Previous Day Highlights

FBM KLCI ended in positive territory thanks to accumulation on plantation and consumer related counters. The benchmark index gained 0.22% or 3.08 points to close at 1,425.19. Gainers were led by NESTLE, KLK and PPB. Market breadth was negative with 562 losers against 329 gainers. Total volume stood at 2.57bn shares valued at RM1.55bn.

Key regional markets were mostly lower except for Nikkei 225 which added 0.09% to close at 28,620.07. Meanwhile, HSI, SHCOMP and STI fell by 1.71%, 0.32% and 0.84%, respectively, to end at 19,617.88, 3,264.87 and 3,296.56.

Wall Street tumbled after earnings from First Republic Bank reignite worries over the banking sector. The DJIA dived 1.02% to end at 33,530.83 whereas S&P500 and Nasdaq slumped 1.58% and 1.98% to end at 4,071.63 and 11,799.16 respectively.

News For The Day

Nestlé Malaysia's 1Q earnings weighed down by higher

commodity prices Nestlé (Malaysia)’s 1QFY12/23 net profit eased 3.9%, pressured by higher commodity prices and unfavourable foreign exchange rates, even as revenue improved. Net profit declined to RM197.15m for the quarter from RM205.18m YoY, on the back of an 8.8% growth in revenue to RM1.84bn from RM1.69bn. -The Edge Markets

Bumi Armada completes sale for RM88.9m

Bumi Armada Bhd’s wholly-owned subsidiary, Armada Balnaves Pte Ltd, has completed the sale of the Armada Claire floating production storage and offloading (FPSO) vessel for US$20m (RM88.9m). Bumi Armada said it will recognise a gain on sale of the Armada Claire FPSO of approximately US$12m(RM53m) in its 2QFY23. Proceeds from the sale, net of transaction fees, will be applied towards a reduction of Bumi Armada group’s corporate debt. -The Star

Ranhill Worley wins RM210m engineering design contract

Ranhill Utilities’ subsidiary, Ranhill Worley SB has secured a RM210m (US$50m) contract from a wholly owned subsidiary of Saipem S.p.A. of Italy. Ranhill said the contract was to perform detailed engineering design for two compression complexes associated with the north field production sustainability (NFPS) offshore compression complexes project. Ranhill said the engineering design work is expected to be completed by the 3QCY24.-The Star

Advancecon bags RM11.54m ECRL subcontract

Advancecon Holdings’ unit has been appointed as a subcontractor for the construction and completion of subgrade earthwork of section five of the East Coast Rail Link (ECRL) project for RM11.54m. Advancecon said its indirect 51%- owned subsidiary Spring Energy SB (SESB) accepted the award letter from China Communications Construction (ECRL) SB for the appointment. The job is expected to complete in September.– The Edge Markets

Lebtech unit wins RM55.3m job in Pekan

Lebtech Bhd’s unit has won a RM55.3m job for reclamation, shore protection and revetment sub-contract in Pekan, Pahang from Vista Infinity Development SB. The job will span 33 months starting from May 3, involving sand supply, site management and mobilising all dredging plant and equipment necessary for the project.- The Edge Markets

Our Thoughts

Wall Street slumped after a decent opening as weak earnings from First Republic Bank that saw its deposits declined by 40% for the 1Q 2023 reignited concerns over the broader sector. As such, the DJI Average declined by 344 points while the Nasdaq lost 238 points while the US 10-year yield eased to the 3.40% level as outlook for the US economy is not as promising. Meanwhile Hong Kong equities succumbed to strong selling as investors believe that prevailing valuations may have gone beyond actual fundamentals especially for major tech companies. As a result, the HSI plunged 342 points or to a 4-week low. Back home, some bargain hunting activities helped the FBM KLCI to close in positive territory despite overall sentiment remains cautious. We anticipate a similar trading pattern on the local bourse today ahead of the FOMC meeting next week hence expect the index to hover between the 1,420-1,430 range. Meanwhile, concerns over the US banking sector spooked crude oil prices as well with the Brent crude dropping to below US$81/barrel thus may see some headwinds for the Oil & Gas counters today.

Source: Rakuten Research - 26 Apr 2023

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