Previous Day Highlights

The FBM KLCI continues to trend lower, reaching a YTD low, as market sentiment remains jittery due to a lack of fresh catalysts. The benchmark index lost 0.30% or 4.11 points to close at 1,383.01. Losers were led by PPB, PETGAS and MISC. Market breadth was negative with 474 losers against 319 gainers while 432 were unchanged. Total volume stood at 2.94bn shares valued at RM1.83bn.

Key regional indices closed mostly higher amid optimism surrounding the US debt ceiling development except HSI that erased 0.10% to close at 18,216.91. Nikkei 225 and STI advanced 0.84% and 0.24% to end at 31,148.01 and 3,166.30. Meanwhile, SHCOMP closed almost unchanged at 3,204.63.

Wall Street ended higher as debt-ceiling worries faded. The DJIA gained 0.47% to end at 33,061.57 whereas Nasdaq and S&P500 soared 1.28% and 0.99% to close at 13,100.98 and 4,221.02.

News For The Day

Westports in, Inari out of KLCI under semi-annual review

Westports Holdings will be included in the Bursa Malaysia KLCI, to replace Inari Amerton, under the semi-annual review of the FTSE Bursa Malaysia Index Series, said FTSE Russel and Bursa Malaysia. The changes will be applied after market close on June 16, 2023 and will be effective on June 19, 2023. The two companies had swapped positions back in end-2021, following the boom in the semiconductor sector during the pandemic which lifted earnings for Inari and pushed its share price to above RM4 in November that year.-The Edge Markets

Panasonic says shutting down only two manufacturing units

Panasonic Manufacturing Malaysia has clarified a news report that it will shut down several of its operations in Malaysia this year, which will leave hundreds of its workers jobless. The electrical home appliances manufacturer said it has shut down two product manufacturing departments at the Shah Alam 1 (SA1) plant, while it has no plans to cease operations in Malaysia. “We completed a rationalisation exercise and business restructuring on March 31.” it said.– The Edge Markets

Velesto Energy secures RM50m well-drilling contract

Velesto Energy said its sub-subsidiary Velesto Drilling SB has secured a contract from Vestigo Petroleum SB for the provision of a jack-up drilling rig. The group said the contract has an estimated value of US$10.9m (RM50.32m) and is expected to commence in Q4FY23. The group said it has assigned its Naga 2 jack-up rig for the job, which entails the drilling of five firm wells. -The Star

Citaglobal wins RM13m contract to dismantle rest of PDPP

Citaglobal has secured a RM13.3m contract to dismantle the balance of the power plant owned by Malakoff Corp's unit Port Dickson Power. The job involves the decommissioning, dismantling, demolition and disposal of the balance of the 440MW Port Dickson Power Plant (PDPP). “The contract will further increase and enhance the existing order book of Citaglobal and its subsidiaries to approximately RM1bn,”. -The Edge Markets

Kimlun lands RM238m apartment job in Selangor

Kimlun Corp has bagged a contract worth RM237.63m from Melati Ehsan Holdings to undertake main building works for two blocks of serviced apartments in Selangor. Kimlun said its wholly-owned subsidiary Kimlun SB accepted the award from Melati Ehsan's unit Bayu Melati SB. The construction work is expected to be completed by the end of January 2027.-The Edge Markets

Our Thoughts

Wall Street gets a reprieve to close firmer after the US House passed a debt ceiling bill which is crucial to avoid a default. The DJI Average gained 153 points while the Nasdaq added 166 points as the US 10-year yield eased further to 3.601%. Meanwhile in Hong Kong, the HSI ended 17 points lower as sentiment remained affected by worries over China’s recovery and waning expectations of the stimulus packages to revive economic activities. Back home, the FBM KLCI continues to trend lower as selling gained momentum pushing the index to a YTD low. Despite expectations of bargain hunting activities, weak market undertone further deters any meaningful accumulation as investors preferred to remain side-lined. Nonetheless, we reckon some buying may emerge following the positive development on the debt ceiling hence anticipate the index to hover within the 1,385-1,395 range today. Again, we advocate Banks as ripe for pickings as most are trending at a 6-month low currently despite the decent performance for the 1Q2023.

Source: Rakuten Research - 2 Jun 2023

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