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Author: MalaccaSecurities   |   Latest post: Wed, 25 Nov 2020, 10:23 AM


Mplus Market Pulse - 14 Aug 2020

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All eyes on GDP data

Market Review

Malaysia: Renewed buying interests in glove heavyweights, coupled with the extended gains in financial heavyweights sent the FBM KLCI (+1.3%) to snap a four day losing streak as gains were in line with the mostly positive sentiment across regional peers yesterday. The lower liners also rebounded, while the REIT (-0.5%) and energy (-0.8%) sectors underperformed the positive broader market.

Global markets: US stockmarkets retreated as the Dow fell 0.3% after investors, brushing off the weekly jobless claims that fell below 1.0m for the first time in four months. Earlier, European stockmarkets also finished lower, but Asia stockmarkets closed mostly higher.

The Day Ahead

After some hiccups in recent days, investors have now begun to bargain hunt on beaten down glove-related stocks. While we think that quick profit taking may set in with the outlook remain indifferent weigh-down by on-going Sino-US geopolitical concerns and rising number of Covid-19 cases, the recent buying from foreign funds may provide some stability. Meanwhile, investors will be keeping an eye on the release of 2Q2020 Malaysia GDP data which is widely touted to be the first contraction since 3Q2009.

Sector focus: The sharp recovery in gold prices may trigger renew buying interest in gold-related stocks. Meanwhile, healthcare-related stocks are also on the move once again which may set off another wave of recovery over their positive prospects over the foreseeable future.

FBMKLCI Technical Outlook

The FBM KLCI has gapped up to re-test the daily EMA9 level after lingering in the positive territory for the entire trading session yesterday. We reckon that further upsides may lift the local bourse towards the immediate resistance at 1,590, followed by 1,615. On the downside, the immediate support remained pegged at 1,550, followed by 1,540. Indicators are still weak with the MACD Line continues to tread below the Signal Line, while the RSI remains below 50.

Company Brief

Axiata Group Bhd has successfully priced a dual- tranche offering comprising 10- year US$500.0m Sukuk and a 30-year US$1.00bn conventional notes. It has secured the lowest-ever borrowing cost by an Asian corporate. (The Star)

Berjaya Corp Bhd (BCorp) has aborted its proposed takeover of Singer (M) Sdn Bhd, from Berjaya Retail Sdn Bhd (BRetail) and its largest shareholder Tan Sri Vincent Tan, for RM536.0m due to business challenges and uncertainty in the recovery of the economy due to the Covid-19 pandemic. (The Edge)

Heineken Malaysia Bhd’s incurred a net loss of RM18.2m for 2QFY20 — its first loss-making quarter compared with a net profit of RM65.7m it made a year ago, as its business was impacted by the Movement Control Order that was implemented to curb the spread of the Covid-19 pandemic. Revenue for the quarter fell 50.5% YoY to RM253.7m. (The Edge)

GuocoLand (Malaysia) Bhd's 68.0% owned-unit, GLM Emerald Industrial Park (Jasin) Sdn Bhd, is selling two parcels of land in Jasin, Melaka, measuring 549 hectares in total to Scientex Bhd for RM260.2m cash. RM215.4m of the sale proceeds will be used for its working capital requirements and/or as distribution to GLM Emerald shareholders, with the balance being used to defray the costs of sale. The disposal is expected to result in a net gain of RM79.0m. The purchase of the land is a strategic investment opportunity to increase and boost its existing land bank, which is also in line with its goal to build more than 50,000 affordable homes nationwide by 2028. (The Edge)

Gas Malaysia Bhd’s (GMB) 2QFY20 net profit fell 9.0% YoY to RM44.6m due to a lower revenue despite higher margin and finance income, and lower joint venture losses. Revenue for the quarter declined 11.4% YoY to RM1.54b from RM1.74b. A first interim dividend of RM54.6m or 4.25 sen per share, payable on 8th October 2020 was declared. (The Edge)

GPA Holdings Bhd, a battery manufacturer confirmed that it has been approached by data centre operator for Regal Orion Sdn Bhd for a possible reverse takeover. (The Edge)

Source: Mplus Research - 14 Aug 2020

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