Previous Day Highlights

The FBM KLCI ended marginally higher in tandem with the positive performance across the region. The benchmark index gained 0.07% or 0.96 points to end at 1,451.53. Gainers were led by HLFG, PCHEM and PMETAL. Market breadth was mixed with 432 gainers against 490 losers while 426 were unchanged. Total volume stood at 3.31bn shares valued at RM1.93bn.

Key regional indices ended higher due to strong buying interests on tech stocks. Nikkei225 and STI gained 0.92% and 0.20% to close at 31,856.71 and 3,158.21 respectively. HSI and SHCOMP added 0.95% and 0.88% to finish at 17,179.01, 3,120.33 and 3,162.15 respectively.

Wall Street ended mixed due to uncertainty of the market direction. The DJIA and S&P500 lost0.51% and 0.28% to finish at 34,288.83 and4,387.55 respectively. Meanwhile Nasdaq gained 0.06% to end at 13,505.87.

News For The Day

IOI Corp registers RM37.2m net profit in 4Q

IOI Corp’s 4QFY6/23 net profit dropped to RM37.2m from RM541.8m YoY. IOI Corp said crude palm oil (CPO) price has been volatile since May 2023, ranging from RM3,300 to RM4,100 per tonne. “We foresee CPO price to remain range bound between RM3,500 to RM4,000 per tonne until the end of the year, before moving higher as a result of lower palm fruits production due to the effects of El Nino phenomenon, which is expected to intensify in the coming months.” - The Star

CCK Consolidated's 2Q net profit up 44%

CCK Consolidated Holdings’ 2QFY23 net profit climbed 44.28% YoY to RM16.8m thanks to stronger consumer demand for its retail segment and contributions from its Indonesia-based prawn processing unit. Stronger consumer demand led to the retail segment’s revenue rising 11.4% YoY to RM191.6m. On its prospects, CCK Consolidated said that while consumer sentiment has normalised post-Covid-19, the volatility of the US dollar against the ringgit remains a concern as it leads to fluctuations in prices of corn and soy.– The Edge Markets

KAB commits to deliver sustainable green energy solutions

Kinergy Advancement Bhd (KAB) (Formerly known as Kejuruteraan Asastera Bhd) remains committed in providing businesses with sustainable, green and clean energy engineering solutions for businesses regionally. The company’s 2QFY23 net profit surged by 417.3% YoY to RM3.4m largely attributed to the better tariffs on the SES segment assets. - The Edge Markets

AEON 2Q slumps 36% on lower revenue

AEON Co’s 2QFY23 net profit declined 36.15% YoY to RM30.2m mainly due to lower revenue and higher operating costs. Moving forward, the group said that it will continue to leverage its ecosystem in partnering and collaborating with its tenant partners, suppliers and AEON group of companies to optimise the value in consumer spending and enhance the value of its assets.- The Edge Markets

Sarawak Plantation reports 45% drop in 2Q profit

Sarawak Plantation’s 2QFY23 net profit fell 45% YoY to RM16.6m due to revenue declined amid lower realised average selling prices of crude palm oil (CPO) and palm kernel (PK), despite higher sales volume. According to the group, average CPO prices dropped 41.6% in the period, while PK prices fell 44.4%, although sales volume for CPO rose 8.1% while PK improved 10%. Oil palm operations contributed RM127.2m or 99.9% of the group's total revenue for the quarter.- The Edge Markets

Our Thoughts

It was another mixed day on Wall Street as traders remained uncertain of the market direction going forward. Nonetheless, the financial and retail sectors bore the brunt of the selling as the US 10-year yield stayed elevated at 4.332%. As a result, the DJI Average lost 175 points while the Nasdaq added 8 points. Over in Hong Kong, the HSI rebounded by 168 points attributed to bargain hunting activities as recent decline to a 9- month low was deem too excessive amid the pessimism over China’s property market. On the home front, the FBM KLCI closed flat despite the apparent profit taking activities late in the session. This shows market’s undertone of the local bourse is resilient despite sentiment may have turned cautiously optimistic in view of recent headwinds from China and the US. For today, we believe trading will be lacklustre due to the absence of fresh leads thus expect the index to hover within the 1,445-1,455 range as we brace ourselves for an influx of corporate earnings over the next few days.

Source: Rakuten Research - 23 Aug 2023

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