Rakuten Trade Research Reports

Daily Market Report - 14 Aug 2023

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Publish date: Mon, 14 Aug 2023, 08:39 AM
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Previous Day Highlights

FBM KLCI closed marginally lower due to cautious trading ahead of the state elections. The benchmark index lost 0.12% or 1.77 points to close at 1,457.16. Losers were led by NESTLE, PPB and PETGAS. However, market breadth was positive with 502 gainers against 382 losers. Total volume stood at 2.94bn shares valued at RM1.86bn.

Key regional indices ended mostly lower. HSI, SHCOMP and STI lost 0.90%, 2.01% and 0.86% to close at 19,075.19, 3,189.25 and 3,294.285 respectively. Meanwhile Japanese stock market was closed for public holiday.

Wall Street ended mixed as worries were triggered by economic indicators suggesting that the US Fed's task of curbing inflation remains unfinished. The DJIA gained 0.30% to close at 35,281.40. Meanwhile S&P 500 and Nasdaq lost 0.11% and 0.68% to end at 4,464.05 and 13,644.85 respectively.

News For The Day

Malaysia secures RM5.2bn investment commitments

Malaysia has secured RM5.2bn worth of investment commitments in the digital economy sector from China and Singapore, Communications and Digital Minister Fahmi Fadzil said. he said that the RM3bn worth of investment was obtained from China and RM2.2bn from Singapore. Fahmi said the investments in the digital economy sector brought in by the ministry in the 1H23 was RM28.4bn, compared with RM7.5bn YoY.-The Edge Markets

WTK to buy stake in Sarawak oil palm firm for RM132.2m

WTK Holdings has proposed to buy a stake in an oil palm plantation company in Sarawak for RM132.2m to expand its oil palm presence in the state. "This will expedite WTK's strategic shift to become a more dominant plantation player with an enhanced publicly-listed profile whilst reducing its reliance on the timber business," it said.- The Edge Markets

PPB to sell Indonesian flour milling unit for RM87.5m

PPB Group is disposing of its 51%-owned indirect subsidiary in Indonesia’s PT Pundi Kencana for 290.7bn rupiah (RM87.5m) cash in a related-party transaction. The decision was made after considering that the flour milling business in Indonesia is highly competitive, according to PPB’s filing with Bursa Malaysia on Friday (Aug 11).- The Edge Markets

Mi Technovation 2Q net profit jumps 22% to RM22.7m

Mi Technovation posted a higher net profit of RM22.7m in 2QFY23 compared with RM18.7m YoY. Mi has declared a first single-tier interim dividend of 2.0 sen per share, with the book closure and payment dates on Aug 25 and Sept 11 respectively.– The Star

Prolexus proposes 5-for-1 rights issue to raise up to RM103m

Prolexus has proposed a five-for-one renounceable rights issue to raise between RM16.2m and RM102.6m. The company said the rights issue entailed the issuance of up to RM102.6m of nominal value of 2.05bn five-year, 0.1% irredeemable convertible unsecured loan stocks (ICULS) at 100% of its nominal value of RM0.05 each. The proceeds raised from the proposed rights issue are intended for the installation of roof-top solar photovoltaic systems on Prolexus’ factories at Batu Pahat and Kluang, Johor, repayment of bank borrowings, as well as merger and acquisition (M&A) and/or investment opportunities that have growth potential and create value-added synergies to the group’s existing businesses. - The Star

Our Thoughts

Wall Street ended the week on a mixed note attributed to contradicting data from the CPI and PPI. While the consumer price index came in within expectations, the producer price index for July was higher than estimates. As such, the DJI Average gained 105 points while the Nasdaq lost 93 points as the US 10-year yield rose to 4.158%. Over in Hong Kong, the HSI declined by 173 points dragged mainly by property stocks as concerns over the sector downturn deepens amid the slow recovery in China. On the home front, the FBM KLCI closed almost flat from late buying activities after a slow start last Friday attributed to the looming state election the next day. We believe results from the recently concluded state election bodes well for the equity market as more inflow of foreign funds is anticipated going forward. We are indeed optimistic about the results despite initial rumours that Selangor may be a tough contest. For today, we expect the index to hover within the 1,460-1,475 range with interest to center on the Construction and Banking related stocks.

Source: Rakuten Research - 14 Aug 2023

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