Marching On

• The FBM KLCI (+1.2%) trended higher alongside with gains across regional stockmarkets following the recovery in crude oil prices. The lower liners - the FBM Small Cap (+2.4%), FBM Fledgling (+1.7%) and FBM ACE (+6.5%), all rebounded sharply higher, while the broader market finished on a positive note, led by the industrial products & services sector (+3.7%).

• Market breadth turned positive as gainers outnumbered the losers on a ratio of 7-to-2 stocks. Traded volumes jumped 53.6% to 4.79 bln shares driven by the positive market sentiment.

• Anchoring the FBM KLCI winners list were Nestle (+RM2.20), followed by Malaysia Airport Holdings (+50.0 sen), Petronas Chemicals (+35.0 sen), PPB Group (+18.0 sen) and Hong Leong Bank (+18.0 sen). Amongst the biggest gainers on the broader market were consumer products stocks like Carlsberg (+RM1.82), Heineken (+RM1.34), Dutch Lady (+52.0 sen) and Panasonic (+52.0 sen), while Allianz added 64.0 sen.

• On the other side of the trade, Malpac Holdings (-13.0 sen), Subur Tiasa (-8.0 sen), Vitrox (-7.0 sen), Gas Malaysia (- 6.0 sen) and Kuchai Development (-6.0 sen) fell on the broader market. There was only a handful of decliners on the FBM KLCI, namely Maxis, (-5.0 sen), Hong Leong Financial Group (-2.0 sen), IHH (-2.0 sen), IOI Corporation (-1.0 sen) and Sime Darby (-1.0 sen).

• Asia benchmark indices rallied as the Nikkei (+3.1%) recovered all its’ previous session losses. Likewise, the Shanghai Composite (+1.4%) rebounded on the stronger-than-expected dollar denominated exports data that fell -6.6% Y.o.Y in March 2020, against economists’ expectations of -14.0% Y.o.Y slump, while the Hang Seng Index (+0.6%) resumed trading in an upbeat manner. Asia stockmarkets, meanwhile, closed mostly higher on Tuesday.

• U.S. stockmarkets rallied as the Dow jumped 2.4% on a slew of stronger-thanexpected corporate earnings, coupled with certain economies would ease strict Covid-19-induced lockdowns. On the broader market, the S&P 500 surged 3.1% with only the energy sector (-0.5%) in the red, while the Nasdaq (+4.0%) rallied to extend its’ gains.

• Earlier, major European stockmarkets closed mostly higher as the CAC and DAX added 0.4% and 1.3% respectively as the number of new Covid-19 cases appears to have peaked in the Eurozone and the U.K. The FTSE, however, slipped 0.9% after erasing all its’ intraday gains on speculations that the lockdown may extend into next month.

The Day Ahead

• The stronger-than-expected economic data from China powered global equities higher as investors reassess the impact stemmed from Covid-19 pandemic. At current juncture, it appears that the impact is less severe than anticipated as markets cheered on. However, many countries has only started to adopt the nationwide lockdown or social distancing towards late March or early April and this may result in weakness to deepen for April 2020 data.

• Amid the calmer market conditions, we reckon that the optimism stemmed by the gradual re-opening of economic activities may continue to provide further room for a recovery. Should there be follow-through buying interest beyond the 1,370 level breakthrough on the FBM KLCI, we reckon that the 1,400 will serve as the immediate resistance. At the same time, the immediate support is pegged at the 1,340 level, followed by the 1,320 level.

• The lower liners and broader market shares also trended unexpectedly higher as investors were quick to bargain hunt from the recent pullback. For now, the rotational play is expected to prolong with the surge in trading volume, probably till the end of the month ahead of the upcoming quarterly earnings results reports.

COMPANY BRIEF

• Solarvest Holdings Bhd has secured two new contracts in the Philippines, involving engineering, procurement, construction and commissioning works, from Vivant Energy Corporation. This marks its first venture into the Philippines. (The Edge)

• Nak Beli, an e-commerce marketplace powered by MyEG Services Bhd, is introducing a new food service platform called Nak Makan to sell freshly cooked meals and food products online. The platform will initiate three phases that will address different elements of the fasting month and subsequent Eid festivities. (The Edge)

• mTouche Technology Bhd appears to have jumped onto the medical equipment supply bandwagon after partnering with Network Global Solutions Pty Ltd (NGS), a products and components sourcing company, to supply Covid-19 test kits. Its whollyowned unit, mTouche International Sdn Bhd, has inked a supply agreement with NGS to distribute medical equipment in Malaysia and Southeast Asia. (The Edge)

• AHB Bhd’s application to extend the time to complete its private placement by six months has been approved by Bursa Malaysia. The new completion date is 4th November 2020. The placement comprises 52.8 mln shares, representing 30.0% of the group’s issued shares.

• This is the second extension given to the group in relation to its private placement exercise. On 15th January 2020, it received approval to extend the completion date to 31st July 2020, from 1st February 2020, in relation to 17.6 mln new shares or 10.0% of the group’s total share capital. (The Edge)

• Konsortium Transnasional Bhd (KTB) has been classified as an affected issuer under Practice Note 17 (PN17), after its auditors highlighted a material uncertainty in the company’s ability to continue as a going concern in its audited financial statements for the financial year ended 31st December 2018. (The Edge)  

Source: Mplus Research - 15 Apr 2020