Previous Day Highlights

FBM KLCI closed lower as profit taking activities emerged following the recent rally. The benchmark index declined 0.21% or 3.19 pts to close at 1,552.40. Majority of sectors were negative with energy (-1.3%), property (-1.3%), and health care (-1.0%) leading the losers; while gainers were seen in technology (+0.4%), and financial services (+0.1%). Market breadth was negative with 652 losers against 386 gainers. Total volume stood at 3.65bn shares valued at RM2.71bn.

Major regional indices trended mixed. HSI gained 1.57%, to end at 16,503.10. SHCOMP increased 0.97%, to close at 2,950.96. Nikkei 225 eased 0.26%, to finish at 38,262.16. STI slid 0.83%, to close at 3,217.11.

Wall Street closed mixed as investors awaited more clues from AI-tech stock earnings. The DJIA added 0.13%, to end at 38,612.24. Nasdaq eased 0.32%, to close at 15,580.87. S&P500 rose 0.13%, to finish at 4,981.80.

News For The Day

HLIND books highest quarterly profit since 4QFY18

Hong Leong Industries’ 2QFY6/24 net profit jumped 39.36% YoY to RM102.47m versus RM73.53m, highest since 4QFY2018, attributed mainly to a favourable sales mix of motorcycle models and a disposal gain on its fibre cement board manufacturing business. However quarterly revenue fell 11.65% YoY to RM743.55m from RM841.61m, due to lower sales. The group declared a special dividend of 50 sen per share for the quarter under review. The Edge Markets

Sunway Construction bags contract worth RM720.98m

Sunway Construction Group’s unit, Sunway Construction SB has bagged a contract worth RM720.98m from Sunway Lost World Water Park SB, in a related party transaction. The project commences on March 1, 2024, and is expected to be completed on Jan 31, 2027. -The Star

Apex Healthcare closes FY23 on record high earnings

Apex Healthcare’s 4QFY23 net profit fell 42.41% YoY to RM20.06m from RM34.84m largely due to lower share of earnings from associates but declared a special dividend following a record year thanks to a disposal gain. Revenue for the quarter however rose 8.85% YoY to RM240m from RM220.49m.-The Edge Markets

Starbucks boycott drags Berjaya Food into 2Q red

Israel-Palestine conflict boycott of the Starbucks franchise dragged Berjaya Food (BFood) down to a record net loss of RM42.58m for 2QFY6/24 against a net profit of RM35.49m YoY. Quarterly revenue fell 38.19% YoY to RM182.55m versus RM295.32m due to the boycott. -The Edge Markets

Citaglobal, Reneuco get RM600m ECRL power contract

Reneuco and Citaglobal said that their consortium has secured a contract worth RM600m for electricity supply to the East Coast Rail Line (ECRL). The contract includes development of the transmission and distribution interconnection facilities, as well as the operation and maintenance of the assets over 30 years. These facilities are expected to be completed from early- to mid-2026. -The Edge Markets

Kobay Technology 2Q net profit plunges 66%

Kobay Technology 2QFY6/24 net profit plunged 66% YoY to RM3.07m compared with RM9.03m due to a shift towards lower margin sales, subdued demand, and elevated setup costs. Revenue for the quarter slipped 6% YoY to RM77.25m from RM82.15m.-The Edge Markets

Our Thoughts

Wall Street closed mixed as the Federal Reserve are not cutting rates anytime soon following a spate of strong economic data of late. Thus, while the DJI Average added 48 points, the Nasdaq lost 49 points as traders are waiting for Nvidia’s latest round of earnings that beat expectations after the closing bell. Meanwhile, the US 10-year yield inched higher at 4.319%. Over in Hong Kong, the HSI continues with its Dragon-rally as it added 255 points as many are expecting more easing on curbs for the property market. The HSI had rallied around 750 points after the Lunar New Year break. Back home, the FBM KLCI eased slightly but off the day low depicting that the local bourse is still well supported at current levels. Hence, following yesterday’s intermittent correction, we believe buyers to return and expect the index to hover within the 1,550-1,560 range today with interests shifting to the Technology and Telco sectors.

Source: Rakuten Research - 22 Feb 2024

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