Previous Day Highlights

The FBM KLCI closed in positive territory, supported by gains in selected heavyweight stocks, particularly in the telco sector. The benchmark index gained 0.14% or 1.95 points to close at 1,404.93. Gainers were led by KLK, PETDAG and PMETAL. However, market breadth was negative with 449 decliners against 376 advancers while 445 counters remain unchanged. Total volume stood at 2.73bn shares valued at RM1.87bn.

Key regional markets trended mixed over the ongoing US debt ceiling deal plus concerns over China’s recovery capped enthusiasm. Nikkei 225 surged 1.03% to close at 31,233.54 whereas STI erased 0.38% at to end at 3,195.22. Meanwhile, HSI dived 1.04% to close at 18,551.11 while SHCOMP added 0.28% to end at 3,221.45.

Meanwhile, Wall Street was closed on Monday in observance of Memorial Day.

News For The Day

PetChem's 1Q net profit down 74%

A decline in average product prices, coupled with higher utility and fuel costs, dragged Petronas Chemicals Group's 1QFY23 net profit down 74.37% YoY to RM532m from RM2.08bn. This was despite a 13.91% YoY rise in quarterly revenue to RM7.56bn versus RM6.63bn, on the back of the olefins and derivatives segment's higher sales amid the ringgit's weakening versus the US dollar. – The Edge Markets

TNB's 1Q profit up 12% on higher tariff surcharge

Tenaga Nasional (TNB) 1QFY23 net profit grew 12.23% YoY to RM1bn from RM893.1m, as higher revenue and lower taxes. Quarterly revenue was up barely 3.89% YoY to RM12.63bn from RM12.15bn, on higher sales of electricity with demand growth of 0.8%. -The Edge Markets

AmBank posts 9% rise in 4Q net profit

AMMB Holdings saw its 4QFY3/23 net profit rise 9.23% YoY to RM427.91m from RM391.75 m, due to increase in the group’s fund based income from interest bearing assets and increase in the non-interest income. Quarterly revenue was up 3.29% YoY to RM1.16bn from RM1.12bn. The group also declared a final dividend of 12.3 sen per share for FY23. -The Edge Markets

Tiong Nam’s 4Q net profit surges over 11 times

Tiong Nam Logistics Holdings’ 4QFY3/23 net profit jumped by over 11 times YoY to RM27.1m from RM2.34m, due to a fair value gain on a warehouse investment property, firm demand for logistics and warehousing services and lower share of associate loss. Quarterly revenue rose 4.6% YoY to RM184.94m from RM176.81m. -The Edge Markets

BAT Malaysia's 1Q net profit falls 23% on weaker demand

British American Tobacco (M) posted a 1QFY23 net profit of RM40.32m, a decline of 22.95% YoY from RM52.29m, as a result of lower volume driven by an increase in vapour usage, the tobacco black market and the start of the Muslim fasting month. BAT Malaysia declared a first interim dividend of 13 sen per share, payable on June 26.- The Edge Markets

AirAsia X posts 1Q net profit of RM328m as travel rebounds

AAX posted 1QFY23 net profit of RM328m. Revenue jumped almost five fold YoY to RM548.8m from RM113m mainly generated from charter flights and cargo, as most of the fleet remained grounded then. The upsurge in international travel have catapulted revenue, achieving 47% recovery against the pre-COVID-19 period. -The Star

Our Thoughts

Wall Street is closed for Memorial Day on Monday. With the US debt ceiling still pending, the DJI Average Futures is trading on a positive note at time of writing amid optimism that a deal would be struck soon. Over in Hong Kong, sentiment was further dampened by the fall in China’s industrial profits as the HSI lost 196 points to hover just above the 18,500 level or around a 6-month low. Back home, the FBM KLCI closed marginally higher attributed to late buying on Plantation, Energy and Utilities counters following a choppy session. In view of the mixed trading pattern amongst the regional markets, we reckon today will see another lackluster performance from the local bourse. Hence, we expect the index to again trend within the 1,400-1,410 range. Latest spate of earnings from the Banks were decent but is still largely being ignored by the investing public. We would advocate accumulation on the Banks as earnings should be solid for this year.

Source: Rakuten Research - 30 May 2023

To sign up for an account: http://bit.ly/40BNqKI

[Youtube Tutorial] Account Opening & Enable Foreign Equity: http://bit.ly/3I5Jzxo