Previous Day Highlights

FBM KLCI ended in negative territory due to weak market sentiment and lack of buying support despite the upbeat regional performance. The benchmark index eased 0.13% or 1.94 points to close at 1,453.55. Losers were led by NESTLE, PETDAG, and PPB. Overall, market breadth was positive with 520 gainers against 338 losers. Total volume stood at 2.69bn shares valued at RM1.89bn.

Key regional indices were mostly higher thanks to the bullish survey showing a jump in China services. Nikkei 225 climbed 1.56% to close at 27,927.47. Both the HSI and SHCOMP increased 0.68% and 0.54% to end at 20,567.54 and 3,328.39 respectively. Meanwhile, STI closed flat at 3,232.02.

The 3 major US indices ended broadly higher on last Friday as US treasury yields eased from its recent highs. The DJIA jumped 1.17% to end at 33,390.97, while the S&P 500 and Nasdaq both soared 1.61% and 1.97% to end at 4,045.64and 11,689.01 respectively.

Our Thoughts

Wall Street closed broadly higher as traders are hoping that recent cumulative rate hikes by the Federal Reserves will be sufficient to tame inflation as the US 10-year yield eased to 3.96%. The DJI Average added 387 points while the Nasdaq gained 226 points. Over in Hong Kong, the HSI rebounded by 138 points as investors are hoping that improved economic activities in China will underpin corporate earnings growth. Meanwhile according to UBS, Chinese household savings due to the 3-year lockdown may probably generate as much as RMB600bn (USD87bn) of inflows into stocks that should add further impetus to equities. On the home front, the FBM KLCI ended almost 2 points lower despite broad-based accumulation on blue chips last Friday. Market undertone remained cautious as investors are eyeing at Bank Negara Malaysia’s MPC meeting on Wednesday and Thursday if the OPR will be adjusted. Our stance is that BNM will maintain the OPR at current level for now. Nonetheless, we reckon the index to trend between 1,450-1,460 range today with interests possibly centre on Energy stocks following a strong closing of crude oil prices that saw the Brent crude at almost USD86/barrel buoyed by China’s higher economic activities.

News For The Day

Fajarbaru secures RM311m contract from WCT

Fajarbaru Builder Group has won a RM310.54m contract via a tender exercise from WCT Holdings to undertake the main building works for the residential condominium towers located in Mont Kiara, Kuala Lumpur. Fajarbaru said its wholly owned unit Fajarbaru Builder SB has accepted a letter of award from Kekal Kirana SB, an indirect subsidiary of WCT. The tenure for the contract is 35 months, commencing from March 15, 2023.– The Edge Markets

Bertam Alliance bags RM82m hotel construction deal

Bertam Alliance will undertake the building and infrastructure works for a hotel block in Kota Kinabalu, Sabah, on a sub-contract basis for RM82m. The property developer and construction contractor said wholly-owned subsidiary Bertam Development SB (BDSB) had accepted the letter of award for the job from Akas Permai SB. BDSB would begin the sub-contract works with immediate effect, with completion targeted for Nov 30, 2024. -NST

Eurospan sells unused property in Kulim for RM7m cash

Eurospan Holdings’ unit is selling its property in Kulim, Kedah, for RM6.95m in cash, which will be utilised for working capital. The group said the 88,060 sq ft land, including a single-storey office building, is presently not in use. A one-off gain on disposal of about RM5.1m will only be recognised upon completion of the proposed disposal. Its wholly owned unit Dynaspan Furniture SB has entered into the sale and purchase agreement with three individuals, namely Khoo Kok Seang, Khoo Kay Sen and Khoo Yi Sen.-The Edge Markets

Heng Huat Resources' 3Q net earnings jumped to RM9.48m

Heng Huat Resources Group's 3QFY3/23 net profit surged 611.9% YoY to RM9.48m from RM1.33m due to the higher sales generated from the newly-acquired furniture business arm. The increase in net profit was supported by the one-off nonrecurring transaction from the fire insurance compensation on its biomass, materials and related products and the lower administration expenses during the quarter.-NST

Proton sales pick up to 14,033 units in Feb

Proton sold 14,033 units in February, trumping January sales by 20.1% as industry players rushed to fulfil sales tax-exempt bookings before the March 31 deadline. The car maker's February sales, which was 52% improved over the same month last year, boosted YTD sales volume to 25,714 units, an 88% increase over the same two months in 2022. -The Star

Source: Rakuten Research - 6 Mar 2023