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


Mplus Market Pulse - 24 Aug 2020

Author:   |    Publish date:

Still lacklustre

Market Review

Malaysia: The FBM KLCI (+0.1%) chalked in miniscule gains after trading largely in a tight range without any fresh catalyst. Albeit that, the key index recorded 0.8% WoW gains as market sentiment stabilised. The lower liners marched higher, while the broader market closed mostly higher with the technology sector (+3.0%) rising for the past four consecutive trading days.

Global markets: US stockmarkets extended their gains as the Dow rose 0.7% while both the S&P 500 (+0.3%) and the Nasdaq (+0.7%) finished at fresh record high levels on the stronger-than-expected preliminary PMI data, coupled with the solid on sales of existing homes that rose 8.7% YoY in July 2020. European stockmarkets remain downbeat, but Asia equities closed mostly higher.

The Day Ahead

With the lack of fresh leads, the FBM KLCI may linger within a tight range as gains will be tempered by quick profit taking activities. As it is, investors will continue to digest the barrage of corporate earnings releases to re-asses their investment strategies. We also see trading activities among the lower liners to remain vibrant, supported by the uninterrupted liquidity as investors continue to seek for higher yields in the equities market.

Sector focus: We continue to favour the technology sector following the fresh record close on Nasdaq, coupled with the strong billings of semiconductors. We also think that the plastic packaging and EMS-related stocks may charge higher owing to the recent positive batch of corporate earnings amid the resilient demand.

FBMKLCI Technical Outlook

The FBM KLCI edged mildly higher as the key index remained marginally above the daily EMA20 level. Nevertheless, we reckon that the consolidation will remain a feature with the 1,600 serving as the immediate resistance, followed by 1,615. On the downside, the immediate support remained pegged at 1,550, followed by 1,540. Indicators remain mixed with the MACD Line continues to tread below the Signal Line, while the RSI treads slightly above 50.

Company Brief

TIME dotCom Bhd’s 2QFY20 net profit fell 24.6% YoY to RM69.8m as the earnings were partially offset by a net loss on foreign exchange, a write-off of property, plant and equipment and an increase in staff-related costs. Revenue for the quarter, however, grew 9.7% YoY to RM304.8m. (The Star)

Berjaya Food Bhd’s 4QFY20 net loss stood at RM30.2m on top of revenue of RM111.6m. No comparison was made due to change in financial year end to 30th June 2020. (The star)

Bertam Alliance Bhd's indirect wholly-owned subsidiary MV Properties Sdn Bhd (MVSB) is being sued by the Inland Revenue Board (IRB) for RM17.7m in outstanding tax payments, inclusive of penalties for the assessment year 2017. Case management on the matter has been fixed on 4th September 2020. Bertam is in active discussion with IRB for a settlement proposal on the outstanding tax payable. (The Edge)

Careplus Group Bhd has proposed to acquire a piece of industrial land in Rembau, Negeri Sembilan for RM23.0m cash to expand its glove manufacturing facilities. The land, located 20 minutes from its current factory, is three times the size of the combined facilities of the entire Careplus Group. It plans to commence construction early 2021. (The Edge)

Dayang Enterprise Holdings Bhd’s 2QFY20 net loss stood at RM1.0m, vs. a net profit of RM55.1m recorded in the previous corresponding quarter, hit by lower activities and higher costs arising from the Movement Control Order and SOPs required during the COVID-19 pandemic. Revenue for the quarter fell 30.8% YoY to RM170.9m. (The Edge)

Fajarbaru Builder Group Bhd's wholly-owned subsidiary Fajarbaru Trading Sdn Bhd has today obtained a two-year moneylender licence from the Housing and Local Government Ministry. The license expires on 12th August 2022. (The Edge)

Kumpulan Powernet Bhd’s 4QFY20 net profit jumped 216.3% YoY to RM7.3m, boosted by contribution from its new construction-related activities segment. Revenue for the quarter soared 229.5% YoY to RM36.4m. (The Edge)

Panasonic Manufacturing (M) Bhd’s 1QFY21 net loss stood at RM2.6m vs. a net profit of RM30.3m recorded in the previous corresponding quarter, as it had to cease operations during the COVID-19 lockdown period. Revenue for the quarter fell 47.1% YoY to RM154.1m. (The Edge)

WCE Holdings Bhd’s 1QFY21 net loss widened to RM30.9m, from net loss of RM9.2m reported in the previous corresponding quarter as it recognised interest expense of RM40.3 m in respect of the financing costs for the West Coast Expressway. Revenue for the quarter fell 63.3% YoY to RM44.5m. (The Edge)

Wegmans Holdings Bhd has proposed a bonus issue of warrants on the basis of one free warrant for every four shares held, with an exercise price of 23.5 sen per share. As at 19th August 2020, the company’s issued share capital was at RM52.0m comprising 500.0m shares and 125.0m outstanding warrants expiring in 2022. (The Edge)

Yinson Holdings Bhd is upping its stake in India-based solar plant operator Rising

Sun Energy Pvt Ltd (RSE) by another 57.5% to a total of 95.0%, for INR1.10bn (RM61.4m) cash. RSE owns two operational solar power plants in Rajasthan. The acquisition will be financed through internally-generated funds. (The Edge)

Source: Mplus Research - 24 Aug 2020

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