Market Review

Malaysia: The FBM KLCI (+1.9%) rallied with over 900 counters in the positive zone as investors’ optimism driven by UK’s approval on Pfizer-BioNTech Covid-19 vaccine remained. The energy sector (+4.2%) led the positive broader market, while the lower liners also finished in the green.

Global markets: US equities ended mixed as investors weighed falling unemployment claims and Pfizer’s supply chain issues that would affect this year’s deliveries of its Covid-19 vaccine. The Dow (+0.3%) and Nasdaq (+0.2%) inched up, while S&P500 (-0.1%) edged lower. European stockmarkets ended mixed, while Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI delivered another commendable performance amid optimism that Malaysia economy is widely touted to emerge from the Covid-19 pandemic slump following the recent progress of Covid-19 vaccine developments. Still, we reckon that the strong upsides may also attract quick profit taking activities over the interim. At the same time, the lower liners are set for the extended rally that is largely driven by the ample of liquidity as investors continue to seek for higher yields investments.

Sector focus: Following the conclusion of OPEC meeting that will see production to be raised at a smaller amount at 500,000 b/d vs. initial estimate of 2.0m b/d, we reckon that the energy sector will continue to flourish. The construction sector will be supported by the upcoming packages of mega infrastructure projects, whilst the higher CPO prices bode well for the plantation sector.

The FBM KLCI gapped up and lingered in the positive territory for the entire trading session before finishing sharply higher. With the 1,615 resistance breakthrough, we believe that further upsides are expected to unfold towards the next resistance at 1,640, followed by 1,670. Meanwhile, the supports are at 1,600, followed by 1,580. Indicators have turned positive as the MACD Histogram has turned green, while the RSI remains above 50.

Company Brief

Two of Menang Corp (M) Bhd's shareholders Siow Pei Tee and Nicholas Pun Chee Cheang, holding 0.01% and 4.97% stakes in the company respectively, are seeking the removal of Dr Christopher Shun Kong Leng from the company's board at its next annual general meeting to be held on 30th December 2020. (The Edge)

JF Technology Bhd is considering transferring its listing to the Main Market of Bursa Malaysia in 2021. It is confident about the execution of its plan, with its indepth technical expertise and established track record. Its shareholders had also approved the proposed bonus issue of shares with free warrants on the basis of three bonus shares together with two free warrants for every existing share held. (The Edge)

The Ministry of Finance (MoF) has denied that it and its wholly-owned subsidiary Prokhas Sdn Bhd invited Ranhill Utilities Bhd to undertake due diligence activities on Indah Water Konsortium Sdn Bhd (IWK) in relation to the proposed disposal of MoF Inc’s interest in IWK. (The Edge)

Supermax Corp Bhd has been added to the FTSE Bursa Malaysia KLCI, following the semi-annual review of the FTSE Bursa Malaysia Index Series. Bursa Malaysia said KLCC Property Holdings Bhd and KLCC REIT (KLCCP Stapled) will be removed from the index. Meanwhile, the FTSE Bursa Malaysia KLCI reserve list now comprises the five highest-ranking non-constituents of the index by market capitalisation, which are Kossan Rubber Industries Bhd, QL Resources Bhd, Mr D.I.Y. Group Bhd, Westports Holdings Bhd and KLCC Stapled. (The Edge)

UWC Bhd is proposing to undertake a one-for-one bonus issue on an entitlement date to be determined. The exercise will involve the issuance of up to 550.2m new shares, which will enlarge UWC's share capital to 1.10bn shares. (The Edge)

Astro Malaysia Holdings Bhd's 3QFY21 net profit slipped 3.7% YoY to RM164.5m, in line with the lower revenue reported. Revenue for the quarter decreased by 8.9% YoY to RM1.11bn. A third interim dividend of 1.5 sen per share, payable on 30th December 2020 was declared. (The Edge)

Tropicana Corp Bhd, of which tycoon Tan Sri Lim Wee Chai is the chairman and major shareholder, has bought RM78.5m worth of Top Glove Corp Bhd's shares at prevailing market prices from the open market. Lim, who holds an 11.1% stake in Tropicana, is also the chairman and founder of Top Glove, where he controls a 25.7% stake. Based on a back-of-the-envelope calculation, the property developer paid an average of RM6.97 per share for the lot, which represents a 0.1% stake in the rubber glove maker. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has bagged two engineering, procurement, construction and commissioning contracts for an estimated total value of RM271.1m. The contracts, one in Sarawak and the other in the Gulf nation of Qatar, have increased the group’s order book to RM1.70bn. (The Edge)

Source: Mplus Research - 4 Dec 2020