Powering Up

• Following the announcement of RM10.0 bln special stimulus package targeted for SMEs in Malaysia, the FBM KLCI (+0.8%) rebounded after recovering all its’ intraday losses on Monday. Likewise, the lower liners - the FBM Small Cap (+3.7%), FBM Fledgling (+2.9%) and FBM ACE (+4.0%), all march higher, while the plantation sector (-0.1%) underperformed the positive broader market on expectations over lower production.

• Market breadth turned positive as gainers overwhelmed the losers on a ratio of 738-to-183 stocks. Traded volumes rose 12.0% to 5.99 bln shares as investors turned risk-on mode amid the positive market sentiment.

• Anchoring the winners list on the FBM KLCI was Maybank (+25.0 sen), followed by Public Bank (+20.0 sen), Tenaga (+18.0 sen), Hartalega (+14.0 sen) and Genting (+13.0 sen). Consumer products stocks like Dutch Lady (+50.0 sen), Panasonic (+32.0 sen) and Heineken (+28.0 sen) advanced, while LPI Capital and United Plantations climbed 22.0 sen each.

• In contrast, Sungei Bagan Rubber (-15.0 sen), Rapid Synergy (-12.0 sen), Batu Kawan (-10.0 sen), Magna Prima (-8.0 sen) and Advanced Packaging (-7.0 sen) fell on the broader market. Key decliners on the local bourse include Petronas Dagangan (-40.0 sen), Sime Darby Plantations (-12.0 sen), Hap Seng Consolidated (-10.0 sen), Maxis (-7.0 sen) and KLK (-4.0 sen).

• Asia benchmark finished higher as the Nikkei jumped 4.2% after Japanese Prime Minister Shinzo Abe is preparing for a nationwide lockdown to contain the spread of Covid-19. The Hang Seng Index added 2.2%, while the Shanghai Composite was closed for the Qingming Festival public holiday. Asia stockmarkets, meanwhile, finished mostly higher on Monday.

• U.S. stockmarkets started off the week on a buoyant manner as the Dow jumped 7.7% on reports that the number of Covid- 19 cases in the U.S. has slowed that offset the slump in crude oil prices. On the broader market, the S&P 500 rallied 7.0% with all eleven major sectors on the rise, while the Nasdaq surged 7.3% higher.

• Major European stockmarkets - the FTSE (+3.1%), CAC (+4.6%) and DAX (+5.8%), all trended sharply higher amid signs of Covid-19 is spreading slower. Measures undertaken to contain the spread appears to bear fruit with Spain, Italy, France and Germany reporting falling death and infection rates at the weekend.

THE DAY AHEAD

• The local bourse delivered a strongerthan-expected performance yesterday as the key index march higher on the slowing number of Covid-19 cases, coupled with the additional stimulus measures from the government to cushion the slowdown in SME businesses. Likewise, other regions are also reporting slowing infection rates over the weekend, suggesting that the aforementioned virus infection might start to peak following more countries are adopting the lockdown measures.

• With market conditions starting to turn on a brighter mode, we reckon that the FBM KLCI may play catch up with gains across the board as the key index may likely to retest the 1,350 level. A breakthrough may see the key index poised for further recovery, targeting the 1,400 and 1,455 levels respectively. At the same time, the support is pegged at the 1,300 psychological level.

• The positive sentiment spilled over to the lower liners and broader market as investors resume their quest on bargain hunting on beaten down stocks. The move is largely evident on the recent spike in trading volumes that hit above the 5.00 bln mark as of late, suggest the return of appetite in riskier assets.

COMPANY BRIEF

• Majuperak Holdings Bhd's unit Majuperak Energy Resources Sdn Bhd is teaming up with United Solar Energy (Malaysia) Sdn Bhd to venture into the solar photovoltaic generating system project using the net energy metering scheme in Perak. Under the terms of the agreement, Majuperak Energy Resources will have a 40.0% equity interest and United Solar Energy 60.0%. (The Star)

• The government has revoked the permission given to Heineken M Bhd to operate during the Movement Control Order period, according to Federal Territories Minister Tan Sri Annuar Musa. This follows a statement by Heineken on April 5, saying that it has received approval from the government for the brewer to resume limited operations with a minimal number of essential workers in the period. (The Edge)

• Genting Singapore Plc’s Resorts World Sentosa (RWS) will be temporarily suspending all guest offerings including Universal Studios Singapore, SEA Aquarium, Adventure Cove Waterpark and Dolphin Island, and casino until 4th May 2020, in line with the Singapore government’s directives. Genting Singapore Ltd is a 52.7% subsidiary of Genting Bhd. Likewise, all operations at Resorts World Genting in Genting Highlands, Resorts World Casino New York City in the US and casinos in the UK and Resorts World Birmingham have been temporarily closed due to the outbreak of Covid-19 across the world. (The Edge)

• Permaju Industries Bhd is looking into bottling and distributing a Hong Kong firm’s sanitiser product for the Southeast Asian market. The product is one of the very few solutions in the world that have successfully been tested to work against the Covid-19. Its wholly-owned subsidiary Team Japs Sdn Bhd has entered into a collaboration agreement with Pentaweft Biotech Ltd to study the feasibility of making and distributing the product. (The Edge)

• Pintaras Jaya Bhd’s construction sites in Singapore will be temporarily closed, following the Singapore government’s announcement of the closure of all workplaces from 7th April 2020 to 4th May 2020, except for those in essential services, due to the Covid-19 outbreak. (The Edge)

• Private equity firm Creador Sdn Bhd is buying into GHL Systems Bhd and Uzma Bhd. Creador has deemed interest, had on 2nd April 2020 and 3rd April 2020, bought a total of 1.8 mln shares or 0.2% stake in GHL. It subsequently raised stake in the company to 12.8% or 96.1 mln shares. It has been accumulating shares in the payment service provider and merchant acquirer since the end of February 2020 after emerging as a substantial shareholder of GHL.

• Meanwhile, Creador’s founder and chief executive officer Brahmal Vasudevan had also emerged as a substantial shareholder of Uzma on 3rd April 2020, after acquiring some 1.0 mln shares or a 0.3% stake in Uzma via the open market. He owned a direct interest of 3.9% or 12.5 mln shares and indirect interest of 1.3% or 4.0 mln shares in the company and has emerged as its largest shareholder. (The Edge)

• BCM Alliance Bhd has provided 24 intensive care unit (ICU) beds to the Ministry of Health over the past two weeks. At the same time, healthcare products such as thermometers and nebulisers sold under 51.0%-owned subsidiary Cypress Medic Sdn Bhd had seen a spike in demand. these new product orders will enhance Cypress Medic’s revenue and consequently result in a higher top-line contribution at the group level for its financial year 2020. (The Edge)

Source: Mplus Research - 7 Apr 2020