese tech companies coupled with strong headwinds from the US. Back home, the FBM KLCI ended flat from late buying activities spurred by the positive reaction to the re-tabled Budget 2023. We reckon sentiment on the local bourse to remain cautious mainly attributed to the US weakness but with some positive bias. Thus, we reckon the index to hover within the 1,455-1,465 range today with interest on the Banks, Construction and Telco sectors today.

Source: Rakuten Research - 27 Feb 2023