Rakuten Trade Research Reports

Daily Market Report - 31 May 2023

Publish date: Wed, 31 May 2023, 08:53 AM
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Previous Day Highlights

The FBM KLCI ended below the phycological support level of 1,400 despite the upbeat regional performance. The benchmark index tumbled 0.57% or 8.02 points to close at 1,396.91 with losers led by NESTLE, PETDAG and KLK. Market breadth was negative with 466 losers against 358 gainers while 431 were unchanged. Total volume stood at 2.38bn shares valued at RM2.01bn.

Key regional markets closed mostly higher with a vote looming ahead on the US debt ceiling deal except STI that dropped 0.24% to end at 3,187.56. Meanwhile, Nikkei 225, HSI and SHCOMP gained 0.30%, 0.24% and 0.09%, respectively to close at 31,328.16, 18,595.78 and 3,224.21.

Wall Street closed on a mixed note as the debt-ceiling deal goes to Congress. The DJIA erased 0.15% to end at 33,042.78 whereas Nasdaq added 0.32% to end at 13,017.43 while S&P500 closed flat at 4,205.52.

News For The Day

MyEG net profit grew 25% in 1Q on better margins

MyEG Services’ 1QFY23 net profit rose 25.18% YoY to RM105.94m from RM84.63m attribute to overall increase in revenue from its existing services with higher margins. Quarterly revenue also increased by 7.08% YoY to RM173.22m from RM161.77m. The better set of results is also due to a one- off recognition of fair value gain of RM3.76m in investment in Agmo Holdings. -The Edge Markets

MAHB posts second straight quarterly net profit in 1Q

MAHB, which operates 39 airports in the country, said it expects traffic numbers to approach pre-pandemic levels by the end of the year. Its total passenger traffic rebounded to 26.8m passengers in 1QFY23 as compared with 14.7m YoY. MAHB posted a second straight quarterly profit of RM58.19m in its 1QFY23, driven by international passenger traffic that more than tripled compared with 1QFY22, as Malaysia’s borders reopened from April 22 onwards. – The Edge Markets

KPJ Healthcare’s 1Q profit more than doubles to RM52m

KPJ Healthcare’s 1QFY23 net profit rose 134.44% YoY to RM51.9m from RM22.14m, mainly driven by the performance from the Malaysian segment. Revenue went up 29.2% YoY to RM828.98m from RM641.64m. “The slowing down of Covid-19 rate in Malaysia supported by the opening of the national border since April 1, 2022, contributed to this better performance,” said the group -The Edge Markets

Farm Fresh logs weakest quarterly earnings since listing

Farm Fresh’s 4QFY3/23 net profit dropped 72.35% YoY to RM4.89m from RM17.68m, despite delivering an all-time high revenue, as elevated raw material costs and foreign exchange rate fluctuation ate into its profit. This is the group's weakest quarterly earnings since its listing in March 2022, as the group’s profit margin dropped to 3.03% from 13.81% YoY. The drop in quarterly earnings was also due to higher distribution costs and higher salary expenses following the 25% hike in minimum wage, and a fair value loss on the valuation of biological assets of RM1.27m. -The Edge Markets

Pestech International bags US$81.77m contract from Iraq

Pestech International through its unit Pestech SB joint venture with China Energy Engineering Group Tianjin Electric Power Construction has secured a US$81.77m (RM376.26m) from Iraq’s Ministry of Electricity. The contract is for the works known as the Electricity Sector Reconstruction Project Phase (III), Lot 1-Construction of four 132 kilovolt Gas Insulated Switchgear (GIS) Substations in Baghdad, Iraq. -The Star It was another mixed session on Wall Street as traders wait for the Congress to vote on the hike of the US debt ceiling of which an agreement had already been reached between the Republican and Democrat. As such, the DJI Average lost 50points while the Nasdaq added 42 points as the US 10-year yield eased to 3.694%. Meanwhile, Hong Kong stocks snapped its week-long downtrend as the HSI closed 45 points higher on hopes that the US debt ceiling impasse will be resolved. On the domestic front, the FBM KLCI ended to below the psychological 1,400 level as sentiment remained edgy amid the prevailing political climate ahead of the state elections. Selling was apparent on selected Banking and Plantation heavyweights late in the session. We reckon bargain hunting activities to emerge if the index touches the 1,390 mark and would advise accumulation on Banking stocks. For today, we expect the index to hover within the 1,390-1,400 range.

Source: Rakuten Research - 31 May 2023

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