At A Crossroad

• Tracking the upbeat sentiment on Wall Street overnight, the FBM KLCI (+1.7%) recovered all its’ previous session losses yesterday. Still, the key index marked its worst monthly decline since the global financial crisis in 2008, falling -8.9% M.o.M. The lower liners - the FBM Small Cap (+4.4%), FBM Fledgling (+2.5%) and FBM ACE (+5.2%), all powered sharply higher, while only the REIT sector (- 0.4%) underperformed the positive broader market.

• Market breadth turned positive as gainers thumped the losers on a ratio of 708-to-185 stocks. Traded volumes climbed 24.5% to 3.52 bln shares as investors make their way into the beaten down stocks.

• Anchoring the winners list on the FBM KLCI were Petronas Dagangan (+RM1.04), Nestle (+70.0 sen), KLK (+66.0 sen), Petronas Chemicals (+30.0 sen) and Sime Darby Plantations (+29.0 sen). Consumer products stocks like Dutch Lady (+RM1.26), Fraser & Neave (+50.0 sen), Panasonic (+40.0 sen) and Ajinomoto (+30.0 sen) advanced on the broader market, while Kumpulan Powernet jumped 30.0 sen after bagging a RM354.0 mln mini hydropower plants.

• Amongst the biggest decliners on the broader market were Chin Teck Plantations (-25.0 sen), New Hoong Fatt (-24.0 sen), Amverton (-18.0 sen), Sand Nisko Capital (-17.0 sen) and Shangri-La (-12.0 sen). Meanwhile, Maxis (-15.0 sen), Hong Leong Financial Group (-12.0 sen), RHB Bank (-10.0 sen), DIGI (-5.0 sen) and Hap Seng Consolidated (-3.0 sen) fell on the local bourse.

• Asia benchmark closed mostly higher as the Hang Seng Index and Shanghai Composite added 1.9% and 0.1% respectively - the latter was boosted by the NBS Manufacturing PMI data that jumped to 52.0 in March 2020 - the quickest expansion since September 207.The Nikkei (-0.9%), however, extended its’ losses on fears the Tokyo may go into a citywide lockdown. Asia stockmarkets, meanwhile, finished mostly higher yesterday.

• U.S. stockmarkets took another jab as the Dow slipped 1.8% following the unabated concern over the rising number of Covid-19 cases as the Dow recorded its worst quarter in history, sinking 23.2% Q.o.Q. On the broader market, the S&P 500 fell 1.6% with only the energy sector (+1.6%) outperformed, while the Nasdaq finished 1.0% lower.

• Major European stockmarkets - the FTSE (+2.0%), CAC (+0.4%) and DAX (+1.2%), all march higher, taking cue from gains in Asia equities following the buoyant China’s economic data. In the meantime, France’s inflation as measured by the consumer price index in March 2020 fell to its lowest level since 2016, rising only 0.7% Y.o.Y.

The Day Ahead

• It was a firmer performance delivered on the FBM KLCI yesterday as market sentiment were buoyed by U.S. potential breakthrough of a vaccine for Covid-19. At the same time, gains were also propelled by talks over a fourth round of stimulus from the world’s largest economy, whilst China’s surprising solid economic data also attributed gains across the region.

• Although the key index edged higher yesterday, we see volatility remains a feature following the slump on Wall Street overnight amid the lingering concern over the economic impact from Covid-19 outbreak. For now, we continue to see the 1,360 level serve as the key resistance, followed by the 1,400 psychological level. On the downside, the support is remained pegged at the 1,300 psychological level.

• We also see profit taking activities on the table as investors will be quick to offload their holdings, waiting for further stability. For now, we do think that a pullback will be a healthy move as the consolidation may allow fresh legs for further stride.

COMPANY BRIEF

• Kumpulan Powernet Bhd has accepted a letter of award from Kangsar Hidro Sdn Bhd for the supply of five mini hydropower plants in Perak valued at RM354.0 mln. Kangsar Hidro is a joint venture between Yayasan Perak and Kangsar Capital Sdn, a wholly owned subsidiary of OHP Ventures Sdn Bhd, which was established to undertake the development of the hydropower project.

• The target completion date of the works is 48 months from the commencement date of 24th December 2024, whichever is earlier. The award constitutes a recurrent related party transaction. Kumpulan Powernet deputy chairman and group managing director Mustakim Mat Nun and group CFO Amirul Afif Abd Aziz are deemed interested parties by virtue of their major shareholdings and positions on the board of OHP Ventures. (The Star)

• Minetech Resources Bhd has appointed Datuk Awang Daud Awang Putera as its new executive chairman, following some boardroom changes it announced on 31st March 2020. He is also a non-independent and nonexecutive director of Serba Dinamik Holdings Bhd, which he co-founded. He now owns 150.0 mln shares or a 4.9% stake in Minetech. (The Edge)

• IHH Healthcare Bhd co-led a minority investment in Singapore-based telehealth company Doctor Anywhere (DA), as part of DA’s US$27.0 mln (RM116.0 mln) Series B fundraising round to expand its platform and enter new markets in Southeast Asia. The investment is in line with IHH strategy to partner with innovative companies that deploy cutting-edge healthcare technology. (The Edge)

• The Employees Provident Fund (EPF) has raised its stake in YTL Corporation Bhd and its subsidiary YTL Power International Bhd. According to Bursa Malaysia filings, the provident fund now holds 659.1 mln shares or a 6.2% stake in YTL Corp and 399.5 mln shares or a 5.2% equity interest in YTL Power. While the EPF has been a substantial shareholder of YTL Corp for years, it emerged as a substantial shareholder of YTL Power in February 2018. (The Edge)

• Fraser & Neave Holdings Bhd (F&N) has been granted approval by the Ministry of International Trade and Industry (MITI) and the relevant local authorities to continue operating, albeit with a reduced workforce and operating hours during the Movement Control Order (MCO) period. (The Edge)  

Source: Mplus Research - 1 Apr 2020