Gaining Traction

• The FBM KLCI (+0.6%) advanced for the third straight session on the announcement of the relaxation measures for economic activities under the Phase 4 of Movement Control Order (MCO). Likewise, the lower liners - the FBM Small Cap (+2.4%), FBM Fledgling (+1.1%) and FBM ACE (+1.5%), all rebounded, while all 13 sectors on the broader market finished higher, led by the technology sector (+3.5%).

• Market breadth turned positive as gainers topped of the losers on a ratio of 629-to-249 stocks. Traded volumes, however, fell 3.9% to 4.83 bln shares but still remain above the historical oneyear average.

• More than two third of the key index components advanced led by Hong Leong Financial Group (+54.0 sen), followed by KLK (+34.0 sen), Genting Malaysia (+12.0 sen), IOI Corporation (+12.0 sen) and Genting (+10.0 sen). Major winners on the broader market were Ajinomoto (+46.0 sen), Carlsberg (+36.0 sen), Heineken (+34.0 sen) and BAT (+30.0 sen). Lotte Chemical added 5.0 sen despite reporting weak set of quarterly earnings

• On the flipside, Fraser & Neave (-50.0 sen), Hong Leong Industries (-11.0 sen), DKLS (-10.0 sen), Ibraco (-10.0 sen) and Country Height Holdings (-9.5 sen) fell on the broader market. A handful of decliners on the the FBM KLCI were MISC (-48.0 sen), Petronas Dagangan (- 6.0 sen), Hap Seng Consolidated (-5.0 sen), CIMB (-4.0 sen) and Petronas Gas (-2.0 sen).

• Asia benchmark indices closed higher as the Hang Seng Index rose 0.3%, while the Shanghai Composite (+0.4%) recovered all its’ previous session losses ahead of the U.S. Federal Reserve Monetary Policy statement. Japanese stockmarkets were closed for the Showa Day public holiday. Asia stockmarkets, meanwhile, ended mostly higher yesterday.

• U.S. stockmarkets advanced as the Dow jumped 2.2% after the U.S. Federal Reserve pledged to keep benchmark interest rates at zero level for as long as required for the economy to recover, coupled with positive developments from Gilead Sciences on the potential vaccine for Covid-19. On the broader market, the S&P 500 surged 2.7% led by the energy sector (+7.4%), while the Nasdaq rallied 3.6%.

• Earlier, European stockmarkets - the FTSE (+2.6%), CAC (+2.2%) and DAX (+2.6%), all rallied for the third straight session, taking cue from gains across global equities amid the positive developments from Gilead Sciences. This has also offset the sluggish Eurozone’s economic sentiment data that plunged to 67.0 in April 2020, from a downwardlyrevised 94.2 in March 2020.

THE DAY AHEAD

• Stocks across Bursa Malaysia were traded mostly higher following the announcement of easing restrictions on approved sectors to operate at full capacity. The gradual re-opening of economic activities bodes well to support the economic growth which bolsters investors’ confidence that the Movement Control Order (MCO) could come to an end on 12th May 2020 in Malaysia.

• With the rising possibility resumption of economic activities to normalcy, coupled with signs of positive developments surrounding the potential treatment for Covid-19, the FBM KLCI will continue to react positively on the news which the 1,400 level may again be re-tested over the near term. Beyond that, the next resistance is located at the 1,420 level. On the downside, the 1,360 and the 1,340 will serve as the support levels.

COMPANY BRIEF

• Lotte Chemical Titan Holding Bhd’s 1Q2020 net loss stood at RM170.1 mln vs. a net profit of RM55.8 mln recorded in the previous corresponding quarter due to margin compression and higher provision for the write down of inventory to net realisable value. Revenue for the quarter fell 32.7% Y.o.Y to RM1.46 bln. (The Star)

• Eversendai Corp Bhd via its subsidiary has undertaken to explore opportunities in the international construction market with Hyundai Engineering & Construction Co Ltd. Eversendai Offshore EMC FZW has entered into a memorandum of understanding (MoU) with Hyundai to explore the possibility of a global strategic partnership.

• In accordance with the terms of the MoU, the companies will introduce to each other construction projects related to engineering, procurement and construction (EPC) and investment opportunities that include plant module projects. (The Star)

• Sapura Energy Bhd's 4QFY20 net loss widened to RM4.23 bln, from a net loss of RM2.23 bln recorded in the previous corresponding quarter, as revenue fell and the oil and gas (O&G) support services firm made asset impairment provisions. Revenue for the quarter fell 25.5% Y.o.Y to RM1.11 bln.

• For FY20, cumulative net loss to RM4.56 bln, from net loss of RM2.71 bln registered in the previous financial year. Revenue for the year, however, rose 41.1% Y.o.Y to RM6.45 bln. (The Edge)

• Bina Puri Holdings Bhd has teamed up with Key Alliance Group Bhd to develop building information systems (BIS) for companies in the construction sector. The collaboration is in line with its move towards adoption of technology. (The Edge)

• Pensonic Holdings Bhd‘s 3QFY20 net profit stood at RM5.1 mln, against a net loss of RM1.0 recorded in the previous corresponding quarter, mainly due to gain from disposal of property, plant and equipment. Revenue for the quarter increased 3.7% Y.o.Y to RM69.4 mln.

• For 9MFY20, cumulative net profit stood at RM3.7 mln vs. a net loss of RM758,000 in the previous corresponding period. Revenue for the period, however, fell 8.3% Y.o.Y to RM217.7 mln. (The Edge)

• NetX Holdings Bhd is teaming up with Australian financial services provider Finexia Securities Ltd to introduce, promote and operate a point-to-point currency exchange digital platform that NetX developed, which comes with an inbuilt e-wallet function, in Australia.

• Under the agreement, Finexia Securities will have the exclusive right to use and operate the E-FX platform in Australia. In return, it will have to generate minimum revenue of A$4.0 mln (RM11.3 mln) over the next two years, A$1.0 mln in the first year and A$3.0 mln in the second year. Any profits generated from the spread of forex, remittance, investment and balance floats of the E-FX platform will be split on a 50-50 basis between E-FX and Finexia Securities. (The Edge)

• Unisem (M) Bhd’s 1Q2020 net loss stood at RM2.8 mln against a net profit of RM6.1 mln, no thanks to lower revenue, higher interest expenses, and as tax provisions more than tripled. Revenue for the quarter declined 9.8% Y.o.Y to RM273.4 mln. (The Edge)

• AirAsia Group Bhd resumes its scheduled domestic flights in Malaysia from 29th April 2020, which will be followed by Thailand on 30th April 2020, Indonesia on 7th May 2020 and the Philippines on 16th May 2020, subject to approval from the authorities. AirAsia and its long-haul arm AirAsia X Bhd grounded most of their fleet and suspended flights on 28th March 2020 as travel demand dropped because of the Covid-19 outbreak and cross-border travel restrictions.(The Edge)

• Malaysia Marine and Heavy Engineering Holdings Bhd’s (MHB) 1Q2020 net profit stood at RM6.1 mln, vs. a net loss of RM29.4 mln recorded in the previous corresponding quarter, boosted by the heavy engineering segment helped. Revenue for the quarter rose 70.6% Y.o.Y to RM346.4 mln. (The Edge)

• Eversendai Corp Bhd has inked a Memorandum of Understanding (MoU) with Hyundai Engineering & Construction Co Ltd as global strategic partners in modular construction work for the construction and energy industries. Eversendai and Hyundai will be collaborating to explore business opportunities in the international market, including delivering competitive proposals based on both companies’ joint expertise and experience. (The Edge)

Source: Mplus Research - 30 Apr 2020