Previous Day Highlights

The FBM KLCI continue its upward trajectory lifted by broad-based accumulation amid the improved market sentiment. The benchmark index gained 0.78% or 10.69 points to close at 1,386.77. Gainers were led by PETDAG, PPB and KLK. Market breadth was positive with 481 gainers against 371 losers while 434 remained unchanged. Total volume stood at 3.01bn shares valued at RM1.72bn.

Major regional markets were mostly in positive territory, leveraging the upbeat momentum from Wall Street overnight except SHCOMP ended 0.08% lower at 3,228.83. Nikkei 225 and STI gained 0.52% and 0.29% to close at 32,434.00 and 3,196.07 respectively, while HSI advanced a mere 0.07% to end at 19,404.31.

Wall Street closed sharply higher as traders await for central bank’s decisions. The DJIA jumped 0.56% to end at 34,066.33 while S&P500 and Nasdaq surged 0.93% and 1.53% to close at 4,338.93 and 13,461.92.

News For The Day

Axiata to write off RM377m and 'assess further impairment'

as Ncell tax dispute dismissed Axiata Group said it will book a RM376.6m write-off of related receivable assets, after an arbitration tribunal dismissed its claims over taxes imposed by the Nepalese government on Axiata's Nepal-based telecommunications operator Ncell Pte Ltd. The Bilateral Investment Treaty arbitration tribunal had dismissed claims by Axiata Investments (UK) Ltd and Ncell, the arbitration is in relation to capital gains tax paid by the group to the Nepalese government following Axiata UK’s acquisition of an indirect 80% shareholding in Ncell in 2016 for US$1.365bn (RM5.91bn) from Reynolds Holdings Ltd. - The Edge Markets

Kerjaya Prospek gets RM404.4m development project

Kerjaya Prospek Group has accepted a letter of award worth RM404.4m from Ecofirst Consolidated for construction works for a proposed residential development project at Lot 5 & PT62, Seksyen 92, Kuala Lumpur. The construction works for the project are expected to commence on Aug 1, 2023 for a duration of 36 months. With the acceptance of the letter of award, its YTD contract wins increased to RM937.8m, equivalent to 78.2% of contract wins. -The Star

Bermaz Auto’s 4Q net profit rises 28%

Bermaz Auto’s 4QFY4/23 net profit grew 27.84% YoY to RM100.62m from RM78.7m, on the back of higher revenue. Quarterly revenue rose 19.51% YoY to RM1.07bn from RM897.36m, mainly due to the final rush to register the balance unfulfilled back orders in February and March, 2023 for the sales tax exemption incentives. Bermaz Auto declared a fourth interim dividend of 3.5 sen and a special dividend of 7.5 sen per share, payable on Aug 4, totalling dividends declared for FY23 to 22 sen per share. -The Edge Markets

Mestron seeks transfer to Main Market

Mestron Holdings is seeking a transfer from the ACE Market to the Main Market of Bursa Malaysia. The manufacturer of specialty poles said it had met the requirements for the proposed transfer. The group’s aggregate adjusted PAT for the past five financial years ended Dec 31, 2018 to 2022 was RM27.2m.– The Edge Markets

Kim Teck Cheong to transfer to Main Market on June 15

Consumer packaged goods distributor Kim Teck Cheong Consolidated is set to be transferred from the ACE Market to the Main Market of Bursa Malaysia on June 15, 2023. KTC’s revenue and net profit grew to RM705.8m and RM22.1m in FY22.-The Edge Markets The bulls continue to charge on Wall Street as traders are betting that the Fed will pause its rate hike during the FOMC meeting tomorrow. Meanwhile, most also expect that the US inflation data will be tame for the month of May giving the likelihood that the Fed will skip its rate hike. Therefore, the DJI Average jumped by almost 190 points while the Nasdaq gained 203 points as the US 10-year yield was flat at 3.743%. Over in Hong Kong, the HSI ended marginally higher on the expected rate pause in the US and that the upcoming economic data from China will show a slowdown thus the anticipated stimulus from Beijing. Back home, the FBM KLCI finally broke out from its slump due to bargain hunting activities across the board. Nonetheless, the benchmark index remains at a 2-week low as we see 1,390 as a strong resistance level. For today, we reckon the index to hover within the 1,380-1,390 range and if there is a decisive breakout from 1,390, we may see 1,400 as the next target. Meanwhile, we believe the Energy sector to see some headwinds as crude oil prices continued to decline with the Brent crude dipped to below the USD72/barrel ahead of the FOMC meeting.

Our Thoughts

The bulls continue to charge on Wall Street as traders are betting that the Fed will pause its rate hike during the FOMC meeting tomorrow. Meanwhile, most also expect that the US inflation data will be tame for the month of May giving the likelihood that the Fed will skip its rate hike. Therefore, the DJI Average jumped by almost 190 points while the Nasdaq gained 203 points as the US 10-year yield was flat at 3.743%. Over in Hong Kong, the HSI ended marginally higher on the expected rate pause in the US and that the upcoming economic data from China will show a slowdown thus the anticipated stimulus from Beijing. Back home, the FBM KLCI finally broke out from its slump due to bargain hunting activities across the board. Nonetheless, the benchmark index remains at a 2-week low as we see 1,390 as a strong resistance level. For today, we reckon the index to hover within the 1,380-1,390 range and if there is a decisive breakout from 1,390, we may see 1,400 as the next target. Meanwhile, we believe the Energy sector to see some headwinds as crude oil prices continued to decline with the Brent crude dipped to below the USD72/barrel ahead of the FOMC meeting.

Source: Rakuten Research - 13 Jun 2023

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