Market Review

Malaysia: The FBM KLCI (+0.9%) extended its gain to close at 18 months high, powered by investors’ buying interest in banking heavyweights, led by Public Bank Bhd amid its bonus issue announcement. The lower liners ended mixed, while the broader market was mostly higher, led by the financial services sector (+2.5%).

Global markets: The Dow (-0.4%) and S&P 500 (-0.8%) retreated from its record high position as investors continued to monitor the progress on stimulus negotiations in Washington, while Nasdaq suffered 1.94%. Both the European and Asia stockmarkets, however, finished mostly higher.

The Day Ahead

Tracking the negative sentiment on Wall Street, coupled with the selling pressure on the healthcare stocks, we expect broader market sentiment on the local front to stay muted and market players may digest their gains further. Also, FBM Small Cap has formed a bearish engulfing bar, which may suggest some pullback to be seen in the near term. Nevertheless, we believe traders will be monitoring for recoverytheme stocks today given the re-opening of business activities as well as optimism on Covid-19 vaccine positive developments.

Sector focus: The financial sector may expect some follow-through buying support following Public Bank’s bonus issue corporate action, while selected construction and building materials stocks may have decent trading interest given the reopening of economies which may translate to potential dishing out of new infra contracts. Besides, traders could monitor on O&G sector as Brent oil price is hovering steadily along USD49.

FBMKLCI Technical Outlook

The FBM KLCI may be slightly overbought after the gap-up formation yesterday. Hence, the key index may be due for a mild pullback as healthcare stocks may drag the index today. However, we believe financial and plantation members within the FBM KLCI may cap the downside risk during this window dressing period. The FBM KLCI’s resistance will be set around1,655-1,676. Meanwhile, support will be envisaged around 1,630, followed by 1,620.

Company Brief

The government has decided to withdraw the approval of indirect property acquisition by Tamaco Plantation Sdn Bhd through the subscription of 100.0% shares from two TH Plantations Bhd’s subsidiaries — Bumi Suria Ventures Sdn Bhd and Maju Warisanmas Sdn Bhd on 4th December 2020 for further scrutiny, as it was subject to property acquisition guidelines which have been in effect since 1st March 2014. The guidelines stipulated that dilution of properties by Bumiputera interests via direct or indirect acquisition by non-Bumiputera interests is based on retention of at least 30.0% equity ownership for the latter.

India-based conglomerate Tata Group will stop dues payment by AirAsia (India) Ltd to AirAsia Group Bhd, if the latter does not provide funding to their low-cost airline joint venture before 31st December 2020. Tata will also start deducting the dues and setting them off against equity shares in AirAsia India, if its JV partner AirAsia Group is unable to bring in funds by subscribing to a rights offer of at least 300 crore rupee (about RM166.0m).

Malaysian Resources Corp Bhd (MRCB) will be participating in the United Nations Global Compact’s CFO Taskforce. Its membership in the task force reinforces its commitment to pursuing the Sustainability Development Goals (SDGs), and it will be able to provide an Asean perspective on developing strategies to accelerate the delivery of the SDGs within the private sector. MRCB’s chief corporate officer Amarjit Chhina is the only member from Malaysia and the first in Asean to be invited to join the CFO Taskforce. There, he will be working with peers from other companies worldwide on a two-year programme to implement the CFO Principles on Integrated SDG Investments and Finance.

Top Glove Corp Bhd's 1QFY21 net profit surged 2135.9% YoY to RM2.38bn, underpinned by continued strong global rubber glove demand due to the Covid-19 pandemic. Revenue for the quarter rose 393.4% YoY to RM4.76bn. An interim dividend of 16.5 sen a share, payable on 11th January 2021 was declared. Separately, the production lines in the group's temporarily-closed 28 factories in Klang are expected to be fully operational within the next two- to three weeks. Seven factories have resumed their operations under stage one. It hopes to start stage two with another seven factories to resume work by this weekend. The remaining 14 factories will recommence activities in the following two weeks in stages three and four.

My EG Services Bhd (MyEG) is planning to raise up to RM407.0m via placement to fund the development of hostels for foreign workers under an ongoing project, develop healthcare-related services, and to buy fixed assets like kiosks for the online renewal of car and motorcycle road tax under its e-government concession business. It intends to place out up to 220.0m new shares that represent up to 6.3% of its total issued shares to third-party investors to be identified.

Public Bank Bhd has denied any involvement in a joint venture with G Capital Bhd to set up a new full-fledged commercial bank in Cambodia. It clarified that one of the parties involved in the venture, Datuk Phan Ying Tong, was acting in his own capacity, as he had resigned from all of his positions in the bank.

Cymao Holdings Bhd has been slapped with an unusual market activity (UMA) query on the sharp rise in its share price and volume recently. Shares of Cymao shot up 26.3% or 13 sen today and settled at 62.5 sen, with 4.8m shares traded which is five times that of yesterday’s volume of 914,800.

Kumpulan Powernet Bhd (KPower)’s wholly-owned subsidiary KPower Engineering Sdn Bhd had received and accepted a letter of award worth RM296.0m from Kangsar Hidro Sdn Bhd to undertake the engineering, design, procurement, construction, commissioning and completion of a mini-hydropower plant, with a total capacity of 27.3MW in Sungai Singor, Perak.

AWC Bhd has secured a hospital support services contract from the Health Ministry worth RM107.9m, following the ministry’s acceptance of its tender to provide the services for the Shah Alam Hospital. The contract period will be five years, commencing 1st January 2021 to 31st December 2025.

Source: Mplus Research - 10 Dec 2020