Still on the move 

Market Review

Malaysia: The FBM KLCI (+1.1%) remained victorious for the fifth straight session with the glove heavyweights continue to take the lead while selected banking heavyweights playing catch-up. Consequently, the FBM KLCI gained 4.3% WoW, snapping three consecutive weeks of decline. The lower liners also marched higher, while the plantation sector (-0.2%) was the sole underperformer on the broader market after CPO prices retreated.

Global markets: US stockmarkets were closed for the Independence Day public holiday on last Friday. European stockmarkets ended lower on concern over the resurgence of high Covid-19 cases, but Asia equities extended their gains after China’s Caixin/Markit services Purchasing Manager’s Index (PMI) came at 58.4 in June 2020; the highest since April 2010.

The Day Ahead

After five consecutive days of winning streak, we think that upsides are still on the cards but will be restrained by the Covid-19 situation across the globe. Although the global economic recovery came in better-than-anticipated, investors will now shift their attention to the upcoming batch of corporate earnings in US to assess the impact of Covid-19.

Sector focus: With the rising number of Covid-19 cases, the healthcare sector may continue its upward trajectory run, while we also continue to favour the technology stocks on the back of the upcoming 5G implementation, production returning to normalcy to keep up with backlog orders and increasing adoption of automation.

The FBM KLCI gapped up and lingered in the positive territory throughout the entire trading session as the key index recorded its first weekly gain in four weeks, forming a flag-formation breakout. The move may prompt further gains towards the 1,580 and 1,590 resistances. Support is now pegged at 1,510 followed by 1,500. Indicators are still slightly positive as the MACD Line is attempting to rise above the Signal Line, while the RSI is approaching the overbought territory.

Company Brief

Anzo Holding Bhd (Anzo) has purchased assets from Wintrade World Sdn Bhd worth RM55.0m, comprised land, buildings, machinery, equipment and motor vehicles. The assets are ready to be mobilised and commissioned to produce approximately 100.0m pieces of medical and/or nitrile gloves per month. (Bernama)

Ikhmas Jaya Group Bhd’s subsidiary Ikhmas Jaya Sdn Bhd (IJSB) has been slapped with a lawsuit over an unpaid debt of RM2.7m involving tools and equipment supplied by Choo Seng Hardware Co (Ipoh) Sdn Bhd. Separately, IJSB also received a winding-up petition over an alleged non-payment of RM268,011 arising from an engineering job subcontracted to Yee Loong Engineering Sdn Bhd. (The Edge)

Sino Hua-An International Bhd is acquiring Hong Kong’s Internet of things (IoT) firm HK Aerospace for US$35.0m (RM150.1 m) to strengthen the former’s digital transformation and digital ecosystem solutions. Upon completion of the acquisition, HK Aerospace will become a wholly-owned subsidiary of Sino Hua-An. (The Edge)

Boustead Holdings Bhd’s subsidiary Boustead Naval Shipyard Sdn Bhd (BNS) has been served with a winding-up petition over an alleged debt of RM56.0m. The petition was filed by MTU Services (Malaysia) Sdn Bhd which claimed that BNS is indebted to the former for the equipment supplied and services provided to BNS. (The Edge)

MMAG Holdings Bhd executive chairman Datuk Khan Mohd Akram Khan has resigned from the post, effective 3rd July 2020 after disposing of his shareholding in the firm. Two days ago, Khan disposed of his entire indirect interest of 102.0m shares, representing a 10.1% stake, in the information and communications technology (ICT) firm at 30 sen per share. (The Edge)

Dialog Group Bhd is pumping another RM100.0m into its Johor-based Dialog Terminals Langsat facility, which will enable it to store a further 85,000 cubic metres (m3) of clean petroleum products. The plant currently has an operating capacity of 770,000m3, which has been fully leased out. (The Edge)

Jerasia Capital Bhd is venturing into the healthcare industry by using its production lines to produce personal protection equipment (PPE) for both local and export markets. Its units Canteran Apparel Sdn Bhd and Canteran Apparel (Cambodia) Co Ltd have expanded their product portfolios, and are now developing, producing and supplying PPE products that include non-woven isolation gowns, head covers, shoe covers, cloth face coverings and other related PPE garments. (The Edge)

Malayan United Industries Bhd (MUI) unit had agreed to sell a freehold retail space in Penang at below the market value to conclude negotiations quickly given current economic uncertainties. The RM3.0m discount was also a gesture of goodwill to the purchaser, which had been a tenant of the property since 2010, in response to a query from Bursa Malaysia on the discounted price. (The Edge)

Source: Mplus Research - 6 Jul 2020