Market Review

Malaysia: The FBM KLCI (+0.1%) edged marginally higher after fluctuated within both the positive and negative territories, lifted by year end window dressing activities. The lower liners finished in the green, while the broader markets also moved mostly higher, led by the property sector (+5.2%).

Global markets: US equities finished mixed as the Dow (-0.5%) and S&P500 (-0.2%) dipped on renewed lockdown orders caused by surging Covid-19 cases which increased to 200k cases daily, but Nasdaq (+0.5%) surged to record high. Meanwhile, both the European and Asia stockmarkets finished mostly lower.

The Day Ahead

Given the Wall Street traded on a mixed note, we expect mild profit taking activities to emerge on the local front within some of the recovery-theme stocks as the market could be overheated after trading volume on the local exchange surged above 10bn for the third trading day. Nevertheless, trading interest on the technology stocks could remain positive owing to the all-time-high move on Nasdaq. Meanwhile, we expect buying support to surface within the construction, building materials, as well as transportation and logistics companies today on the back of relaxation of CMCO measure.

Sector focus: We believe market players may lookout for opportunities within the aviation, tourism and gaming sectors on the back of the upliftment of interstate travel ban. Meanwhile, construction and building materials stocks may regain traction as traders will anticipate some contracts to be dished out moving forward following the Budget 2021 approva

FBMKLCI Technical Outlook

The FBM KLCI traded mixed and formed a flag formation over the past two trading days, but we believe this is healthy as market players will need to digest the gains before next uptrend move to emerge. The FBM KLCI is still hovering above EMA9, while the RSI is above 50. Further upsides will be envisaged around the next resistance at 1,640, followed by 1,670. Meanwhile, the supports are pegged at 1,600, followed by 1,580.

Company Brief

MyEG Services Bhd (MyEG) has entered into a cooperation with Anhui Zhifei Longcom Biopharmaceutical Co Ltd (Zhifei), via a memorandum of understanding, to obtain Malaysian halal certification for the Chinese biopharma company’s Covid19 vaccine and to exclusively distribute the vaccine in Malaysia for a three-year period. The commencement of the Phase 3 trials will make Zhifei’s vaccine one of the first to undergo the final-stage trials in Malaysia, under the purview of the Ministry of Health (MoH). (The Star)

Former inspector-general of police (IGP) Tan Sri Mohamad Fuzi Harun has resigned effective today from his role as Inix Technologies Holdings Bhd's independent and non-executive chairman, five days after his appointment. Succeeding the former IGP as Inix's chairman will be Tan Sri Syed Mohd Yusof Tun Syed Nasir, who was previously chairman of YLI Holdings Bhd. (The Edge)

Tropicana Corp Bhd’s recent acquisitions of RM78.5m worth of shares in Top Glove Corp Bhd is part of its investment strategy to capitalise on the potential robust growth of the rubber glove maker. The acquisitions allow the company to benefit from the prospects of the manufacturing and trading of gloves, which are largely contributed by the increased demand globally for gloves due to the ongoing Covid-19 pandemic and also the growth in the global healthcare services industry. (The Edge)

Yong Tai Bhd has announced a private placement to raise up to RM92.0m to be used to fund the development of its Impression City and Impression U-Thant projects, as well as for working capital. The private placement will consist of up to 20.0% of its total number of shares to independent third party investors to be identified later. For the first tranche of the proposed private placement of 25.0m placement shares, the board has decided to fix the issue price at 40 sen per share, representing a premium of approximately 35.7% to the five-day volume-weighted average market price of its shares.

Batu Kawan Bhd made a formal offer to buy all shares in Chemical Company of Malaysia Bhd (CCM) that it does not already own at RM3.10 per share. This is the price the group is paying to acquire a 56.3% stake in CCM for RM293.0m cash from Permodalan Nasional Bhd (PNB). Upon completion of the acquisition, Batu Kawan’s shareholding in CCM will be increased to 59.7% from 3.4%. (The Edge)

MTD ACPI Engineering Bhd has received an offer from its controlling shareholder MTD Capital Bhd to take the construction engineering firm private via a selective capital reduction and repayment exercise (SCR). MTD Capital executive chairman Tan Sri Dr Nik Hussain Abdul Rahman indirectly holds the entire equity interest in the group and is deemed to be the ultimate offeror for the proposed SCR, which involves MTD ACPI undertaking a selective capital reduction and a corresponding capital repayment to all shareholders of the company on an entitlement date to be determined later. (The Edge)

Malaysia Steel Works (KL) Bhd (Masteel) has proposed a rights issue with free detachable five-year warrants to raise up to RM81.5m, which would be used for mainly working capital requirements, and repayment of bank borrowings. The rights shares would be issued on the basis of one rights share for every two existing Masteel shares held, on an entitlement date to be determined later. Subsequently, one free detachable warrant would be issued for each rights share subscribed by shareholders. (The Edge)

Malayan Banking Bhd (Maybank) is among participating banks of the newly launched Singapore Financial Data Exchange (SGFinDex), which will enable Singaporeans to consolidate their financial information for more effective financial planning, according to a joint statement today by the Monetary Authority of Singapore, Smart Nation and Digital Government Group and The Association of Banks in Singapore. (The Edge)

Genting Malaysia Bhd’s resort in the Bahamas, which includes some 305 rooms and a casino, will be reopening on Boxing Day (26th December 2020). Resorts World Bimini Bahamas had been taking extra precautions for the safety of its guests, while limited packages including two-night packages are currently available for booking. (The Edge)

Source: Mplus Research - 8 Dec 2020