Previous Day Highlights

The FBM KLCI retreated from its earlier gains and ended at its intra low as profit taking activities took place. The benchmark index lost 0.56% or 8.19 points to close at 1,451.24 with losers led by NESTLE, PETDAG and PCHEM. Market breadth was negative with 601 losers against 343 gainers. Total volume stood at 3.83bn shares valued at RM1.76bn.

Key regional markets closed on a mixed note as investors were reluctant to make significant moves and wait for more stimulus from China. Nikkei 225 climbed 0.92% to close at 33,476.58 whereas STI closed almost unchanged at 3,373.79. Meanwhile, HSI declined 0.34% to end at 20,011.12 while SHCOMP closed flat at 3,290.95. Wall Street trended mixed despite US job openings fell in June to the lowest level since April-21. The DJIA added 0.20% to close at 35,630.68 whereas S&P 500 and Nasdaq eased 0.27% and 0.43% to end at 4,576.73 and 14,283.91 respectively.

News For The Day

Frontken’s 2Q net profit slips marginally

Frontken Corp saw its 2QFY12/23 net profit slip marginally by 0.89% YoY to RM31.91m from RM32.2m, on lower revenue from its Taiwan and Singapore units which was caused partly by weaker demand from its semiconductor customers flowing on from 1Q. Frontken’s revenue dropped 5.5% YoY to RM121.15m from RM128.2m.-The Edge Markets

Dufu Technology warns of lower FY23 earnings

Dufu Technology Corp’s 2QFY12/23 net profit fall 88.7% YoY to RM3.32m compared with RM29.26m, on lower revenue given the decrease in revenue in hard disk drive (HDD) components as well as higher operating costs incurred. Quarterly revenue fell 48.1% YoY to RM47.65m. Dufu declared an interim dividend of 1.5 sen per share, payable on Sept 22. Dufu expects its financial performance for the full year to be "considerably lower" compared with FY22, given reduced demand from customers, challenging operating conditions and uncertain market circumstances.– The Edge Markets

LFE Corp gets 3 letters of award totalling RM97.8m

LFE Corp has secured three letters of awards totalling RM97.8m from Circuitry Electrical Engineering SB for the construction of a factory in Seberang Perai, Penang. LFE Corp said the duration of the contracts will be for approximately 24 months, with the date of commencement and completion to be advised later. -The Star

EP Manufacturing to produce Chinese vehicles in Malaysia

EP Manufacturing has partnered with China-based automobile group BAIC Motor Corp Ltd to develop local production of BAIC-branded vehicles in Malaysia. EPMB signed a memorandum of understanding (MOU) with BAIC’s unit, BAIC International Development Co Ltd, to develop the BJ40P and X55II sport utility vehicles and right hand drive (RHD) electric vehicles to cater to Malaysia and other Southeast Asian RHD markets. BAIC is part of Beijing Automotive Group Co Ltd, a Fortune Global 500 company and one of China’s largest carmakers.-The Edge Markets

Willowglen bags RM12.58m contract

Willowglen MSC’s wholly owned subsidiary, Willowglen Services Pte Ltd has secured a RM12.58m contract by SP PowerAssets Limited, Singapore for the maintenance of 6.6kV Willowglen remote terminal units. Willowglen said the commencement date of the contract is on Sept 1, 2023 and will be completed by March 31, 2029.-The Star

Our Thoughts

Wall Street closed mixed as profit taking emerged amid an overbought market as sentiment was affected by a mix bag of corporate earnings. As such, the DJI Average added 71 points while the Nasdaq lost 62 points as the US 10-year yield jumped past the 4% mark to 4.037%. In Hong Kong, equities also ended lower as the HSI pared earlier gains to end 67 points lower on concerns that the market may be overheating following the recent rally particularly on Tech related stocks. Even a better than expected earnings from HSBC failed to spur the broader market. Back home the FBM KLCI also retreated as profit taking activities emerged. The benchmark index closed lower after a strong start, however we reckon market undertone remains positive due to strong foreign buying recently. Thus, we expect the local bourse to stage a slight rebound with the index to hover within the 1,445- 1,455 range today. Buying interests should remain on the Oil & Gas counters with the Brent continuing its uptrend to almost US$88/barrel buoyed by improving economic outlook globally.

Source: Rakuten Research - 2 Aug 2023

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