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Author: MalaccaSecurities   |   Latest post: Wed, 4 Aug 2021, 9:49 AM


Mplus Market Pulse - 22 Apr 2021

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Dampened by rising Covid-19 cases 

Market Review

Malaysia: The FBM KLCI (-0.7%) erased all its previous session gains after hovering in the negative territory for the entire trading session with more than twothird of the key index components closed in the red. The lower liners ended mostly higher, while the Healthcare (+0.9%) and Transportation & Logistics (+0.1%) sector outperformed the negative broader market.

Global markets: The US stockmarkets recovered all their previous session losses as the Dow climbed 0.9% as investors’ attention shifted to the economic recovery progress amid the flurry of corporate earnings releases. European stockmarkets rebounded, but Asia stockmarkets ended in the red.

The Day Ahead

The FBM KLCI mirrored the regional weakness to dip below the 1,600 level, but the glove counters finished in the positive region following the release of Kossan’s remarkable results, bucking the market downtrend. However, the sector may see some pullback due to concerns over glove’s ASP on the back of the ongoing Covid- 19 vaccination programme. Meanwhile, the CPO prices continue to hover near the RM4,000 level, but positive impact was not reflected on the plantation counters. Tracking the overnight gains on Wall Street, the local bourse may see some mild rebound.

Sector focus: We expect the local bourse may take cue from the rise in Nasdaq overnight and put the technology sector on radar. Besides, we believe the plantation counters may see some improvement following the firmer CPO prices.

The FBM KLCI retreated to close below the 1,600 level due to mounting concerns over the rising Covid-19 confirmed cases. Technical indicators turned mixed as the MACD Histogram has turned into a red bar, while the RSI was hovering above the 50 level. We expect the key index to move within the resistance envisaged along 1,615-1,635, and the support set at 1,545-1,565.

Company Brief

Tasco Bhd has reported that its subsidiary is buying a 50.0% stake in a cold chain logistics company in Kota Kinabalu, Sabah for RM10.6m cash. Tasco's 70% owned Tasco Yusen Gold Cold Sdn Bhd (TYGC) has entered into a deal to acquire 50.0% stake in Hypercold Logistics Sdn Bhd. Hypercold has the largest cold chain warehouse capacity of 3,000 pallet space as well as 8 temperature- controlled trucks in Sabah. (The Star)

Widad Group Bhd's wholly-owned subsidiary Widad Builders Sdn Bhd has secured a contract worth RM89.8m from the Kedah government to upgrade the Sungai Limau water treatment plant in Baling. The contract commences from 2nd May 2021 to 28th October 2023. (The Star)

TH Heavy Engineering Bhd (THHE) is buying out its 51.0% partner Destini Bhd's stake in a ship building company, THHE Destini Sdn Bhd (TDSB) for RM121,131. THHE currently owns 49.0% of TDSB. (The Star)

Techna-X Bhd subsidiary in Hong Kong has entered into a joint venture agreement with several Croatian partners to develop technology for electric vehicle and low voltage drive system. HK Aerospace Beidou New Energy Industry Technology Co Ltd, in which TXB has a 50.0% stake, will invest €1.0m (RM4.9m) for a 51.0% stake in the joint venture company. The JVC will develop electric mobility solutions with the goal to become the European hub for new EV technologies. (The Star)

Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) has disclosed that the value for the engineering, procurement, construction, transportation and installation, and hook-up and commissioning services (EPCIC) contract secured from SapuraOMV Upstream (Sarawak) Inc is RM1.00bn. The duration of the contract in the Jerun gas field, which lies in the SK408W block off the coast of Bintulu, is 40 months. (The Edge)

Axis Real Estate Investment Trust’s (Axis REIT) 1QFY21 net property income (NPI) grew 3.3% YoY to RM49.8m, mainly to rental from newly acquired properties. Revenue for the quarter increased 4.9% YoY to RM57.5m. An interim distribution per unit of 2.23 sen was declared. (The Edge)

Luxchem Corp Bhd's 1QFY21 net profit jumped 105.8% YoY to RM20.6m, mainly due to higher sales from trading and manufacturing segments. Revenue for the quarter rose 30.6% YoY to RM227.9m. A single-tier interim dividend of 0.9 sen per share, payable on 3rd June 2021 was declared. (The Edge)

BIMB Holdings Bhd, which owns Bank Islam Malaysia Bhd, is targeting to offer shariah-based financial solutions as well as environmental, social and governance (ESG) or Syariah-ESG products by 2025, based on its five-year post restructuring plan. Bank Islam will not apply for a digital banking licence as it has established a dedicated division to design and build its digital-only proposition. (The Edge)

Telekom Malaysia Bhd (TM) is partnering Madrid-headquartered Telefónica Tech to strengthen its digital infrastructure solutions, which would enable TM ONE to offer global cybersecurity solutions for the Malaysian enterprise and public sector. Under the agreement, Telefónica Tech will provide consultancy to support and build a holistic cybersecurity programme for the development of the TM ONE Global Cyber Security Operations Centre, which includes training in cybersecurity services to increase the digital intelligence and skillset of its local workforce. (The Edge)

Malayan Banking Bhd's (Maybank) foreign shareholding has dropped to 16.6% as of 9th April 2021, from 16.7% as of 19th March 2021. Meanwhile, CIMB Group Holdings Bhd has announced that foreign shareholding had increased to 20.7% as of March 2021 from 20.6% as of February 2021. On the other hand, Hong Leong Bank Bhd’s (HLB) foreign shareholding rose to 10.1% as at 31st March 2021, from 10.0% recorded as at 31st December 2020. (The Edge)

Source: Mplus Research - 22 Apr 2021

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