Previous Day Highlights

The FBM KLCI closed higher due to bargain hunting activities following the selldown a day before. The benchmark index gained by 0.32% or 4.56 points to end at 1,444.67. Gainers were led by PPB, CDB and SIMEPLT. Market breadth was positive with 500 gainers against 421 losers while 416 counters were unchanged. Total volume stood at 3.53bn shares valued at RM1.91bn.

Major regional markets ended in positive territory. Nikkei225 and STI gained 0.87% and 0.33% to close at 32,287.21 and 3,184.78 respectively. Meanwhile, HSI and SHCOMP rose by 2.05% and 0.12% to end at 18,212.17 and 3,082.24.

Wall Street ended sharply lower yesterday as investors were cautious ahead of Federal Reserve chair Jerome Powell's speech Friday. The DJIA lost 1.08% to finish at 34,099.42. Meanwhile S&P500 and Nasdaq slumped 1.35% and 1.87% to end at 4,376.31 and 13,463.97 respectively.

News For The Day

Sime Darby to acquire 61.2% stake in UMW in RM3.57bn deal

Sime Darby has entered into a conditional share purchase agreement to acquire PNB’s entire 61.2% stake in UMW Holdings for RM3.57bn cash or RM5 per share. Once the agreement becomes unconditional, the group said it will undertake a general offer for the remaining 38.8% stake it does not hold with the aim of delisting UMW from Bursa Malaysia.-The Star

Sime Darby’s 4Q profit doubles YoY to RM622m

Sime Darby’s 4QFY6/23 net profit doubled to RM622m boosted by a gain on disposal of motor properties of RM177m (net of deferred tax adjustment) and dividend income of RM194m. The Edge Markets

RGB International posts RM26.5m in 2Q

RGB International posted its 2QFY23 net profit of RM26.5m compared with a net loss of RM2.7m YoY, driven by higher earnings from its sales and marketing (SSM) and technical support and management (TSM) divisions. The group expects to achieve a strong performance FY2023, backup by the sturdy orders secured to date. - The Edge Markets

KLK proposes to buy 33% and one share in BPlant for RM1.15bn

Kuala Lumpur Kepong Bhd (KLK) has proposed to buy 739.2m shares or 33% and one share in Boustead Plantations (BPlant) for a total of RM1.15bn or RM1.55 per share and plans to take the company private via a mandatory general offer (MGO). Barring any unforeseen circumstances, KLK assumed the proposed acquisition and proposed offer to be completed in 4Q23.– The Edge Markets

T7 Global net profit surged to RM6.43m in 2Q

T7 Global posted a net profit of RM6.43m, which was an increase of about 140% YoY. The company is optimistic over its prospects, which remain supported by a RM2.4bn order book to be recognised over the next 10 years. CEO Tan Kay Zhuin said the group's energy division remains steadfast in executing contracts in hand while expecting contributions from the baggage handling system asset replacement programme for KL International Airport Terminal 1 this year. - The Star

PNB weighs RM10bn automotive merger in EV push

PNB is considering merging Sime Darby Motors and Perusahaan Otomobil Kedua (Perodua) to create an automotive giant worth over RM10bn. State-owned PNB is talking to advisers to explore options including first by merging the holding companies of the two units then creating the bigger automotive group that could help spearhead the development of the electric vehicle (EV) sector in Malaysia. The Star

Our Thoughts

Wall Street slumped as the recent tech rally fizzled out with traders now bracing themselves for a key speech from the Feds chairman Jerome Powell later today. As such, the DJI Average lost 374 points while the Nasdaq declined by 257 points as the US 10-year yield edged higher to 4.241%. Over in Hong Kong, the HSI surged past the 18,000 mark as sentiment was buoyed by a solid set of corporate earnings while traders were also taking the opportunity to bargain hunt. On the home front, the FBMKLCI closed in positive territory as market’s undertone remains positive. It is interesting to note that buying on Plantation counters remains strong as the recent spike in the crude palm oil price should boost earnings in the 3Q2023 thus investors are anticipating for a better performance from the planters this year. For today, we believe the index to possibly hover between the 1,440-1,450 range.

Source: Rakuten Research - 25 Aug 2023

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