Previous Day Highlights

The FBM KLCI retreated and ended lower under selling pressure, particularly in the financial and telco sectors. The benchmark index lost 0.67% or 9.54 points to close at 1,419.00. Losers were led by PPB, HLFG and TENAGA. Market breadth was negative with 529 losers against 325 gainers. Total volume stood at 2.79bn shares valued at RM1.80bn.

Key regional indices closed on a positive note despite concerns about the US debt ceiling. Nikkei 225 and STI advanced 0.90% and 0.27% to close at 31,086.82 and 3,211.09. Meanwhile, HSI and SHCOMP rose 1.17% and 0.39% to close at 19,678.17 and 3,296.47 respectively.

Wall Street trended mixed as traders remained drawn to the debt-ceiling showdown in Washington. The DJIA lost 0.42% to end at 33,286.58 whereas Nasdaq climbed 0.50% to close at 12,720.78. Meanwhile, S&P 500 closed flat at 4,192.63.

News For The Day

Petronas Gas 1Q net profit rises to RM424.18m

Petronas Gas’s 1QFY23 net profit rose to RM424.18m from RM410.58m YoY due to lower tax expenses. Revenue jumped 14.9% YoY to RM1.67bn from RM1.46bn, mainly contributed by higher revenue from the Utilities segment in line with higher product prices. Its board had approved a first interim dividend of 16 sen per ordinary share for FY23, to be paid on June 20, 2023. -NST

PetDag’s 1Q net profit jumps 2.5 times

Petronas Dagangan’s 1QFY23 net profit jumped 2.5 times YoY to RM301.84m from RM118.49m, driven by higher gross profit from all segments, in line with higher volume sold. PetDag said the better earnings were driven by the opening of international borders, as well as the festive season and school holidays in 1QFY23. The group declared an interim dividend of 15 sen per share, payable on June 20. -The Edge Markets

SunCon 1Q net profit down 20%

Sunway Construction Group’s 1QFY23 net profit fell 19.38% YoY to RM27.83m from RM34.52m, on the back of lower contribution from its construction segment. Quarterly revenue dropped 16.41% YoY to RM522.13m from RM624.66m. The group replenished a new order book worth RM1.28bn in 1QFY23. -The Edge Markets

Taliworks 1Q net profit down 5% on higher share of losses

Taliworks Corp's 1QFY23 net profit fell 4.96% YoY to RM10.06m from RM10.58m attributed to a higher share of losses reported by its associates, higher depreciation and amortisation expenses, and lower other operating income. Quarterly revenue rose 24.97% YoY to RM93.53m from RM74.85m, on the back of higher revenue from operating subsidiaries. Taliworks declared a first interim dividend of 1.65 sen per share, to be paid on June 30.-The Edge Markets

Cahya Mata Sarawak's 1Q net profit falls to RM42.56m

Cahya Mata Sarawak recorded a lower 1QFY23 net profit of RM42.56m against RM72.02m YoY amid lower profit contributions from associates. Revenue, however, rose 29% YoY to RM275.67m from RM214.04m due to higher contributions from cement and oil tools divisions. -The Star

Duopharma's 1Q net profit up 12%

Duopharma Biotech’s 1QFY23 net profit rose 11.54% YoY to RM22.63m from RM20.29m, on the back of higher revenue amid increased sales to the prescription pharmaceutical market. Quarterly revenue grew 7.82% YoY to RM200.48m from RM185.94m.-The Edge Market

Our Thoughts

US stocks closed on a mixed note amid a fresh round of negotiations on the US debt ceiling with the deadline looming in 2 weeks. While the DJI Average lost 140 points, the Nasdaq added 63 points despite the US 10-year yield inching higher at 3.719%. Over in Hong Kong, equities gained as the HSI rebounded by 228 points spurred by a surge in tech stocks following Beijing’s ban on Micron Technology that propel a rally for the Chinese chip makers thus within the broader Tech sector. On the home front, the FBM KLCI fell to below the 1,420 mark primarily due to the selling on selective banking heavyweights. Nonetheless, we reckon bargain hunting on the banks may surface today as we deem the recent sell-down on the sector may have been overdone. As such, we reckon the index to trend higher today possibly trending between the 1,420-1,430 range today. Another interesting development is that, despite recent slump in CPO futures, Plantation stocks remained rather resilient attributed to continuous buying support.

Source: Rakuten Research - 23 May 2023

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