Market Review

Malaysia: The FBM KLCI (+0.2%) rebound from the previous session slump on the back of gains from glove makers heavyweights while the rebound was also in tandem with the positive performance across regional peers. Albeit that, the initial volatility throughout the week sent the key index to extend its weekly losses by 2.5% WoW. Amid the mixed broader market, the lower liners, all, rebounded.

Global markets: US stockmarkets erased all their intraday gains to trend lower on last Friday as the Dow fell 0.8% after Apple Inc. (-0.6%) will re-close some of the stores in widespread states in US due to the rising counts of Covid-19. European equities ended higher, while Asia stockmarkets also closed mostly higher on signs of easing tension between US and China.

The Day Ahead

We think that choppiness prevails while investors nibble on beaten down stocks while the firmer commodity price (both the crude oil and crude palm oil) may provide cushion for the recent volatility. At the same time, we continue to think that a recovery may not be prevalent as investors may take the opportunity to lock in quick gains amid the lingering concern over rising Covid-19 cases.

Sector focus: We reckon that the additional RM942.0m in discounts and rebates for domestic users' electricity bills under the Bantuan Prihatin Elektrik Tambahan may propel consumer staples stocks on the back of higher disposable income, while the RM46.0bn Penang Transport Master Plan (PTMP) that was given the green light by authorities may power the construction sector and selected property developers that has strong presence in Penang.

FBMKLCI Technical Outlook

Following the mild gains, the key retained its position above the daily EMA20 level. Should the 1,500 psychological level continues to hold, we reckon that the recovery will power the key index towards the upper band of the consolidation zone with immediate resistance at 1,550. On the flipside, the immediate support remains pegged at 1,490, followed by 1,460. MACD Indicator turning lower, but remains above the zero level, while the RSI remains above 50; suggesting mixed tone.

Company Brief

UEM Sunrise Bhd’s 1QFY20 net loss stood at RM22.0m vs. a net profit of RM30.1m recorded in the previous corresponding quarter as most of its projects last year were launched in 2HFY19 and on-going projects are at the early stages of construction progress during the period under review. Revenue for the quarter slipped 53.2% YoY to RM196.0m. (The Star)

FGV Holdings Bhd board of directors have unanimously agreed to take a fee cut of 20.0%, effective from July 2020 until December 2020. After December 2020, the board will review the global and domestic economic situations before making a decision on next year’s fees. Additionally, FGV’s employees in senior management, ranked general manager and above, will take two days of mandatory no pay leave and a 20% reduction in their car allowance in the same period. (The Sun)

Boustead Holdings Bhd’s 1QFY20 net loss widened to RM73.1m, from net loss of RM22.4m in the previous corresponding quarter on weaker performances across all its divisions except pharmaceutical and plantation. Revenue for the quarter dropped 9.8% YoY to RM2.26bn. (The Edge)

OCR Group Bhd’s 40%-owned associate company Landasan Surimas Sdn Bhd has inked an agreement with Perbadanan Kemajuan Negeri Pahang to set up a 70:30 joint venture named Taraf Raya to provide mechanical and civil works relating to the East Coast Rail Link (ECRL) project within Pahang. OCR has also been appointed by Yayasan Pahang to undertake a project management consultation role, which entails overseeing Yayasan Pahang’s affordable housing scheme in the state, encompassing over 25,000 residential units over the next 15 years. (The Edge)

GDB Holdings Bhd's 1QFY20 net profit fell 18.7% YoY to RM5.7m due to higher profit recognition from completed projects in the preceding financial period, lower interest income, and higher administrative and other expenses incurred. Revenue for the quarter, however, rose 54.2% YoY to RM99.9m. (The Edge)

Vsolar Group Bhd has roped in Lambo Group Bhd executive director Koo Kien Yoon as the group’s new executive director. Koo, 43, replaces Leung Kok Keong who relinquished the position on 19th June 2020 due to personal commitments. Koo has 22 years of extensive and varied working experience in public relations and managing business activity. (The Edge)

Ranhill Utilities Bhd has proposed a secondary listing on the Main Board of the Singapore Exchange. The exercise will allow the group, formerly known as Ranhill Holdings Bhd, to access additional platforms for future fundraising to finance the company's regional expansion. (The Edge)

Muar Ban Lee Group Bhd (MBL) has emerged as a new substantial shareholder of Federal International Holdings Bhd, after the plantation firm bought a 5.1% stake. MBL’s stake in Federal International with the purchase of 247,800 shares on 17th June 2020. It is learnt that MBL intends to hold more than a 20% stake in the furniture manufacturing-cum-construction company. (The Edge)

Permaju Industries Bhd’s 3QFY20 net loss stood at RM2.2m on revenue of RM14.3m, dragged by lower sales in its automotive division. There were no comparative numbers due to a change in its financial year end from 31st December to 30th June. (The Edge)

Source: Mplus Research - 22 Jun 2020