Previous Day Highlights

FBM KLCI closed higher driven by hopes of a pause in the US rate hike due to cooling inflation data. The benchmark index was up 1.04% or 15.12 pts to close at 1,466.84. Majority of sectors were positive with health care (+1.6%), property (+1.1%), and consumer (+1.1%) leading the gains, while loser was seen in REIT (-0.2%). Market breadth was positive with 595 gainers against 359 losers. Total volume stood at 3.94bn shares valued at RM2.21bn.

Major regional indices trended positively in tandem with the overnight performance of Wall Street. HSI surged 3.92%, to end at 18,079.00. SHCOMP increased 0.55%, to close at 3,072.84. Nikkei 225 up 2.52%, to finish at 33,519.70. STI rose 0.88%, to close at 3,132.12.

Wall Street closed higher on optimism of easing inflation. The DJIA added 0.47%, to end at 34,991.21. Nasdaq rose 0.07%, to close at 14,103.84. S&P500 rose 0.16%, to finish at 4,502.88.

News For The Day

MPI 1Q net profit tumbles to RM16.52m

Malaysian Pacific Industries’ (MPI) 1QFY6/24 net profit declined by 68.65% YoY to RM16.52m from RM52.70m, partly due to lower revenue and appreciation of the US dollar against the ringgit. MPI cautioned the current Middle East conflict could further dampen the recovery of the semiconductor industry in the near future. Its quarterly revenue dropped by 9.01% YoY to RM513.21m compared to RM564.02m on the back of softer global semiconductor demand. The group declared an interim dividend of 10 sen per share, to be paid on Dec 19.-The Edge Market

UEM Sunrise’s 3Q net profit falls 59% on lower profit margin

UEM Sunrise’s 3QFY12/23 net profit dropped 59.04% YoY to RM8.34m compared to RM20.35m on lower operating profit margins, profit margin decreased to 14% from 16% previously, due to higher selling and distribution expenses incurred by its new project launches. Its quarterly revenue fell 12.2% YoY to RM312.35m from RM355.76m amid lower revenue contribution from projects in Mont Kiara, Semenyih and Iskandar Puteri, Johor. The Edge Market

Kossan returns to black in 3Q

Kossan Rubber Industries reported its 3QFY12/23 net profit of RM40.97m, up 76.14% YoY from RM23.26m, thanks to better cost controls and lower raw material costs in its glove business, as well as the sale of higher margin infrastructure products at its technical rubber products (TRP) division. The stronger earnings came despite revenue being 28% YoY lower at RM403.48m versus RM560.52m, as contribution dropped from all divisions.-The Edge Market

Berjaya Food's 1Q profit fell

Berjaya Food’s 1QFY6/24 net profit fell by 45.16% YoY to RM19.03m from RM34.7m as inflationary cost pressures squeezes its margins. Revenue dipped 1.6% YoY to RM278.53m from RM283.05m, mainly due to lower sales from its Kenny Rogers Roasters’ restaurants in Malaysia. The group declared a first interim share dividend of 0.44 sen per share distribution in respect of FY24 to be paid on Dec 29. -The Edge Market

Amway 3Q net profit rises to RM46.21m

Amway (M) Holdings’ 3QFY12/23 net profit rose to RM46.21m from RM18.75m YoY. However, revenue for the quarter under review fell 10.3% YoY to RM333.47m from RM371.79m due to softer demand in health and wellness products and home appliances. Amway has declared a third single-tier interim dividend of five sen net per share in respect of FY23. -The Star

Our Thoughts

Wall Street continued to climb predominantly fueled by weaker US inflationary data which ultimately indicates the end of the Federal Reserves’ battle with rate hikes. Although there are no signs of any rate cut as yet, sentiment remains positive that interest rates may have peaked. As such, the DJI Average jumped by 163 points while the Nasdaq added 9 points as the US 10-year yield inched marginally higher at 4.537%. Over in Hong Kong, the HSI surged past the 18,000 mark on cooling US economy coupled with the US$137bn rescue package for the property sector. Back home, the FBM KLCI maintained its upward momentum underpinned by broad-based buying amid a strong regional performance. We believe the accumulation of stocks to persist today thus expect the index to hover within the 1,465-1,475 range. Meanwhile, we maintain our view that the benchmark index will close at a year high above the 1,500 level with our 2023 target set at 1,560.

Source: Rakuten Research - 16 Nov 2023

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