Previous Day Highlights

21 May 2024 FBM KLCI continue to soar to end at a 3-year high, in line with the regional peers. The benchmark index was up 0.67% or 10.88 pts to close at 1,627.50. All sectors were positive with construction (+2.5%), telecommunications (+1.5%), and industrial products & services (+1.5%), leading the gains. Market breadth was positive with 840 gainers against 460 losers. Total volume stood at 6.98bn shares valued at RM4.37bn.

Major regional markets closed higher buoyed by the China’s support on its ailing property sector. HSI escalated 0.42%, to end at 19,636.22. SHCOMP climbed 0.54%, to close at 3,171.15. Nikkei 225 jumped 0.73%, to finish at 39,069.68. STI was flat to close at 3,314.05.

Wall Street closed mixed as investors gaze at chipmakers' earnings. The DJIA dropped 0.49%, to end at 39,806.77. Nasdaq rose 0.65%, to close at 16,794.88. S&P500 advanced 0.09%, to finish at 5,308.13.

News For The Day

Public Bank's 1Q net profit slips 3.5% on higher costs

Public Bank’s 1QFY12/24 net profit slipped 3.5% YoY to RM1.65bn compared with RM1.71bn, mainly due to higher personnel costs and higher provisions. Net interest income rose 2.8% YoY to RM2.73bn, while non-interest income edged up 0.5% YoY to RM649.64m. Revenue for the quarter rose almost 10% YoY to RM6.8bn versus RM6.1bn.-The Edge Markets

KLK post lower 2QFY24 earnings

Kuala Lumpur Kepong’s 2QFY9/24 earnings fell 38.65% YoY to RM117.07m from RM190.8m amid continued underperformance in the manufacturing and property segments. Quarterly revenue decreased 9.81% YoY to RM5.46bn from RM6.05bn. The group announced an interim dividend of 20 sen per share, payable on July 30. Its plantation segment saw a profit growth of 24.5% YoY to RM357.68m, boosted by higher palm kernel prices and increased CPO sales volumes. -The Edge Market

Sunway Construction posts 16% rise in 1Q net profit

Sunway Construction Group, or SunCon’s 1QFY12/24 net profit increased 16.4% YoY to RM32.40m with RM27.83m, thanks to higher billings in newer projects. Its quarterly revenue rose 15.8% YoY to RM604.80m from RM522.13m. All in all, SunCon has secured RM1.72bn in new orders in 1QFY24; Outstanding order book stood at RM6.3bn. -The Edge Markets

Coastal Contracts secures vessel sale and charter extension

Coastal Contracts has secured a sale contract for an offshore support vessel and a 5 year extension for another vessel's charter contract. Coastal Contracts said its wholly-owned subsidiaries, Coastal International Marine Inc and Pleasant Engineering Sdn Bhd secured the sale and extension. -The Star

Kinergy's 1Q net profit doubles on new projects, entities

Kinergy Advancement reported its 1QFY12/24 net profit doubled to RM4.97m compared to RM2.43m, thanks to new projects and entities acquired. Revenue, however, declined 1.7% YoY to RM42.04m from RM42.76m due to the completion of some engineering projects.-The Edge Markets

Menang’s earnings rises to six-year high

Menang Corp (M) has declared a special dividend of six sen a share as its quarterly earnings rose to a six-year high since 4QFY2018. Menang reported its 3QFY6/24 net profit more than doubled to RM7.32m from RM3.28m, while revenue fell 5.13% YoY to RM21.03m from RM22.17m. The better quarterly earnings were due to an adjustment it made to reverse the over-accrued liability, totalling RM4.57m.-The Edge Markets

Our Thoughts

It was a mixed day on Wall Street as the DJIA declined following a record breaking run recently. Nonetheless, sentiment remains optimistic attributed good economic growth amid prospects of lower interest rates ahead. The DJIA eased 197 points while the Nasdaq jumped 109 points to a record high spurred mainly by the surge in Nvidia shares. Meanwhile, the US 10-year yield climbed to 4.447%. Over in Hong Kong, the HSI’s march towards the 20,000 level seems imminent as traders’ confidence remain intact over China’s aggressive move to ease inventory within the property sector via a slew of easing of restrictions. On the home front, the FBM KLCI eased past the 1,620 mark underpinned by persistent accumulation of blue chips. We believe such buying to continue as most of the blue chips are still reasonably valued as the broader index currently hovers within the 15x PE which is lower than its historical of 16.0-16.5x. Nonetheless, we expect the index to possibly take a breather ahead of Wesak Day holiday tomorrow thus expect it to trend between the 1,620-1,635 range today.

Source: Rakuten Research - 21 May 2024

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