Market Review

Malaysia: The FBM KLCI (-0.2%) edged lower after a choppy trading session amid UK’s approval on Pfizer-BioNTech Covid-19 vaccine, as investors weighed weaker manufacturing data and lower crude oil prices. The lower liners finished mixed, while the broader markets ended mostly higher, with technology and energy sectors being the top gainer and decliner respectively.

Global markets: US stocks finished modestly positive as the Dow (+0.2%) and S&P500 (+0.2%) inched up on investors’ hope for another round of fiscal stimulus, but Nasdaq (-0.1) edged lower. European stockmarkets finished mixed while Asia stockmarkets mostly in the red.

The Day Ahead

The FBM KLCI closed mildly lower as sentiment turned downbeat as investors booked in gains from the previous session’s rally. While the local bourse is demonstrating some mild weakness, we reckon that the general recovery trend is still intact as the attention remains focus on the pace of economic recovery. The positive development over the Covid-19 vaccine will also continue to aid the recovery progress. Meanwhile, the lower liners are expected to charge higher, driven by the ample liquidity with the equities market remain in favour.

Sector focus: The energy sector is poised for a recovery after crude oil prices snapped a 3-day pullback amid the unexpected decline in US inventory ahead of the OPEC meeting today. Meanwhile, the technology sector may garner further trading interests following the strong 3Q2020 semiconductor equipment billings.

FBMKLCI Technical Outlook

Despite recovering most of its intraday losses, the FBM KLCI ended mildly lower as key index maintained its position above the daily EMA9 level. With the recovery trend remains largely in place, we think that further upsides are still on the cards towards the next resistance at 1,615, followed by 1,640. Meanwhile, the supports are at 1,580, followed by 1,560. Indicators have turned mixed as the MACD Histogram has turned red, while the RSI remains above 50.

Company Brief

Ranhill Utilities Bhd has been invited by Prokhas — a wholly-owned private limited company under the Minister of Finance Inc (MoF Inc) to undertake a due diligence exercise on Indah Water Konsortium Sdn Bhd (IWK) in relation to a proposed disposal of MoF Inc's interest in IWK, after submitting a proposal for a restructuring of IWK that would involve the disposal of MoF Inc's interest in IWK to Ranhill on 26th June 2020. This will enable the company to access information necessary for it to finalise the said proposal. (The Star)

Sunsuria Bhd's 4QFY20 net profit fell 52.3% YoY to RM9.2m, on the weaker topline contribution. Revenue for the quarter decreased 41.5% YoY to RM61.3m. (The Edge)

Datuk Wong Gian Kui has resigned as Yi-Lai Bhd's independent non-executive chairman, due to personal commitment. (The Edge)

Bioalpha Holdings Bhd has been appointed by Hong Kong-listed Ritamix Global Ltd as a contract manufacturer to make and supply a longevity dietary supplement. The Group is expecting multi-millions of orders from Ritamix for the Malaysia and China markets. The supplement product contains the nicotinamide mononucleotide (NMN) compound that can help restore energy and reduce typical signs of ageing such as gradual weight gain. It expects NMN products to deliver a gross profit margin of 50.0% based on the selling price to Ritamix. (The Edge)

Chin Hin Group Property Bhd plans to purchase a 1.38-ha piece of land in Bandar Kinrara, Puchong for RM59.8m from Perumahan Kinrara Bhd (PKB). PKB is a unit of I&P Group Sdn Bhd, which in turn is a wholly-owned subsidiary of S P Setia Bhd. It will seek the approval of the Economic Planning Unit to purchase the land within 60 days from the date of signing of the sale and purchase agreement. (The Edge)

AWC Bhd and its partners have bagged a RM20.9m subcontract relating to a water treatment plant in Jasin, Melaka. Its unit DD Techniche Sdn Bhd and joint venture partners Techkem Utilities Sdn Bhd and Techkem Resources Sdn Bhd were awarded the job by Aliran Intelek Sdn Bhd. The subcontract entails engineering, supply, construction and all related works for the implementation of the water treatment plant using the gravity sand filter system. (The Edge)

The proposed merger of UEM Sunrise Bhd and Eco World Development Group Bhd (EcoWorld), which was put forth by UEM Group, does not require the approval of the Cabinet. The proposal was mooted based on the potential commercial benefit the merger could bring, and that it only requires the approval of the respective companies' boards of directors, as it is a matter relating to the operation of companies. (The Edge)

QL Resources Bhd and Boilermech Holdings Bhd have requested for the trading of their shares to be suspended tomorrow pending an announcement. The shares in both counters will be suspended with effect from 9am. (The Edge)

Top Glove Corp Bhd is continuing with its share buy-back spree from last month, spending RM69.9m today to buy 10.4m shares, priced at between RM6.70 and RM6.86 per share. The group has spent RM1.28bn on share buy-backs since September, with RM802.6m spent in November and RM354.8m spent in September. (The Edge)

AirAsia X Bhd expects the outcome of its ongoing scheme of arrangement under its debt restructuring exercise to inject fresh equity to be known by the end of June next year. It was changing its financial year end to 30th June 2021 from 31st December 2021. (The Edge)

Source: Mplus Research - 3 Dec 2020