Inching higher

Market Review

Malaysia: The FBM KLCI (+0.3%) extended its gains largely buoyed by the eleventh hour buying support in selected index heavyweights after trading in a choppy manner yesterday, but gains were limited by the concerns over the rising number of Covid-19 cases. The lower liners finished mostly higher, while the broader market ended on a mixed note.

Global markets: US stockmarkets started off the week on a buoyant tone as the Dow rose 0.6% to climb above the 26,000 psychological level led by gains in technology shares which in turn boosted the Nasdaq (+1.1%) to close at fresh all time high. European stockmarkets retreated, while Asia stockmarkets closed mixed after China kept the benchmark lending rate unchanged.

The Day Ahead

With the lingering concern over Covid-19, we think that the key index may continue to trade in a rangebound manner as demonstrated over the past two trading sessions. Nevertheless, gains on Wall Street coupled with the higher crude oil prices may continue to provide some support on the key index to march mildly higher.

Sector focus: We think that the oil & gas sector will continue to thrive amid the rising crude oil prices (currently Brent oil is trading near USD43) on the back of the recovering demand over the longer term.

It was another lacklustre performance on the key index that traded in a rangebound manner as the key index continues to hold above the daily EMA20 level. For now, we continue to observe the 1,500 psychological level and we reckon that any upsides are capped at the 1,550 for the time being. Downside risk remains pegged at 1,490, followed by 1,460. Indicators are mixed with the MACD Indicator turning lower, but remains above the zero level. Meanwhile the RSI remains above 50.

Company Brief

Datuk Ong Choo Meng, who first emerged as a substantial shareholder in Rubberex Corp (M) Bhd in late February 2020 is making a mandatory offer to take over the glovemaker at a steep discount to market price. Ong and his company Hextar Rubber Sdn Bhd is offering RM1.80 a share to buy-out minority shareholders in Rubberex. The unconditional mandatory takeover offer was triggered after Ong's stake in Rubberex was raised from 29.6% to 50.2% after acquiring an additional 57.2m shares (20.6% of Rubberex) at RM1.80 each from Seng Sheng Enterprise Sdn Bhd (SSESB), Datuk Chiau Beng Teik and Peh Lian Hua via direct deals. (The Star)

Techbond Group Bhd has been appointed as the exclusive distributor for a cleaning and disinfecting chemical product in Malaysia for general and industrial usage. Techbond has signed an exclusive distribution agreement with Calvatis Asia Pacific Co Ltd (Calvatis AP). Based in Thailand, Calvatis AP is part of Calvatis GmbH, one of the world's leading independent manufacturers of detergents and disinfectants headquartered in Germany. (The Edge)

YNH Property Bhd’s 1QFY20 net profit slipped 58.7% YoY to RM3.0m on slower project progress and impact on the group's hospitality arm as a result of the Covid- 19 pandemic. Revenue for the quarter shrank 11.0% YoY to RM66.6m. (The Edge)

Daibochi Bhd’s 3QFY20 net profit stood at RM10.8m on the back of revenue at RM152.0m. There were no comparison figures available due to a change in the group’s financial year end from 31st December to 31st July. (The Edge)

Bina Darulaman Bhd’s (BDB) 1QFY20 net profit stood at RM418,000 vs. a net loss RM5.9m on the back of higher sales to clear its existing stock as well as steady construction progress in its Bandar Darulaman and Bandar Sejahtera townships. Revenue for the quarter rose 17.6% YoY to RM46.2m. (The Edge)

Genting Malaysia Bhd (GenM), which lost at least RM160.0m a month during the MCO period plans to open its outdoor theme park which will be named "Genting SkyWorlds" in 2QFY21. Despite the called-off deal with “20th Century Fox”, GenM’s new outdoor theme park will still feature movies from the American film studio as well as other unnamed "international class" movie-themed attractions. (The Edge)

Tiong Nam Logistics Holdings Bhd’s 4QFY20 net loss narrowed to RM4.3m against a net loss of RM10.3m recorded in the previous corresponding quarter on improved utilisation of warehousing services and higher deliveries for essential products. Revenue for the quarter grew 3.7% YoY to RM141.6m. (The Edge)

Magni-Tech Industries Bhd’s 4QFY20 net profit rose 32.1% YoY to RM28.8m mainly due to higher sale orders and a positive forex impact. Revenue for the quarter grew 12.3% YoY to RM263.4m. (The Edge)

Bursa Malaysia Securities Bhd has issued an unusual market activity query to Supercomnet Technologies Bhd, as its share price jumped 36 sen or 29.0% yesterday. The gain pushed the share price to a fresh record high of RM1.60, making it the third biggest gainer among Bursa stocks. The counter’s trading volume surged to 37.5m shares, over 16.0x its 200-day average of 2.3m shares. (The Edge)

Source: Mplus Research - 23 Jun 2020