Previous Day Highlights

The FBM KLCI rebounded as market sentiment turned positive in tandem with the upbeat performance across the region. The benchmark index gained 0.26% or 3.70 points to close at 1,428.04. Gainers were led by PPB, NESTLE and HLBANK. Market breadth was positive with 477 gainers against while 355 losers. Total volume stood at 2.65bn shares valued at RM1.82bn.

Key regional markets all closed on a positive note, taking cue from Wall Street performance overnight. Nikkei 225 and STI rose 1.60% and 0.27% to close at 30,573.93 and 3,182.55. Meanwhile, HSI and SHCOMP ended 0.85% and 0.40% higher to close at 19,727.25 and 3,297.32 respectively.

Wall Street ended in positive territory as investor remain optimistic over the debt ceiling deal. The DJIA and S&P 500 advanced 0.34% and 0.94%, respectively to end at 33,535.91 and 4,198.05 whereas Nasdaq soared 1.51% to close at 12,688.84.

News For The Day

Supermax posts 3Q net loss of RM39.92m

Supermax Corp posted 3QFY6/23 net loss of RM39.92m from a net profit of RM13.01m YoY. Revenue dropped to RM175.74m from RM407.80m YoY, the latex glove maker said the worsening operating environment has seen the group’s revenue and losses decline significantly, mainly due to the continued fall in glove average selling prices (ASPs) and rising costs. -The Star

Pharmaniaga logs RM2.6m net profit in 1QFY23

Pharmaniaga’s 1QFY23 net profit plunged to RM2.65m, barely 10% of the RM27.73m YoY. The latest figures were also a far cry from its pre-pandemic levels attributed the big earnings contraction to lower customer demand in both its concession and Indonesia operations. On top of that, it incurred higher financial cost as a result of the increase in the Overnight Policy Rate. -The Edge Markets

AEON's net profit grows 36% in 1QFY23

AEON Co (M)'s 1QFY23 net profit grew 36.06% YoY to RM38.18m from RM28.07m, mainly contributed by the increase in revenue and gross margin. Quarterly revenue rose 10.48% YoY to RM1.11bn from RM1bn, supported by higher contributions from its retail business and property management services segments-The Edge Markets

Gas Malaysia records higher 1Q net profit of RM95.1m

Gas Malaysia posted its 1QFY23 net profit of RM95.1m, as compared with RM91.32m YoY. Revenue meanwhile was RM2.44bn, up from RM1.78bn YoY due to higher average selling price of natural gas, in tandem with the global market prices. -The Edge Markets

ITMAX System 1Q net profit surges 127% to RM15.19m

ITMAX System's 1QFY23 net profit jumped 127.4% YoY to RM15.19m from RM6.68m on the back of improvements in both the video surveillance and analytics services segment, and the supply, installation, and maintenance service segment. The company said revenue for the quarter surged to RM34.68m from RM19.26m YoY. -The Edge Markets MHB’s net profit rose 30% in 1QFY23, revenue up 19% Malaysia Marine and Heavy Engineering Holdings (MHB)’s 1QFY23 net profit rose of 30% YoY to RM3.54m from RM2.72m. The group’s revenue saw a hike of 18.77% YoY to RM496.23m from RM417.78m, on the back of higher revenue from their heavy engineering segment. - The Edge Market

Our Thoughts

Wall Street ended higher as traders are betting on a positive outcome from the ongoing negotiations regarding the US debt ceiling. As a result, the DJI Average gained 115 points while the Nasdaq jumped 188 points higher despite the US 10-year yield’s continuous climb currently at 3.651% or almost a 2-month high. Over in Hong Kong, the HSI added 167 points as traders are looking to more supportive government policies following a spate of disappointing economic data from China. As for the local bourse, the FBM KLCI closed in positive territory attributed to rotational plays on selected heavyweights despite still being stuck in a consolidation phase. In view of this, we reckon 1,430 is now a strong resistance for the index and must be broken decisively before looking at the next phase. We believe recent selling on the Banks has been largely unjustified and may see some bargain hunting activities on the sector hence anticipate the index to possibly trend within the 1,425-1,435 range today.

Source: Rakuten Research - 19 May 2023

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