Previous Day Highlights

The FBM KLCI ended in negative territory as Malaysia’s producer price index slips in May. The benchmark index shed 0.23% or 3.14 points to close at 1,386.74. Losers were led by NESTLE, PPB and HLFG. Market breadth was negative with 425 losers against 361 gainers. Total volume stood at 2.59bn shares valued at RM1.51bn.

Key regional markets closed on a strong note following optimism on China’s 2Q growth prospect. However, Nikkei 225 declined 0.49% to close at 32,538.33 whereas STI advanced 0.49% to end at 3,205.35. Meanwhile, HSI and SHCOMP soared 1.88% and 1.23% to end at 19,148.13 and 3,189.44.

Wall Street advanced in a broad rally as robust new home sales eased recession fears. The DJIA climbed 0.63% to end at 33,926.74 whereas S&P500 and Nasdaq rose 1.15% and 1.65% respectively, to close at 4,378.41 and 13,555.67.

News For The Day

Cahya Mata Sarawak to build RM750m plant in Kuching

Cahya Mata Sarawak will be constructing a RM750m plant in Kuching, Sarawak, with an annual capacity of 1.9m tonnes. The company said its wholly-owned subsidiary, Cahya Mata Cement SB, has approved to proceed with the proposed construction of a new clinker line with a daily production of 6,000 tonnes per day (or 1.9m tonnes a year). Cahya Mata said the project is expected to take 36 months to complete and meet Sarawak’s growing domestic cement demand. -The Star

Power Root acquires land in Johor Baru for RM25m

Power Root is acquiring 116 undeveloped parcels of land in Johor Baru from GreatEarth Development (Molek) SB for RM25m. Power Root said the acquisition will provide a better generation of potential returns on the group’s asset class. It added that the acquisition will also provide an option to expand the group’s revenue base through the potential, eventual disposal or development of the land. -The Star

SNS Network's 1Q net profit jumps 27.4%

SNS saw its 1QFY1/24 net profit jump 27.4% YoY to RM7.89m compared with RM6.19m. Its revenue rose 16.8% YoY to RM289.84m against RM248.16m. SNS has announced a first interim single-tier dividend of 0.25 sen per ordinary share amounting to RM4.03m in respect of FY24 to be paid on Aug 28. This is the third dividend distribution from the group since its listing in September 2022.-The Star

Handal Energy proposes to diversify into telecom tower,

marine sand business Handal Energy has proposed to diversify its principal activities into two new business segments to further expand its revenue stream and earnings base. The proposed new segments are telecommunications network infrastructure solutions and marine sand businesses. The telecommunications business involves owning, operating and leasing out space for telecommunications towers, and setting up and integrating 5G private networks. The marine sand segment involves extracting, operating, and domestic and export sales of marine sand. - The Edge Markets

DC Healthcare to raise RM49.81m via IPO

ACE Market-bound DC Healthcare Holdings, a specialist in aesthetic medical services, has priced its initial public offering at 25 sen per share with the aim of raising RM49.81m working capital and repayment of borrowings. At 25 sen per share, DC Healthcare is valued at 26.04 times price earnings based on its profit after tax of RM9.56m for FY22.-The Edge Markets

Our Thoughts

Wall Street rebounded as sentiment improved following a solid set of economic data illustrating that the US economy remains strong with no recession in sight. As a result, the DJI Average gained 212 points while the Nasdaq jumped by 220 points despite the US 10-year yield inched higher at 3.772%. In Hong Kong, the HSI recovered to above the 19,000 level after a 5-day decline on earnings upgrade plus expectations of more stimulus package from Beijing. As for the local bourse, the FBM KLCI ended lower due to selling activities in the afternoon session especially on the Telcos. For today, we reckon the index to see a slight recovery with buying interests returning to the financials and Tech stocks following bouts of profit taking over the last 3 days. Therefore, we expect the index to hover within the 1,380-1,390 range today. Meanwhile, concerns over global demand saw crude oil prices dipped further with the Brent crude closing around the USD72/barrel.

Source: Rakuten Research - 28 Jun 2023

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