Previous Day Highlights

The FBM KLCI closed lower amid the regional sell-down. The benchmark index lost 0.53% or 7.46 points to close at 1,411.54. Losers were led by HLFG, NESTLE and KLK. Market breadth was negative with 517 losers against 317 gainers. Total volume stood at 2.46bn shares valued at RM1.66bn.

Key regional indices closed mostly lower. Nikkei 225 lost 0.42% to close at 30,957.77. Meanwhile, HSI and SHCOMP fell 1.25% and 1.52% to end at 19,431.25 and 3,246.24 respectively. STI gained 0.24% to 3,218.95.

Wall Street closed lower due to US debt ceiling concerns. The DJIA lost 0.69% to end at 33,055.51. S&P500 and Nasdaq slumped 1.12% and 1.26% to end at 4,145.58 and 12,560.25 respectively.

News For The Day

MISC unit to receive US$233.6m as early settlement for FSU hire fees from PETGAS

MISC’s wholly-owned subsidiary Gas Asia Terminal (L) Pte Ltd (GATL) has entered into an agreement with Regas Terminal (Sg Udang) SB (RGTSU) for a one-off prepayment of US$233.6m as early settlement of the capex hire fees payable for the remaining charter period of its two floating storage units at LNG Regas Terminal Sungai Udang in Melaka. RGTSU is a wholly owned subsidiary of Petronas Gas. – The Edge Markets

MCMC to strengthen regulations to ensure quality of 5G services, says Anwar

To avoid repeating history, Prime Minister Datuk Seri Anwar Ibrahim said the Malaysian Communication and Multimedia Commission’s (MCMC) regulatory framework and role are to be strengthened to ensure good coverage and quality of Malaysia’s 5G network. Anwar noted that with the government’s decision for the nation’s 5G rollout to a dual wholesale network (DWN) once the network under Digital Nasional Bhd reaches 80% coverage of populated areas, healthy competition coupled with a strict regulatory framework under the MCMC will ensure the provision of quality 5G services at a reasonable price. - The Edge Markets

Kerjaya Prospek reports higher net profit of RM29.4m in 1QFY23; declares two sen dividend

Kerjaya Prospek Group reported its 1QFY23 net profit of RM29.4m, a slight increase from RM28.86m YoY. The rise in net profit was due to higher interest income of RM1.71m during the quarter compared with RM872,000 YoY. The group has proposed to declare an interim dividend of two sen per share, to be payable on July 6. -The Edge Markets

Sports Toto confident of maintaining market share

SPToto’s 3QFY6/23 net profit tumbled 70.8% YoY to RM23.22m. The weaker results were due to the performance of STM Lottery SB and H.R. Owen Plc reported a YoY drop in revenue and PBT. SPToto has declared a third interim dividend of 2sen/share where the entitlement date has been fixed on June 30. -The Star

Sarawak state’s acquisition of 4.95% a 'positive endorsement' of Affin Bank, says CEO

Affin Bank sees the Sarawak state’s acquisition of a 4.95% stake in the group as a “positive endorsement” of the bank, its president and group CEO Datuk Wan Razly Abdullah Wan Ali.- The Edge Market

Our Thoughts

Wall Street fell as discussion on the US debt ceiling continues to drag on without any outcome in sight. As a result, the DJI Average lost 231 points while the Nasdaq declined by 160 points notwithstanding the US 10-year yield closed lower at 3.698%. Similarly, Hong Kong stocks also ended lower as the HSI declined by 247 points as the protracted debt ceiling negotiations and heightening tension between China and the US continue to weigh on sentiment. Amid the weakness, pharmaceutical stocks surged as the Chinese authorities said that more vaccines are made available to curb the new Covid wave. Back home, the FBM KLCI closed lower in the absence of any bargain hunting activities. The sell-down on heavyweights was broad-based as sentiment was affected by regional weaknesses. For today, we reckon the index to trend within the 1,405-1,415 range as investors may stay side-lined until the US resolves its debt ceiling woes. Meanwhile, strong demand drove crude oil prices higher as the Brent crude climbed closer to US$78/barrel.

Source: Rakuten Research - 24 May 2023

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