Stabilising Ensured

• The FBM KLCI opened sharply lower before bargain hunting activities shored the key index into the positive territory to close 0.01% higher yesterday. The lower liners – the FBM Small Cap (+0.9%), FBM Fledgling (+0.8%) and FBM ACE (+0.9%) also ended in the positive territory, while broader market closed on a mixed note.

• Market breadth turned positive as gainers outnumbered the losers on a ratio of 458-to-378 stocks. Traded volumes, however, fell 22.0% to 5.10 bln shares on the back of the uncertain market condition.

• Anchoring the winners list on the FBM KLCI were Petronas Dagangan (+60.0 sen), Top Glove (+35.0 sen), Hartalega (+32.0 sen), Petronas Chemicals (+9.0 sen) and Genting (+8.0 sen). Significant gainers on the broader market include Carlsberg (+96.0 sen), Heineken (+68.0 sen), SAM Engineering & Equipment (+14.0 sen), Supermax (+14.0 sen) and KLCC (+13.0 sen).

• In contrast, Fraser & Neave (-RM1.02), United Plantations (-54.0 sen), Hong Leong Industries (-23.0 sen), Dutch Lady (-22.0 sen) and Kluang Rubber (-20.0 sen) declined on the broader market. Big board losers Wednesday include Nestle (-50.0 sen), PPB Group (-38.0 sen), Hong Leong Financial Group (-26.0 sen) and IOI Corporation (-8.0 sen). CIMB Group slipped 12.0 sen on concern over exposure to Singapore’s Hin Leong Trading Pte Ltd.

• Asia benchmark indices finished mostly higher as Hang Seng Index climbed 0.4%, while the Shanghai Composite rose 0.6% on bargain hunting activities. The Nikkei (-0.7%), however, remain in the red for the third straight session on speculations that Bank of Japan may downgrade their economy outlook in the upcoming monetary policy meeting next week. Asia stockmarkets, meanwhile, ended mostly higher on yesterday’s close.

• U.S. stockmarkets rebounded from a twoday pullback as the Dow jumped 2.0% higher on the back of stabilising crude oil prices, coupled with the stronger-thanexpected string of corporate earnings. On the broader market, the S&P 500 (+2.3%) also advanced tumbled with all eleven major sectors in the positive, while the finished 2.8% higher.

• Earlier, European stockmarkets - the FTSE (+2.3%), CAC (+1.3%) and DAX (+1.6%), all recovered some of their previous session losses, taking cue from gains across global equities. Notable advancers were oil & gas companies like BP PLC (+6.0%) and Royal Dutch Shell PLC (+5.7%) as Brent oil prices bounced from their lowest level since 1999.

THE DAY AHEAD

• Even with the continuing cautiousness, the key index managed to stage a decent recovery to erased all of its’ intraday losses yesterday. The knee jerk pullback from the slumping crude oil prices over the past two days helped markets to adjust from their overbought positions as mild bargain hunting activities came to the fore with the help of the stabilising crude oil prices.

• We see the recovery continuing to allow the key index march higher over the near term. As it is, the market undertones of global indices are showing signs of stabilisation that will also extend to Malaysian equities. Consequently, we view the 1,400 psychological level as the immediate hurdle, followed by the 1,420 level. The supports, meanwhile, are at 1,370 and 1,340 levels respectively.

• The lower liners and broader market shares should also be heading higher in tandem with the improved market sentiments. This could entice more retail players to undertake bargain hunting activities, but there could also be quick profit taking actions as the general market undertone is still cautious amid the prospects of lower global economic outlook for the rest of the year.

COMPANY BRIEF

• Heitech Padu Bhd has secured a RM19.9 mln contract awarded by the National Registration Department. Under contract, HeiTech Padu will supply, deliver, install, test, integrate and commission hardware and software upgrade the department's core business application. The contract period was 24 months, starting from 1st May 2020. (The Star)
   
• Ageson Bhd has reported that a company based in Hong Kong is planning to buy natural sand from its wholly owned unit Esa Pile Sdn Bhd. Esa Pile had received a letter of intent from Boyijun Resources (HK) Ltd to to purchase sand for a contract value of US$26.6 mln (RM116.8 mln). A trial shipment is expected to start next month. (The Star)
   
• Sime Darby Bhd has inked a deal to sell its 30.0% stake in Tesco Stores (M) Sdn Bhd for RM300.0 mln. The deal is estimated to provide Sime Darby with a net disposal gain of RM270.0 mln. The disposal is part of a larger deal between Tesco Plc and Thailand’s CP Group signed in March to sell Tesco’s businesses in Thailand and Malaysia to CP for an enterprise value of US$10.60 bln. (The Edge)

• YTL Corp Bhd’s indirect subsidiary YTL Starhill Global REIT Management Ltd, the manager of Singapore-listed Starhill Global Real Estate Investment Trust (Starhill Global REIT), has requested S&P Global Ratings to withdraw its corporate credit rating on the REIT and notes issued under the property trust’s medium-term notes programmes. The REIT, however, did not specify the reasons for its request for S&P to withdraw its corporate credit rating on Starhill Global REIT. (The Edge)

• Minetech Resources Bhd's unit Minetech Construction Sdn Bhd (MCSB) has received a letter of intent from Bumimaju MTE Engineering Sdn Bhd to appoint MCSB as a contractor to undertake a civil works project that is related to a pipeline laying project in Hulu Grik, Perak. However, the monetary value of the contract was not disclosed. (The Edge)

• CSC Steel Holdings Bhd (CHB) is disposing of its entire 6.0% shareholding in CSGT Metals Vietnam Joint Stock Company for US$1.2 mln (RM5.3 mln), as it has not been able to secure a commanding share of the Vietnam steel market. (The Edge)

• MCE Holdings Bhd is teaming up with Taiwan-based Juoku Technology Co Ltd to develop, produce and supply automotive lighting parts in Malaysia. The automotive parts include fog lamps, daytime running lamps, brake lamps and other lamps that the two companies agree on. Juoku is a manufacturer of lighting systems and plastic moulding parts for the automotive industry. (The Edge)

• Nexgram Holdings Bhd’s unit Nexgram Industries Sdn Bhd (NISB) has entered into a deal to sell medical ventilators to an Indonesian firm, PT Rafa Topaz Utama, for distribution in East Jakarta and certain other parts of Southeast Asia. (The Edge)

• Kiplepay Sdn Bhd, a unit of Green Packet Bhd recently teamed up with the Coalition of Malay Small Traders Association (GPPPKMM) to launch a ‘Warong Digital e-Bazaar Ramadan’ programme. The programme uses Kiplepay’s e-wallet, which allows local traders to conduct online transactions and provides a cashless experience for customers

• Launched on 16th April 2020, the ‘Warong Digital e-Bazaar Ramadan’ programme is meant to enable small traders and local hawkers to operate their businesses online throughout the month of Ramadan, which is expected to begin on 24th April 2020. (The Edge)

• IGB Real Estate Investment Trust’s 1Q2020 net property income (NPI) fell 14.6% Y.o.Y to RM88.4 mln due to the rental support provided to tenants, and lower car park income, arising from the Covid-19 pandemic and Movement Control Order (MCO) since mid-March 2020. Revenue for the quarter dropped 11.5% Y.o.Y to RM125.0 mln. (The Edge)

Source: Mplus Research - 23 Apr 2020