Previous Day Highlights

The FBM KLCI improves for the third consecutive days, leading by industrial products and services counters. The benchmark index gained 0.47% or 6.60 points to close at 1,398.06. Gainers were led by PCHEM, PPB and PMETAL. Market breadth was positive with 490 advancers against 347 decliners while 429 were unchanged. Total volume stood at 2.82bn shares valued at RM1.73bn.

Major regional markets trended mixed as market undertone remains uncertain ahead of US inflation data. Nikkei 225 dropped 0.81% to close at 31,943.93 whereas STI added 0.36% to end at 3,175.36. Meanwhile, HSI soared 1.08% to end at 18,860.95 while SHCOMP eased 0.78% to close at 3,196.13.

Wall Street closed on a strong note buoyed by lower- than-expected CPI data. The DJI added 0.25% to close at 34,347.43 while S&P500 and Nasdaq gained 0.74% and 1.15% to end at 4,472.16 and 13,918.96.

News For The Day

Hap Seng to dispose of entire stake in Richmore for RM51m

Hap Seng Consolidated has proposed to dispose of its entire equity interest in Richmore Development SB to Gek Poh (Holdings) SB for RM51m. Hap Seng Hospitality SB and Hap Seng Land Development SB, both indirect wholly-owned subsidiaries of HSCB had entered into a shares sale agreement with Gek Poh for the proposed disposal of 50.5m ordinary shares, representing 100% stake in Richmore.-The Edge Markets

Microlink bags RM29m contract

Microlink Solutions accepted a letter of award (LOA) worth RM28.97m from the National Audit Department to design, develop and deliver a data warehouse, audit analytics application, audit dashboard as well as hardware and other supporting infrastructure. The project is expected to commence beginning August 2023 and concluding in July 2026. -The Edge Markets

Zhulian's 2Q net profit drops 4%, declares 3sen dividend

Zhulian Corp post its 2QFY11/23 4.32% YoY drop to RM9.45m versus RM9.88m, mainly due to the absence of a net gain on disposal. Results from operating activities fell 24.62% YoY to RM6.82m from RM9.04m. Quarterly revenue also slid 8.17% YoY to RM33.43m from RM36.4m, due to weak consumer spending associated with prevailing economic conditions and rising inflationary pressures. -The Star

Pharmaniaga gets seven-year contract

Pharmaniaga has bagged a seven-year contract to provide medical supply logistics services to the Ministry of Health. Pharmaniaga said MOH issued the group's wholly-owned Pharmaniaga Logistics SB a letter dated July 12 for the contract, which took effect from July 1, 2023 and will last till June 30, 2030. -The Edge Markets

T7 Global facility commences production at Bayan field

T7 Global's wholly-owned subsidiary Tanjung Offshore Services SB has announced the commencement of gas production by the TSeven Elise mobile offshore production unit (Mopu) at the Bayan field. The integrated solutions provider said the event marks the official start of revenue contribution by TSeven Elise Mopu, which will provide a fixed and recurring income base for T7 Global Group over the next 10 years.-The Star

Our Thoughts

Wall Street closed higher on the back of a lower than expected CPI figure for June which may prompt the Federal Reserve to be less aggressive with their rate adjustments going forward. The DJI Average gained 86 points while the Nasdaq added 158 points as the US 10- year yield eased to 3.861%. Hong Kong equities also maintained its uptrend as the HSI jumped 201 points on speculation that Beijing will pump more stimulus plus calls for wider economic reopening to further boost the faltering economy. Meanwhile, the Tech sector was buoyed by buy calls on selected Chinese EV related stocks by Goldman Sachs. Back home, the FBM KLCI surprisingly displayed another solid performance mainly boosted by buying support from local institutions coupled with some accumulation from the foreign funds. Though the index is now faced with a formidable resistance at 1,400, we reckon recent buying activities should push through this level thus expect it to trend within the 1,400-1,410 range today. Meanwhile, growing demand amid tightening supplies pushed the Brent crude above USD80/barrel should maintain buying interests on Oil & Gas stocks today.

Source: Rakuten Research - 13 Jul 2023

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