Previous Day Highlights

The FBM KLCI ended marginally lower attributed to profit taking activities following the recent uptrend. The benchmark index eased 0.06% or 0.92 points to close at 1,450.35. Losers were led by KLK, PPB and HLBANK. Market breadth was mixed with 474 losers against 415 gainers while 426 counters were unchanged. Total volume stood at 3.03bn shares valued at RM1.93bn.

Key regional markets closed mostly on a strong note following Beijing’s policy to assist the property and technology sectors. HSI and SHCOMP rallied 1.41% and 1.84% to end at 19,916.56 and 3,275.93 respectively. Meanwhile, STI surged 1.01% to close at 3,371.17 whereas Nikkei 225 lost 0.40% to end at 32,759.23.

Wall Street finished higher on the hope of a US soft landing after a slew of big tech earnings and better than expected inflation data. The DJIA added 0.50% to close at 35,459.29 whereas S&P 500 and Nasdaq rose 0.99% and 1.90% to end at 4,582.23 and 14,316.66.

News For The Day

Astro Malaysia to undertake VSS

Astro Malaysia Holdings will be undertaking a voluntary separation scheme (VSS), which it said will allow it to focus on its core business activities and improve its financial performance by simplifying the organisation, streamlining operations and reducing operating expenses. The media and entertainment company said the industry is currently operating in an environment that is experiencing an unprecedented rate of disruption, which requires industry players to reinvent and adapt swiftly to remain profitable and relevant. -The Star

DXN reports marginal rise in 1Q profit

DXN Holdings reported a marginal 0.57% YoY increase in its 1QFY2/24 net profit to RM77.60m from RM77.17m on the back of higher revenue. Revenue rose 17.65% YoY to RM423.98m from RM360.39m, mainly supported by the sales growth of fortified food and beverages in Latin America and India, as well as depreciation of the ringgit against certain foreign currencies. DXN declared its first interim dividend of 0.80 sen per share, to be paid on Aug 30.-The Edge Markets

Chin Teck's 3Q earnings weighed down by low oil palm price

Chin Teck Plantations’ 3QFY8/23 net profit fell 62.2% YoY to RM11.44m from RM30.30m, on amid significant decreases in the prices of FFB, crude palm oil and palm kernel and lower foreign exchange gains. Quarterly revenue declined 43.5% YoY to RM47.03m from RM83.32m. -The Edge Markets

Gadang's net loss widens in 4Q amid impairment loss

Gadang Holdings saw its net loss widen by more than six times to RM27.71m in 4QFY5/23, from RM4.02m YoY. The the ballooned net loss was due to one-off impairment loss on goodwill in Singapore and Indonesia subsidiaries, lower contribution from construction activities impacted by the lingering challenges caused by the Covid-19 pandemic, as well as accounting provisions on potential liabilities arising from liquidated ascertained damages (LAD) and impairments. Revenue fell 17.5% YoY to RM113.95m, down from RM138.18m.- The Edge Markets

Bina Puri JV gets RM72.85m sub-contract

Bina Puri Holdings’ joint venture company has secured a sub- contract worth RM72.85m under a Public Works Department project in Mukah. Its unit Bina Puri Builder SB had jointly registered a venture named Chun Yang Bina Puri (JV) SB with Chun Yang Construction SB. The sub-contract period is 24 months starting from July 17, 2023. – The Edge Markets

Our Thoughts

Wall Street closed broadly higher as sentiment remained upbeat as the personal consumption expenditure index came in within expectations illustrating that inflation is easing. The DJI Average gained 176 points while the Nasdaq jumped by 266 points as the US 10-year yield eased below the 4% mark to 3.957%. Over in Hong Kong, the HSI surged 277 points to almost the 20,000 level on the back of broad-based buying from mainland funds boosted by China’s pledge to support the tech sector and revive the broader economy. Back home, the FBM KLCI ended marginally lower amid ongoing intermittent correction which is deemed healthy for the market. Following a continuous sequence of net foreign outflows from Jan-June this year, July will be the first month in 2023 to see a net inflow thus showing that foreign diversification has begun. As such, we reckon the index is in good stead as we expect continuous accumulation of blue chips and the index to hover within the 1,445-1,455 range today. Meanwhile, the Brent crude ended near US$85/barrel or almost a 4-month high as the supply side may affected by the lower US drilling activities.

Source: Rakuten Research - 31 Jul 2023

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