Previous Day Highlights

FBM KLCI extended its fall and dipped below 1,400 marks, in tandem with the weak regional markets as sentiment remain fragile. The benchmark index fell by 0.80% or 11.28 points to close at 1,399.70. Losers were led by PETGAS, PCHEM and AMBANK. Market breadth was negative with 496 losers against 339 gainers while 440 counters were unchanged. Total volume stood at 2.99bn shares valued at RM1.91bn.

Key regional indices ended lower as investors remained wary that the global banking crisis could worsen. Nikkei 225 and STI lost 0.13% and 0.20% to end at 27,385.25 and 3,212.64. Meanwhile, HSI and SHCOMP declined 0.67% and 0.64% to finish at 19,915.68 and 3,265.65 respectively.

Wall Street ended higher on Friday after a volatile week attributed to Federal Reserve officials calmed investor worries on bank fears. The DJIA and S&P500 rose 0.41% and 0.56% to end at 32,237.53 and 3,970.99 whereas Nasdaq was up 0.31% to close at 11,823.96.

News For The Day

Konsortium Transnasional bags RM153m construction job

Konsortium Transnasional has secured a RM153.09m contract to provide labour and materials for the construction of a Perumahan Rakyat 1Malaysia (PR1MA) housing project in Pahang. The company said its wholly-owned subsidiary Transnational Builder SB received the letter of award from Aman Wijaya SB for the project. The housing project are expected to take place between July 2023 and June 2026.-The Edge Markets

Dnex in JV to tap into opportunities in Mena region

Dagang NeXchange (DNeX) and Ajlan & Bros Holding Group have teamed up to "revolutionise" smart cities integration and large IT projects in Saudi Arabia as well as other countries in the Middle East and North Africa (MENA). The JV was poised to undertake the business of systems integration in smart cities and large enterprise projects. DNeX will provide subsequent maintenance of the ICT infrastructure and applications while providing service delivery management to oversee its project deliverables. -NST

Swift Haulage ups stake in warehouse provider for RM19m

Swift Haulage has increased its stake in Global Vision Logistics SB (GVLSB) after it acquired a 17.5% stake in the latter for a total purchase consideration of RM19.16m, bringing the group’s ownership in the warehouse service provider to 42.5%. Swift Haulage said the 17.5% stake comprises 437,500 ordinary shares and 1.31m preference shares of GVLSB. -The Edge Markets

Metrod declares six sen dividend, payable on Aug 25

Copper rod producer Metrod Holdings declared a final dividend of 6sen per share for FY22 that will be paid on Aug 25. The ex-date falls on July 27 and the entitlement date is July 28. The group's FY22 net profit about doubled to RM17.04m from RM8.64m YoY, as revenue grew 18.16% YoY to RM4.15bn from RM3.51bn.-The Edge Markets

Salcon unit and Exsim Kebun Teh in JV land development

Salcon's indirect subsidiary Nusantara Megajuta SB (NMSB) entered into a JV agreement with Exsim Kebun Teh SB (ETKSB) for the development of two pieces of land in Johor Bahru. The company said the JV will undertake a multiple phased mixeduse development consisting of service apartments and retail units on two pieces of 99 years’ leasehold land owned by NMSB. The JV is expected to be completed within 2QCY28 and will contribute positively to the earnings of the Salcon group for FY24 onwards. -The Star

Our Thoughts

Wall Street closed higher last Friday despite fears that the banking crisis was spilling over to Deutsche Bank. The selling of Deutsche Bank's stocks had a negative impact on market sentiment, however the market was supported by buying momentum in megacap tech and other sectors, which helped to lift all major indexes into positive territory. The DJIA gained more than 130 points while S&P500 and Nasdaq added 22 and 36 points respectively. Over in Hong Kong, the HSI closed marginally lower as investors are worried that more banks might suffer a debilitating outflow of customers following the second and third largest US bank failures in history. Back home, FBM KLCI fell below the 1,400 mark due to negative sentiment across the region. We believe the recent banking crisis in the US and Europe has very little impact to Malaysia as our banking system is highly regulated whereby asset quality risks are well contained. However, due to uncertain global and regional conditions, we expect short-term market sentiment to remain nervous. Having said that, the local benchmark index is still in oversold position, thus we expect bargain hunting to emerge and anticipate the FBM KLCI to trend within the 1,400-1,410 for today.

Source: Rakuten Research - 27 Mar 2023

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