Previous Day Highlights

The FBM KLCI closed on a weak note attributed to profit-taking activities that emerged despite the positive regional performance. The benchmark index lost 0.27% or 3.69 points to close at 1,381.73. Losers were led by HLBANK, PCHEM and TENAGA. Market breadth was negative with 547 losers against 361 gainers. Total volume stood at 3.48bn shares valued at RM1.80bn.

Key regional markets were mostly in positive territory following interest rate cut by China. Nikkei 225 eased 0.05% to close at 33,485.49 whereas STI advanced 0.77% to end at 3,242.85. Meanwhile, HSI and SHCOMP climbed 2.17% and 0.74%, respectively, to end at 19,828.92 and 3,252.98.

Wall Street continue with its upward trajectory in the absence of June rate hike. The DJIA soared 1.26% to end at 34,408.06. Nonetheless, S&P 500 and Nasdaq jumped 1.22% and 1.15% to close at 4,425.84 and 13,782.82 respectively.

News For The Day

F&N to invest RM1bn in milk business, aims to be net exporter

Fraser & Neave Holdings (F&N) is venturing into the upstream fresh milk business, following the ground-breaking ceremony of the group’s integrated dairy farm in Gemas, Negeri Sembilan, with an investment of at least RM1bn for the development of Phase 1 of the farm. The farm is expected to put the group on track to becoming one of Malaysia's largest milk producers, when Phase 1 reaches full production of 100m litres of fresh milk.-The Edge Markets

VS Industry’s 3Q net profit falls 48% on higher costs

VS Industry's 3QFY7/23 net profit fell 47.8% YoY to RM26.8m from RM51.3m due to higher electricity, labour and financing costs, as well as net foreign exchange loss. Quarterly revenue rose 7.5% YoY to RM996.8m, compared to RM927.6m driven by higher sales orders from key customers. VS Industry has declared a third interim dividend of 0.4 sen per share, which will be paid on July 28.-The Edge Markets

Betamek partners with China-based company to venture

into Asean auto industry Betamek is partnering with a China-based company to explore growth opportunities in the Asean automotive industry. Betamek said it had signed a memorandum of understanding (MOU) with Shenzen Zhonghong Technology Co Ltd (SZH) to develop advanced driver assistance systems, and an automotive cockpit system. – The Edge Markets

Resintech unit inks MOU with Sarawak's SEDC Energy to

venture into renewable energy Resintech has inked a Memorandum of Understanding (MOU) with SEDC Energy SB to establish a joint venture company to expand its business in Sarawak and get itself into the renewable energy sector. The MOU was inked via its wholly- owned Resintech Plastics (Sarawak) SB. SEDC Energy is a unit of Sarawak's economic development arm, the Sarawak Economic Development Corp. It is responsible for kickstarting the “new renewable energy” ecosystem in Sarawak. - The Edge Markets

Capital A set to launch AirAsia Cambodia in 4Q

AirAsia Cambodia, a new low-cost airline in Cambodia, is expected to start operating in 4QFY23, said Capital A. “We are expanding across Asean based on a wide network and a strong brand, with the launch of AirAsia Cambodia expected to start operating in 4Q. We are looking for opportunities in the remaining Asean countries that deserve an airline,” said Capital A CEO Tony Fernandes. -The Edge Markets

Our Thoughts

Wall Street rallied as traders are betting that the Federal Reserves is close to stop raising interest rates despite chairman Powell indicated that there will be more going forward. Meanwhile contrary to the Fed, the ECB (European Central Bank) hiked rate by 25bps to 3.5% or a 22-year high. Notwithstanding this, the DJI Average gained 429 points while the Nasdaq jumped by 156 points as the US 10-year yield dipped marginally to 3.72%. The absence of rate hike in the US also saw Hong Kong stocks surged by 420 points further boosted by the cut in borrowing costs in an attempt to rejuvenate the ailing economy. As for the local bourse, the FBM KLCI ended in negative territory as profit taking activities emerged across the board. For today, we reckon the index to possibly strengthen and expect the index to hover within the 1,380-1,390 range. Buying interests may return to the Tech sector today following a sell-down yesterday. Crude oil prices were also firmer following a no rate hike as the Brent crude closed almost to USD76/barrel.

Source: Rakuten Research - 16 Jun 2023

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