Capital markets news summary for Wed 1 Mar 2023

Capital markets news summary for Wed 1 Mar 2023

Yinson signs 15-year FPSO contract for Angola

The company signed the agreement with a subsidiary of Azule Energy, a 50:50 joint venture between BP and Eni. The aggregate value of the contract is USD5.3b over a 15-year period after final acceptance with the option to extend for another 5 years. The floating production storage and offloading (FPSO) vessel will commence operations in 4Q2025 at the Agogo Integrated West Hub Development Project. On 2 Dec, both parties signed an agreement for preliminary activities. FPSO Agogo will be Yinson’s first offshore production project in Angola and 8th in West Africa. It brings the total order book to USD22.4b. The counter closed at RM2.70.

PPB Group net profit up 47% in 2022

The company recorded net profit of RM2.2b compared with RM1.5b in 2021. Revenue was up from RM4.65b the previous year to RM6.15b. Wilmar contributed a 40% increase in pre-tax profit to RM2.1b. For the group, grains and agribusiness earned profit of RM4.66b from RM3.69b in 2021 owing to a more stable grain commodity market. The consumer products segment saw higher sales of bakery and fast moving consumer products to RM751m from RM644m in 2021. Higher admissions and box office collections post-lockdown helped increase the film exhibition and distribution segment to RM515m from RM116m in 2021. The property segment had new sales and progressive profit recognition from a completed residential project plus better mall performance for revenue of RM141m compared with RM114m in 2021. The company expects grain commodity prices to remain volatile with uncertain weather conditions in grain-growing countries and the on-going Ukraine war. The counter closed at RM17.50.

MAHB turns around after 11 quarterly losses

The company recorded RM359.14m in net profit for 4Q2022 compared with a net loss of RM136.73m in 4Q2021. Revenue was up 81.89% from RM551.34m to RM1b. Higher passenger volumes as travel restrictions are loosened, further resumption of airline services, reduction in utilisation fees and better results from joint ventures and associates helped the company buck losses since 1Q2020. For the full year, net profit was RM187.2m compared with a net loss of RM766.44m in 2021 whereas revenue climbed 86.91% from RM1.67b to RM3.13b. While the Malaysian operations recorded a narrower loss before tax of RM61.1m in 4Q2022 from RM193.7m in 4Q2021, Turkiye contributed profit before tax of RM504.4m against a loss before tax of RM22.3m. Profit before tax from Qatar was RM1.9m in 4Q2022 up from RM1m the prior year. The counter closed at RM6.79.

Gamuda kicks Hartalega out of MSCI Emerging Market Index

The MSCI Emerging Markets Index (EMI) is used to measure the stock market performance across 24 emerging market countries with 1,374 constituents. The index covers 85% of the market capitalisation of each country. Some foreign investors rely on the index when making investment decisions. The replacement between Gamuda and Hartalega was made at close of yesterday. The revised proforma weightage for Malaysia in the MSCI Emerging Market Index (EMI) is 1.5% – compared with 1.53% on 12 Dec 2022 – with 34 constituents. The combined market capitalisation of the 34 constituents is RM1.065t. The counters recorded total foreign outflows of RM808.06m up to 17 Feb as investors sold ringgit assets and bought US dollar assets. Maybank saw RM240.84m in foreign outflows, Petronas Chemicals (RM213m), Public Bank (RM181.16m), CIMB (RM146.63m) and Press Metal (RM111.64m). Top counters with foreign inflows were Genting (RM85.62m), TNB (RM77.06m) and Digi (RM37.99m). Gamuda closed at RM4.20 while Hartalega closed at RM1.47.

US-China tensions force Apple suppliers out of China

The pace is expected to pick up to pre-empt any fallout. AirPods maker GoerTek is already investing USD280m in a Vietnam plant and is considering expanding in India. US tech companies are urging manufacturers to explore alternative locations with questions on timing key in discussions. The US-China conflict started with Trump’s tariff war but has now expanded to bans on chip exports and capital. In addition, the Zero Covid policy forced a rethinking on supply chains. Driven by Apple, 90% of its suppliers are planning large-scale shifts to India, in particular because of its large domestic market and potential as a manufacturing base. Vietnam is also attractive because of its proximity to China, coastal network of ports, young educated workforce and relative political stability.