Previous Day Highlights

The FBM KLCI ended marginally lower on Friday, as selling pressure persisted on plantation and financial service blue chips. The benchmark index lost a mere 0.15% or 2.10 points to close at 1,415.95. Losers were led by KLK, HLFG and PPB. Market breadth was negative with 427 decliners against 398 advancers while 414 counters were unchanged. Total volume stood at 2.64bn shares valued at RM1.49bn.

Key regional markets including HSI, SHCOMP, and STI, were closed on Monday for Labour Day holiday. Meanwhile, Nikkei 225 gained 0.92% to close at 29,123.18, reaching its 8-month high, on the back of solid earnings reports and weaker yen.

Wall Street closed on a weak note as investors monitored the health of regional banks and the Federal Reserve's rate decision. The DJIA and Nasdaq lost 0.14% and 0.11% to end at 34,051.70 and 12,212.60 whereas S&P500 closed flat at 4,167.87.

News For The Day

Maybank Indonesia posts 46% rise in 1Q profit

Malayan Banking’s 98.54%-owned PT Bank Maybank Indonesia Tbk posted a 45.7% YoY rise in its 1QFY1/23 net profit to 566bn rupiah from 388bn rupiah. "This was derived from improved earnings on its assets composition due to increase in loans, as demands for corporate and retail loans increased in line with the improvement in the economy in Indonesia," Maybank Indonesia said.-The Edge Markets

AirAsia X passenger traffic jumps 49 % in 1Q

AirAsia X (AAX) carried 504,476 passengers in 1QCY23, up 49% QoQ from 337,638 passengers, driven by the New Year holidays and spring season travel demand. The carrier said the impressive performance was on the back of increased seat capacity which grew by 47% QoQ to 630,069 seats while available seat kilometres (ASK) surged by 71% QoQ to 2,899m.- The Star

Dufu's 1Q profit drops 40.5% on higher energy costs

Dufu Technology Corp’s 1QFY1/23 net profit dropped 40.59% YoY to RM10.88m from RM18.32m, mainly due to lower revenue in hard disk drive (HDD) components as well as higher raw material costs incurred. Dufu said a slowing down in consumer spending and persistent inflationary pressures have led to capital expenditure reduction by the enterprise and cloud providers, which negatively impacted the demand for large-capacity HDD.-The Edge Markets

DXN eyes RM3.8bn market cap upon Main Market return

DXN Holdings has fixed an initial public offering (IPO) price of up to 76 sen per share, translating into a market capitalisation of RM3.79bn upon its slated Main Market listing on May 19. The dietary supplement direct seller’s IPO comprises a public issuance of 160m new shares or 3.21% of its enlarged share base of 4.99bn shares, and an offer for sale of up to 772.68m shares (15.5%). – The Edge Markets

PGF Capital sees six-fold rise in profit on higher revenue

Glass mineral wool insulation maker PGF Capital's 4QFY2/23 net profit jumped nearly six-fold YoY to RM5.28m, from RM901,000, on higher revenue. Quarterly revenue rose 48.67% to RM24.98m from RM16.8m, mainly attributable to higher production and sales of insulation products. The group has proposed a final tax-exempt dividend of one sen per share for FY23. Adding the first tax-exempt interim dividend of one sen paid in November 2022, this brings total dividend payout of two sen for FY23. -The Edge Markets

Our Thoughts

Wall Street closed in negative territory following JPMorgan Chase takeover of First Republic as many believe that the US banking system is not out of the woods yet. Meanwhile, the FOMC meeting on May 3rd further affects sentiment as a 25bps rate hike should be on the nards. Thus, the DJI Average declined 46 points while the Nasdaq closed 14 points lower as the US 10-year yield edged higher at 3.57%. Both Hong Kong and the local bourse were closed for Labour Day yesterday. Domestically, the FBM KLCI ended slightly lower at 1,415 last Friday ahead of the long weekend. For today, we reckon some accumulation of stocks to emerge and expect the index to trend higher after being stuck in a tight range over the past 3 days. Therefore, we anticipate the index to trend within the 1,415-1,425 range today as we enter into corporate results season this month. Plantation counters may continue to see some headwinds as the crude palm oil price dips to a YTD low at below the RM3,400/tonne level.

Source: Rakuten Research - 2 May 2023

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