Rakuten Trade Research Reports

Daily Market Report - 22 May 2023

Publish date: Mon, 22 May 2023, 08:51 AM
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Previous Day Highlights

The FBM KLCI pared earlier losses to end the day marginally higher as sentiment remained mixed on erratic buying patterns. The benchmark index gained a mere of 0.04% or 0.50 points to close at 1,428.54. Gainers were led by HLFG, PETGAS and PMETAL. However, market breadth was negative with 457 decliners against 360 advancers. Total volume stood at 2.85bn shares valued at RM1.81bn.

Major regional indices trended mixed as investors struggled between optimism over a US debt ceiling deal and weaker signs of China's recovery. Nikkei 225 and STI climbed 0.77% and 0.63% to close at 30,808.35 and 3,202.59. Meanwhile, HSI and SHCOMP dipped 1.40% and 0.42% to close at 19,450.57 and 3,283.54 respectively. Wall Street ended in negative territory weighed down by concerns over the debt-ceiling deadline. The DJIA and S&P 500 dropped 0.33% and 0.14%, respectively to end at 33,426.63 and 4,191.98 while Nasdaq fell by 0.24% to close at 12,657.90.

News For The Day

Maxis books RM320m net profit in 1Q

Maxis reported its 1QFY23 net profit of RM320m, up 7.38% YoY from RM298m, amid higher earnings before interest and taxes as well as discontinuation of property tax. Maxis declared a first interim dividend of four sen per share, to be paid on June 28. Revenue for the quarter rose 4.99% YoY to RM2.53bn from RM2.41bn due to higher service revenue fuelled by strong growth from both consumer and enterprise businesses.-The Edge Markets

PIE Industrial 1Q net profit shrinks 27%

PIE Industrial registered 1QFY23 net profit of RM14m, 26.67% YoY decline from RM19.10m, despite registering a higher revenue. According to the company, “The decrease was mainly attributable to higher administrative and distribution expenses, provision for slow-moving inventories and impairment of trade receivables in the current quarter”.-The Edge Markets

MSC Q1 net profit fell 45% to RM35.41m

Tin miner and metal producer Malaysia Smelting Corporation's (MSC) 1QFY23 net profit fell 45% YoY to RM35.41m from RM64.34m. Quarterly revenue dropped 5.4% to RM340.06m from RM359.48m, mainly due to a lower average tin price of RM116,100 as compared with RM180,000 YoY per metric tonne, despite higher sales quantity of refined tin in 1QFY23.-NST

Hextar Global 1Q net profit down 44% on lower revenue

Hextar Global’s 1QFY23 net profit dropped 44.85% YoY to RM8.63m from RM15.65m, on lower revenue and margin contribution, coupled with higher operating expenses. Quarterly revenue was down by 6.7% YoY to RM143.33m from RM153.63m, due to persistent lower selling prices of agrochemicals products. The group is optimistic about the outlook of the agriculture industry as population expansion will lead to growing demand for foods.-The Edge Markets

Edelteq delays listing to June 7 amid CEO's legal tussle

Edelteq Holdings has postponed its scheduled listing on the ACE Market of Bursa Malaysia to June 7 from May 30, after its chief executive officer Chin Yong Keong was sued by his former employer Mi Technovation for alleged breach of employment contracts and abuse of legal process. UOB Kay Hian Securities (M) SB said investors who wish to withdraw their applications for the initial public offering (IPO) shares may submit their applications to do so from May 20 to 5pm on May 26.- The Edge Market

Our Thoughts

Wall Street ended on a weak note as optimism over a positive outcome for the US debt ceiling waned as negotiations were halted indefinitely. As a result, the DJI Average lost 109 points while the Nasdaq dipped 39 points as the US 10-year yield continued to trend higher currently at 3.682%. In Hong Kong, equities slumped with a 277-point decline following a weaker than expected results from Alibaba further indicating that the recovery from China may be losing momentum. Back home, trading on the local bourse remained lacklustre as the FBM KLCI closed flat attributed to some late buying on banking stocks. In view of the uncertainty from the US, we reckon regional sentiment to stay fragile hence expect the FBM KLCI to be under some selling pressure. Therefore, we believe the index to hover within the 1,420- 1,430 range today with continued headwinds on the Plantation sector as the crude palm oil (CPO) futures fell below the RM3,400/tonne level or almost a 7-month low on slower demand.

Source: Rakuten Research - 22 May 2023

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