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Author: MalaccaSecurities   |   Latest post: Thu, 3 Dec 2020, 8:47 AM

 

Mplus Market Pulse - 2 Jun 2020

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Re-Testing 1,500 Level

  • The FBM KLCI (+1.2%) marched higher alongside with gains across regional peers, led by gains from healthcarerelated heavyweights, coupled with the stronger than expected Chinese economic data. The lower liners - the FBM Small Cap (+0.1%), FBM Fledgling (+1.4%) and FBM ACE (+5.5%), all extended their gains. Amidst the mixed broader market, the healthcare sector (+5.4%) outperformed.
  • Market breadth turned negative as decliners outmatched the advancers on a ratio of 574-to-511 stocks. Traded volumes gained 14.1% with 10.31 bln shares exchanging hands implying that market risk appetite remain well put in the equity markets.
  • Asia benchmark indices advanced as the Nikkei (+0.8%) recovered all its previous session losses, while the Hang Seng Index jumped 3.4%. The Shanghai Composite (+2.2%) advanced for the third straight session on the back of the stronger-than-expected Purchasing Manager’s Index (PMI) in May 2020 that stood at 50.6, whilst the Caixin/Markit manufacturing PMI for May 2020 stood at 50.7. Asia stockmarkets, meanwhile, were traded in a robust manner on Monday.
  • U.S. stockmarkets ended modestly higher as the Dow climbed 0.4% as investors shift their attention from the recent civil unrest to the prospect of economy re-opening in all 50 states in America. On the broader market, the S&P 500 (+0.4%) extended its gains with only the healthcare sector in the red (- 1.0%), while the Nasdaq finished 0.7% higher.
  • Major European stockmarkets also marched higher alongside with gains across the globe as the FTSE and CAC gained 1.5% and 1.4% each as investors breathe sigh of relief after there were no signs of escalating U.S.-China tensions. Germany’s DAX was closed for the Whit Monday public holiday.

The Day Ahead

  • It was another strong performance on the FBM KLCI as investors turned optimistic following the softer undertone from U.S. President Donald Trump remarks against China. The unabated firm buying interest in healthcare-related heavyweights also provided additional legs for the FBM KLCI to march higher as we see buying momentum are not tapering anytime over the foreseeable future.
  • Moving forward, we reckon that the 1,500 psychological level would likely to be retested as investors continue to cheer on the gradual re-opening of economy across the globe. Beyond that, the 1,510 level will serve as the resistance. On the flipside, the support is now pegged at the 1,460 level.
  • The lower liners and broader market shares continue to show resilience. This is demonstrated by high trading volumes that suggest rotational play is still on the table. Apart from the healthcare stocks, we expect the oil & gas stocks to garner some limelight as Brent oil prices finished at its highest level in two months.

COMPANY BRIEF

  • K-One Technology Bhd (K-One Tech) has been granted a non-exclusive license agreement (NELA) by NASA Jet Propulsion Laboratory (NASA-JPL) United States (US) to manufacture and distribute the Ventilator Intervention Technology Accessible Locally (VITAL) ventilators worldwide. The manufacturing and distribution of the low-cost VITAL ventilator is to meet the shortage of ventilators in specific countries and also to prepare for the second wave of COVID-19 infections as countries begin to lift their respective lockdowns. (Bernama)
  • Pintaras Jaya Bhd has announced that its sub-subsidiary Pintary Foundations Pte Ltd has secured a piling project valued at about RM119.0 mln. The projects commences in August 2020 for a period of 10 months. (The Star)
  • Berjaya Corporation Bhd (BCorp) will be taking over home electronic appliances distributor Singer (M) Sdn Bhd. The transaction might involve the issuance of BCorp shares. Singer is currently owned by BCorp’s controlling shareholder Tan Sri Vincent Tan. BCorp has requested for a trading suspension of its shares yesterday and today pending the announcement of a material transaction. (The Edge)
  • Berjaya Food Bhd’s (BFood) 3QFY20 net loss stood at RM1.4 mln on top of revenue of RM158.6 mln as it was adversely affected by the Covid-19 pandemic. There were no comparison numbers for the previous year’s corresponding quarter, due to a change in its financial year end from 30th April to 30th June. (The Edge)
  • Eversendai Corp Bhd’s wholly-owned unit Eversendai Offshore has secured two European offshore wind renewable energy projects worth a total of RM186.0 mln combined from Petrofac Ltd. This brings its outstanding construction order book to an all-time high of RM2.88 bln. The first project is to fabricate and construct an offshore wind substation platform topside, jacket and piles for an offshore wind farm in the UK, while the other project is to fabricate and construct jacket and piles for an offshore wind substation platform in the Netherlands. (The Edge)
  • Malayan United Industries Bhd (MUI) has clarified that its 98.2%-owned subsidiary Metrojaya Bhd continues to operate its retailing business as usual through various subsidiaries including MJ Department Stores Sdn Bhd's outlets and EIC Clothing Sdn Bhd’s East India Company specialty store. A day earlier, there had been some confusion over the news of the winding-up of Metrojaya Department Stores Sdn Bhd and East India Company Clothing (Malaysia) Sdn Bhd, which are dormant subsidiaries of Metrojaya Bhd. (The Edge)
  • Parkson Holdings Bhd's 55.0%-owned Hong Kong-listed unit has inked a 20- year tenancy agreement for a commercial space measuring 54,000 sq m in Wuzhou City, China. The agreement was inked between Parkson Retail Group Ltd’s indirect wholly-owned Nanning Brilliant Parson Commercial Co Ltd and landlord Wuzhou Sankee Investment Co Ltd. (The Edge)
  • Sime Darby Plantation Bhd's indirect wholly-owned unit Ultra Oleum Pte Ltd has disposed of its entire 52.0% stake in Verdant Bioscience Pte Ltd (VBS) to SIPEF and Ackermans & van Haaren NV for US$8.6 mln (RM37.4 mln). VBS, incorporated in Singapore is principally engaged in the research and development of life sciences and biotechnology in the areas of plantation science, plant breeding and seed production. (The Edge)
  • UMW Holdings Bhd has announced a change in its boardroom after the sudden passing of its president and group CEO Badrul Feisal Abdul Rahim, 50, yesterday had left the positions vacant in the diversified group. Badrul Feisal had served as the president and group CEO of UMW Group since his appointment on 1st October 2015. He joined UMW Group as senior general manager at the president & group CEO’s office in December 2010 and was appointed as the acting executive director for the UMW oil & gas division from April 2011 to December 2011. (The Edge)  

Source: Mplus Research - 2 Jun 2020

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