Previous Day Highlights

The FBM KLCI ended slightly lower despite Bank Negara Malaysia maintaining the overnight policy rate (OPR) at 3%. The benchmark index eased 0.28% or 3.95 points to close at 1,385.95. Losers were led by HLFG, KLK and PMETAL. Market breadth was negative with 514 losers against 339 gainers. Total volume stood at 2.45bn shares valued at RM1.65bn.

Key regional indices were all in negative territory taking the negative cue from Wall Street overnight. Nikkei 225 and STI both slumped 1.70% and 1.10% respectively, to close at 32,773.02 and 3,150.43. HSI tumbled 3.02% and ended at 18,533.05, marking a one-month low. SHCOMP declined 0.54% to close at 3,205.57.

Wall Street continues to trend lower, attributed to the resilient labour market which may reignite fears of more rate hike. The DJI tumbled 1.07% to close at 33,922.26 while S&P500 and Nasdaq lost 0.79% and 0.82% to end at 4,411.59 and 13,679.04.

News For The Day

BNM maintains OPR at 3%

Bank Negara Malaysia (BNM) has decided to maintain its overnight policy rate (OPR) at 3%. This came in line with the expectations of most economists, who opined that nine months of easing inflation, together with the central bank’s recent ringgit intervention, provided some reprieve for the central bank’s new governor Datuk Shaik Abdul Rasheed Abdul Ghaffour.-The Edge Markets

Sunway completes RM30m public upgrading works

Sunway Property, the property division of Sunway Group, has completed its RM30m public infrastructure upgrading works in Petaling Jaya, with the final milestone being today’s official opening of the 250-metre-long Sunway Serene bridge. The project consists of extensive upgrades to existing road networks as well as rehabilitation of the 15-acre Sunway Serene Lake in tandem with its planning for the 17-acre Sunway Serene development.-The Star

Aneka Jaringan bags RM22m contract

Aneka Jaringan Holdings’ unit bagged a RM22.16m contract from Coneff Corporation SB to build over 1,000 units of Rumah Wilayah Keluarga Malaysia in Sungei Besi, Kuala Lumpur. The project involves construction works including earthworks, piling, pile caps works, and retaining walls for two blocks of the affordable homes. The project will commence on July 15, with a completion date set for May 14, 2024. -The Edge Markets

MN Holdings secures RM11.2m contract

MN Holdings' unit has secured an underground utilities contract worth RM11.2m at the AirTrunk Data Centre in Johor. Its wholly-owned subsidiary Mutu Nusantara SB received the letter of award and acceptance from the main contractor, Rentak Segar SB. The contract will commence immediately and is targeted for completion in in November 2023.-The Star

Heitech Padu secures JPJ contract extensions worth RM54m

Heitech Padu has secured two contract extensions from the Road Transport Department (JPJ) amounting to an additional contract value of RM54.33m. The group shared that both contracts have been extended for 12 months, commencing May 1, 2023 until April 30, 2024. The first contract is for the maintenance and technical support services for the Mainframe system software, with an additional value of RM27.04m. The second contract is for the ICT infrastructure and mySIKAP system maintenance and technical support and is worth RM27.29m.-The Edge Markets

Our Thoughts

Wall Street slumped as traders were spooked by the higher than expected job data for June which will increase the possibility for the Feds to hike rates to cool inflationary pressure. As a result, the DJI Average lost 366 points while the Nasdaq declined by 113 points as the US 10-year yield edged past the 4% mark to 4.031%. Meanwhile, Hong Kong equities endured another dreadful day as the HSI tumbled by 577 points following the Feds minutes indicating more rate hikes coupled with signs of slowing China’s economy that saw the Yuan weakened against the USD at 7.25 or an 8-month low. Back home, the FBM KLCI closed weaker amid a poor regional performance despite Bank Negara’s stance to maintain the OPR which was widely anticipated. For today, we reckon trading on the local bourse will be muted following the weak closing on Wall Street thus expect the index to hover within the 1,380-1,390 range. We believe Tech stocks may experience some headwinds in view of the higher interest rates environment in the US going forward.

Source: Rakuten Research - 7 Jul 2023

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