Previous Day Highlights

FBM KLCI ended at its intra-day high attributed to late buying activities. The benchmark index was up 0.59% or 9.08 pts to close at 1,552.83. Majority of sectors were positive with property (+1.2%), utilities (+1.0%), and telecommunications (+0.8%) while losers were seen in plantation (-0.3%), and consumer (-0.3%). Market breadth was positive with 521 gainers against 474 losers while 518 were unchanged. Total volume stood at 4.53bn shares valued at RM4.82bn.

Major regional indices trended mostly lower taking the negative cue from

Wall Street overnight. HSI declined 1.42%, to end at 16,720.89. SHCOMP increased 0.54% to 3,054.64. Nikkei 225 eased 0.26%, to finish at 38,707.64. STI slid 0.42%, to close at 3,172.96. Wall Street closed lower as market sentiment remains fragile due to inflation woes. The DJIA dropped 0.49%, to end at 38,714.77. Nasdaq eased 0.96%, to close at 15,973.17. S&P500 eased 0.65%, to finish at 5,117.09.

News For The Day

Petronas posts lower FY23 earnings as 4Q profit drops 32%

Petroliam Nasional (Petronas), the country’s state-owned oil and gas company, posted its 4QFY23 net profit of RM16.6bn, down 32% YoY from RM24.4bn, due to lower average realised prices. Quarterly revenue dropped 12% YoY to RM91.7bn from RM104.2bn. For FY23, Petronas’ net earnings dropped 20.6% to RM80.7bn from a record high of RM101.6bn in FY22, as revenue fell 7.7% to RM343.6bn from RM372.3bn. For FY2024, it plans to give out RM32bn as dividend and spend between RM50bn and RM60bn for capital expenditure.-The Edge Markets

PetGas commits to compressor station costing up to RM650m

Petronas Gas (PetGas) has made the final investment decision for the development of a new compressor station costing up to RM650m in Jeram, Selangor. The project involves the construction of a two-unit gas compressor to boost capacity of the Peninsular Gas Utilities (PGU) pipeline network to meet rising demand for gas starting from 2026. This project is targeted to be completed in 2026. -The Edge Markets

Boost Bank gets additional RM8.5m injection

Boost Bank, a digital bank venture by RHB Bank Bhd and Boost Holdings SB, an indirect subsidiary of Axiata Group, has received an additional RM8.5m from its shareholders. RHB Bank contributed RM3.4m to maintain its 40% stake, while Boost Holdings added RM5.1m to keep its 60% stake. This funding will support Boost Bank’s operational and capital expenditures for 1HCY24 and ensure compliance with Bank Negara Malaysia’s minimum capital requirements. -The Edge Markets

Binastra wins RM370m contract

Binastra Corp’s wholly-owned subsidiary, Binastra Builders SB has secured a RM369.95m construction contract from Exsim Jalil Link SB, for construction and completion of the proposed development of three blocks of suites apartments at Bukit Jalil, Kuala Lumpur. The contract shall complete within 41 months from the date of commencement which will be notified in due course by architect’s instruction. -The Star

Fajarbaru clinches RM11m contract for RMAF redevelopment

Fajarbaru Builder Group has been awarded a minor works contract worth RM13.81m together with Avionics Pty Ltd, a wholly-owned unit of Avionics Holdings Pty Ltd for the partial delivery phase (early works) of redeveloping military facilities at the Royal Malaysian Air Force (RMAF) base in Butterworth, Penang. The contract was awarded by the Australian Department of Defence. -The Edge Markets

Our Thoughts

Wall Street ended broadly lower as the US inflation remains hot hence dashing hopes of early rate cut ahead of the FOMC meeting over the next 2 days. As such, the DJI Average lost 191 points while the Nasdaq declined by 155 points with the US 10-year yield edged higher to 4.308%. Over in Hong Kong, the HSI closed weaker as China holds its policy rate unchanged amid a slack property market. The HSI had tumbled by more than 300 points over the last 2 days. On the home front, the FBM KLCI surged past the 1,550 mark attributed to some last minute buying. However, we reckon market undertone may have turned cautious taking cue from Wall Street thus expect the index to hover within the 1,545-1,555 range today. Meanwhile, it is worthwhile to note that daily volume has improved to above the 4bn shares level as more money is being ploughed back into the blue chips of late. Hopefully this is sustainable as this will certainly cascade onto the smaller caps in due course.

Source: Rakuten Research - 18 Mar 2024

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