Previous Day Highlights

FBM KLCI maintains its upward trend as market sentiment remains robust following the start of the corporate earnings season. The benchmark index was up 0.34% or 5.51 pts to close at 1,616.62. Majority of sectors were positive with technology (+2.5%), utilities (+1.4%), and property (+0.9%), leading the gains; while losers were seen in plantation (-0.3%), and REIT (-0.2%). Market breadth was positive with 846 gainers against 374 losers. Total volume stood at 7.23bn shares valued at RM4.54bn.

Major regional indices trended mostly higher except Nikkei 225 which eased 0.34%, to finish at 38,787.38. HSI gained 0.91%, to end at 19,553.61. SHCOMP surged 1.01%, to close at 3,154.03. STI advanced 0.26%, to close at 3,313.48.

Wall Street closed mixed as investors await for more clues on the interest rate outlook. The DJIA added 0.34%, to end at 40,003.59. Nasdaq eased 0.07%, to close at 16,685.97. S&P500 gained 0.12%, to finish at 5,303.27.

News For The Day

Mokhzani Mahathir to step down as Maxis chairman

Tan Sri Mokhzani Mahathir will step down as the non-executive chairman of Maxis, effective from June 30, after 15 years sitting on the board of the company. While the board assesses potential candidates to succeed Mokhzani, independent director Datuk Hamidah Naziadin will be appointed as the interim chairman from July 1. -The Edge Markets

ITMAX secures RM105.3m variation order from DBKL

ITMAX System has secured a RM105.3m variation order from Kuala Lumpur City Hall (DBKL) for an extension of its contract to provide CCTV and video messaging signages integrated transport information system services. ITMAX has been granted an extension of phase one of the video surveillance and VMS ITIS contract. With this VO, phase 1 of the ITIS contract will now run until 2029. -The Edge Market

PIE Industrial posts 31% drop in 1Q earnings

PIE Industrial's 1QFY12/24 net profit dropped 31.24% YoY to RM9.7m from RM14.11m, due to reduced demand caused by shortages of major integrated circuits. Quarterly revenue fell 28.06% YoY to RM239.18m from RM332.45m. However, PIE is positive on its outlook after it secured a new customer last month. -The Edge Markets

Malayan Flour Mills more than triples net profit in 1Q

Malayan Flour Mills reported its 1QFY12/24 net profit more than tripled to RM37.9m versus RM10.4m, thanks to higher margins in its flour and grain segment from lower wheat prices. Revenue for the quarter declined by 9.1% YoY to RM751.6m from RM826.69m due to lower sales volume. The company plans to invest RM100m to install a new flour milling line with a capacity of 600MT/day, after seeing improved utilisation rate in its operations in Malaysia and Vietnam. -The Edge Markets

Epicon gets subcontract job worth RM50m

Epicon’s wholly-owned subsidiary, Transnational Builder SB has secured a RM50m sub-contract from Axventure SB. The contract is for the works of structural reinforced concrete works for Tower 1 and Tower 2 under a high-rise residential development in Segambut, Kuala Lumpur. The contract is for 24 months and is expected to commence on May 20, 2024 and to be completed on May 19, 2026. -The Star

Kawan Renergy IPO oversubscribed by 94.99 times

Kawan Renergy, slated for a listing on the ACE Market of Bursa Malaysia on May 29, has seen its initial public offering (IPO) oversubscribed by 94.99 times. -The Star

Our Thoughts

Wall Street closed on a mixed note amid a perceived strong US economic growth and decelerating inflation. As a result, the DJIA ended on a record high above the 40,000 mark while the Nasdaq lost 12 points as the US 10- year yield edged higher at 4.422%. In Hong Kong, the HSI ended on another YTD high and closing in on the magical 20,000 anytime soon, propel by solid corporate earnings and accommodative policies from China. Back home, the FBM KLCI maintained above the crucial 1,600 level despite some intermittent consolidations along the way. We see such performance as highly promising, especially daily volume is also on the rise. Though prevailing interests may be on the big-caps, we believe the liquidity will eventually cascade down to the smaller-caps thus we see prevailing conditions as a perfect mixture for a meaningful “Bull-Run” for the local bourse. For today, we expect the index to hover between the 1,615-1,625 range. Meanwhile, it is worthwhile to note that our MYR is quietly climbing against the greenback now hovering below the RM4.70 mark from RM4.80 last month.

Source: Rakuten Research - 20 May 2024

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