Previous Day Highlights

The FBM KLCI ended in negative territory, dragged by late selling of selected heavyweights particularly in healthcare and consumer products and services counters. The benchmark index eased 0.13% or 1.83 points to close at 1,396.23. Losers were led by PETDAG, IHH and MISC. However, market breadth was positive with 517 gainers against 377 losers. Total volume stood at 2.93bn shares valued at RM1.78bn.

Key regional indices closed on a positive note driven by the strong performance of global equities overnight. Nikkei 225 and STI soared 1.49% and 1.99%, to close at 32,419.33 and 3,238.46. Meanwhile, HSI and SHCOMP skyrocketed 2.60% and 1.26% respectively, to close at 19,350.62 and 3,236.48.

Wall Street continued to trend higher on the sign of slowdown in inflation. The DJI added 0.14% to close at 34,395.14 while S&P500 and Nasdaq rose 0.85% and 1.85% to end at 4,510.04 and 14,138.57 respectively.

News For The Day

Dayang Enterprise secures extension from Roc Oil Sarawak

Dayang Enterprise Holdings’ contract to provide upstream oil and gas support services to Roc Oil (Sarawak) SB has been extended by almost 1½ years, effective from July 17, 2023 till Dec 31, 2024. Dayang Enterprise noted that the value of the contract is based on work orders issued by Roc Oil (Sarawak) throughout the contract duration.-The Edge Markets

LTAT almost lost control of Pharmaniaga

The Armed Forces Fund Board (LTAT) almost lost control of Pharmaniaga, its pharmaceutical unit, after some well- connected persons attempted to acquire the company at a significantly discounted valuation through the "highest leadership”, revealed Defence Minister Datuk Seri Mohamad Hasan. He expressed his determination to not only manage and revive Pharmaniaga, but also bring the Boustead group of companies back to its former glory.-The Edge Markets

KAB partners China-based company to start biomass plant

Kinergy Advancement’s (KAB) unit has signed a heads of agreement with a China-based entity to start its first biomass plant, focusing on power and steam generation. This plant is expected to be set up on a plot of 300 acres (121 hectares) in Kulim, Kedah. The company, which was formerly known as Kejuruteraan Asastera, said the plant is expected to generate up to 30MW of electricity and 80 tonnes of steam per hour. - The Edge Markets

Stella unit bags RM91.36m contract for Penang project

Stella Holdings said its unit has won a RM91.36m sub-contract for a medium-cost apartment project undertaken by the Penang State Islamic Religious Council in the Seberang Perai Tengah district. Mewah Kota SB, its wholly owned subsidiary is appointed as a sub-contractor in relation to structure, architecture works and mechanical and electrical works for the project. The project will feature a 40-storey apartment building with 422 units. The contract is for a period of 25 months from the date of possession of site and the date of completion shall be on Aug 27, 2025.-The Star

MYMBN’S IPO oversubscribed by 30.77 times

Bird’s nest processor MYMBN , en route to a listing on the ACE Market of Bursa Malaysia on July 25, 2023, saw its initial public offering oversubscribed by 30.77 times. A total of 7,712 applications for 613.13m shares were received from the Malaysian public.-The Star

Our Thoughts

Wall Street maintained its uptrend following the release of the producer price index which came in lower than expected fueling optimism that the Fed may cool down rate hike later this month as we enter the 2Q2023 earnings season. As such, the DJI Average rose 48 points while the Nasdaq surged by 220 points as the US 10-year yield declined further to 3.767%. In Hong Kong, the HSI jumped by 490 points as sentiment improved following China’s pledge to enhance support for major tech companies following a meeting that include Alibaba, Meituan and ByteDance. Back home, the FBM KLCI failed in its bid to close above the 1,400 level amid some late profit taking. Nonetheless, we reckon buying activities to re-emerge today in view of the positive developments in China and the US which should improve market undertone. Therefore, we expect the index to hover within the 1,395-1,405 with buying interests to center on Tech related companies and also the Oil & Gas sector as the Brent crude is currently trending towards the USD82/barrel level due to improving demand.

Source: Rakuten Research - 14 Jul 2023

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