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Author: MalaccaSecurities   |   Latest post: Fri, 18 Jun 2021, 10:03 AM


Mplus Market Pulse - 11 May 2021

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Market Review

Malaysia: The FBM KLCI (-0.2%) started off the holiday shortened week on a downbeat note, dragged down by weakness in gloves heavyweights yesterday. The lower liners retreated, while the Energy (+2.2%) and Plantation (+0.7%) sectors outperformed the negative broader market.

Global markets: The US stockmarkets retreated overnight as the Dow (-0.1%, snapping a five-day winning streak dragged down by renewed concern over the inflationary pressure following the higher commodity prices. European stockmarkets ended mixed, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI retreated yesterday after a two-session gain as investors stayed cautious sidelines of the release of Malaysia's 1Q21 GDP data today as well as trading activities were softer on the holiday-shortened trading week. Tracking the weakness from the Wall Street overnight, we expect market sentiment to remain weak following the announcement regarding the expansion of MCO 3.0 to the whole country starting from Wednesday. Meanwhile, the CPO future price contracted after registering a hefty rally recently.

Sector focus: Following the uptrend movement of commodities prices particularly CPO and oil prices, we believe energy and plantation counters may be put under traders’ radar over the near term. Also, some of the essential consumer stocks as well as lockdown beneficiaries such as plastic packaging industry may bode well throughout this period of time.

The FBM KLCI retreated after two sessions of gains with milder volume. Technical indicators remained mixed as the MACD Histogram has turned into a green bar, while the RSI was hovering below the 50 level. Should the key index set a further pullback, support is pegged around 1,555-1,565, while the resistance is set along 1,600-1,620.

Company Brief

Dayang Enterprise Holdings Bhd's wholly-owned subsidiary has received a contract from Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd for the provision of topside major maintenance services. The value of the contract is based on work orders issued by the Shell companies throughout the contract duration from 29th April 2021 to 19th Aug 2023. (The Star)

Boustead Holdings Bhd is unable to disclose further information about the Littoral Combat Ship project, following the government's announcement recently that the project will continue despite previous delays. Boustead will wait for official confirmation on the government’s approval, before disclosing any of its plans. (The Edge)

Gamuda Bhd has confirmed it is currently in talks with the government to put forth its proposal to sell its four highway concessions to a private highway trust. The group, however, denied that the enterprise value of the sale would be RM 5.20bn. It was responding to a query by Bursa Malaysia in relation to an article in this week's issue of The Edge Malaysia weekly, which stated that Gamuda had put forward a proposal to the government to sell the four highway concessions to a trust known as Amanah Lebuhraya Sdn Bhd. This trust will fund the acquisitions by raising money from bond investors with a promised annual return of 4.0-5.0%, backed by cash flows from the tolls without any need for government guarantees. (The Edge)

Astino Bhd has proposed a bonus issue of 219.3m shares on the basis of four bonus shares for every five shares held. The exercise will increase the group’s share base to 493.4m shares, while the share capital will remain unchanged at RM138.3m. (The Edge)

Eastern & Oriental Bhd (E&O) has announced that Tan Sri Mohd Bakke Salleh has resigned as non-independent and non-executive director of the group. Bakke's resignation, effective immediately, was due to the cessation of Sime Darby Bhd as a major shareholder of the company. (The Edge)

EcoFirst Consolidated Bhd has proposed a bonus issue of up to 443.8m warrants, on the basis of one warrant for every two existing EcoFirst shares. The assumed conversion price of 40 sen apiece is a 2.1% premium to the five-day volume weighted average market price of EcoFirst shares up to 7th May 2021 of 39.2 sen. (The Edge)

Privasia Technology Bhd has roped in the former CEO of the Malaysian Investment Development Authority (MIDA), Datuk Azman Mahmud, as its independent and nonexecutive director. The company also appointed Rachel Lau Jean Mei and Leong Kah Chern as independent and non-executive directors. (The Edge)

Source: Mplus Research - 11 May 2021

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