Previous Day Highlights

The FBM KLCI ended in negative territory, in line with the global sell-off, as concerns over the economic outlook continue to persist. The benchmark index lost 0.27% or 3.78 points to close at 1,390.89. Losers were led by PETDAG, HLBANK, and PETGAS. Market breadth was negative with 518 losers against 353 gainers. Total volume stood at 4.90bn shares valued at RM1.63bn.

Key regional indices closed broadly lower as market sentiment turned cautious clouded by global inflation woes. Nikkei 225 and STI slumped 1.45% and 0.96% to close at 32,781.54 and 3,191.60 respectively. Meanwhile, HSI dived 1.71% to end at 18,889.97 while SHCOMP was closed for Dragon Boat holiday.

Wall Street retreated amid recessionary fears following the Bank of England’s unexpected 50pbs rate hike. The DJIA and S&P500 fell 0.65% and 0.77% to end at 33,727.43 and 4,348.33. Nasdaq slumped 1.01% to close at 13,492.52.

News For The Day

Yinson 1Q net profit jumps 73% as top line triples

Yinson Holdings’ 1QFY1/24 net profit rose 73.33% YoY to RM208m from RM120m, on the back of higher contribution from engineering, procurement, construction, installation and commissioning (EPCIC) business activities. The floating production storage offloading (FPSO) vessels operator said its bottom line was also helped by the absence of one-off impairment losses of RM125m, but was offset by forex losses of RM69m, as well as higher financing cost of RM29m and tax expenses of RM61m. The revenue jump was thanks to its EPCIC segment’s contribution, which surged to RM2.62bn from RM589m previously, due to higher progress of FPSO vessel construction. -The Edge Markets

Sports Toto buys shares in 7-Eleven and BFood

Sports Toto via its wholly-owned subsidiary Magna Mahsuri SB has bought shares in sister companies 7-Eleven Malaysia Holdings (SEM) and Berjaya Food for RM38.78m cash. SPToto said it bought 17.53m shares or a 1.58% stake in SEM for about RM34.53m and 7.46m shares or a 0.43% stake in BFood for about RM4.25m.-The Edge Markets

Apollo plans 15 sen dividend as 4Q net profit jumps 78%

Boosted by higher sales, Apollo Food Holdings' 4QFY4/23 net profit jumped 77.74% YoY to RM6.8m from RM3.83m. Quarterly revenue rose 5% YoY to RM60.27m from RM57.34 m. The confectionery maker proposed a final dividend of 15 sen per share, raising its FY23 payout to 25 sen, the same as in FY22. -The Edge Markets

Kumpulan Kitacon wins RM50.3m construction contract

Kumpulan Kitacon’s wholly owned subsidiary, Kitacon SB has secured a RM50.3m contract from Paragon Pinnacle SB. The contract was for the proposed construction and completion of 80 units of single-storey terrace houses, one unit of electrician substation, and emblem fencing under package one. The second package involves the construction and completion of 104 units of single-storey terrace houses and one unit of electrical substation. -The Star

Astino 8% increase in 3Q earnings on better overseas flat

steel product sales Flat steel product manufacturer Astino saw an 8.1% YoY increase in its 3QFY7/23 net profit to RM12.71m versus RM11.76m, thanks to an increase in overseas sales with higher profit margins. Quarterly revenue, however, dropped by 0.4% YoY to RM155.87m from RM156.49m, mainly due to weakening steel prices.– The Edge Markets

Our Thoughts
 

The rally on Wall Street ran out of steam as all 3 major indices closed in negative territory as traders are now concerned about recession especially after the Bank of England surprised everyone with a 50bps rate hike. As a result, the DJI Average lost 219 points while the Nasdaq declined by 138 points as the US 10-year yield edged lower at 3.737%. In Hong Kong, the HSI slump continues as it ended below the 19,000 mark following the rate hike in the UK thus reviving inflationary fears. On the home front, the FBM KLCI also closed in the red amid a broadly weaker regional performance last Friday. Financials bore the brunt of the selling after a decent showing last week. For today, we reckon sentiment to remain fragile as the DJI Average futures remains in the red at time of writing thus expect the index to hover within the 1,380- 1,390 range. Amid recent rate increases in Europe, we believe Tech stocks may experience some selling today. Meanwhile, in view of the recessionary fears the Brent crude closed below USD74/barrel.

Source: Rakuten Research - 26 Jun 2023

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