Market Review 

Malaysia: The FBM KLCI (+0.5%) rose for a fourth straight session, lifted by the follow-through buying support in the banking stocks, but the gains were capped by losses in certain index-linked energy stocks. The lower liners ended mixed, while the energy sector was the biggest decliner across the mixed broader market.

Global markets: US stockmarkets ended mixed as the Dow (-0.2%) and S&P500 (- 0.1%) declined on stalling stimulus talks and the latest higher-than-expected jobless claims, but Nasdaq (+0.5%) rebounded. Both the European and Asia stockmarkets finished mostly lower.

The Day Ahead

Although Wall Street ended on a mixed note, we expect the trading activities on the local front may skew towards the positive side given the US FDA panel recommends the approval of Pfizer’s Covid-19 vaccine for emergency use; this may boost recovery-theme stocks on the local front as market players may continue to take profit on healthcare related stocks. Also, we noticed Brent oil and crude palm oil prices have trended higher overnight, which is in line with the optimism of vaccine news developments.

Sector focus: We think the O&G and plantation sector may return under the limelight on the back of rising commodities prices, while construction and building materials (steel and cement) should follow suit for short- to mid-term trading opportunities owing to the recovery theme play.

FBMKLCI Technical Outlook

The FBM KLCI continues for the third upward move helped by banking related stocks amid the window dressing period. However, we might anticipate the FBM KLCI to take a pause on the back of potential further profit taking activities on the glove heavyweights. Nevertheless, the histogram indicator is suggesting that the positive momentum is still intact, while the RSI is hovering above 50. The FBM KLCI resistance will be envisaged around 1,640-1,660, while the support is located around 1,620, followed by 1,600.

Company Brief

Poh Kong Holdings Bhd’s 1QFY21 net profit jumped 81.1% YoY to RM14.6m as higher gold prices and cost control efforts, coupled with the relaxation of the movement control order boosted its margins. Revenue for the quarter rose 8.2% YoY to RM221.9m. (The Star)

Cymao Holdings Bhd is in the final stage of discussion with several parties on a potential new viable business venture to reduce the plywood maker's reliance on its core business, as well as to expand the company's earnings base in response to an unusual market activity query from Bursa Malaysia. (The Edge)

AirAsia Group Bhd is currently in discussion with India-based conglomerate Tata Group on the future of their joint venture, AirAsia (India) Ltd. The group CEO Tan Sri Tony Fernandes was quoted as saying at a CAPA Centre for Aviation live event that India's aviation industry has been a competitive market which was tough for outsiders to come into. (The Edge)

Bermaz Auto Bhd’s (BAuto) 2QFY21 net profit rose 22.0% YoY to RM24.8m, boosted by improvement in domestic sales. Revenue for the quarter climbed 31.0% YoY to RM599.8m. A second interim dividend of 1.25 sen per share, payable on 5th February 2021 was declared. (The Edge)

BIMB Holdings Bhd (BHB) has obtained approval from the Minister of Finance and Bank Negara Malaysia for its proposed internal reorganisation and distribution and capital repayment, which will pave the way for the transfer of its listing to its subsidiary, Bank Islam Malaysia Bhd. Upon completion of the proposed exercise, BHB’s listing status will be transferred to Bank Islam, which will emerge as the one and only full-fledged Islamic financial institution to be listed in the region which will enhance its corporate stature. The listing will allow Bank Islam to better position itself in the Islamic finance and Islamic capital market and capitalise on the growth of both markets, in its efforts to expand its customer base. (The Edge)

After the massive share buy-back exercise undertaken by Top Glove Corp Bhd since September 2020, its chairman Tan Sri Lim Wee Chai has picked up the baton by buying 4.3m shares in his own capacity. Following the purchase, Lim has a direct interest of 26.1% in the world's largest glove maker, plus an indirect interest of 8.6%. (The Edge)

UMW Holdings Bhd’s automotive segment is on track to meet its full-year sales target, supported by strong sales in November 2020 by both subsidiary UMW Toyota Motor Sdn Bhd (UMWT) and associate company Perusahaan Otomobil Kedua Sdn Bhd (Perodua). The automotive segment had steadily recovered from the adverse impact of the Covid-19 containment measures earlier this year, with demand boosted by the sales tax exemption incentive announced by the government, effective 15th June 2020 to 31st December 2020. (The Edge)

The fulfilment of the conditions under the Sale and Purchase Agreement signed between KUB Malaysia Bhd’s (KUB) indirect wholly-owned subsidiary KUB Agro Holdings Sdn Bhd, and Beradin Plantation Sdn Bhd has been extended by 30 days until 8th January 2021. Under the agreement, KUB Agro Holdings had proposed to dispose of two oil palm estates in Kluang, Johor to Beradin Plantation for RM158.0m cash. (The Edge)

Berjaya Land Bhd’s (BLand), wholly-owned subsidiary Nural Enterprise Sdn Bhd acquired a total of 8.2m shares, representing about 0.7% equity interest in 7-Eleven Malaysia in the open market between 11th September 2020 and 8th December 2020. The shares were acquired for a total cash consideration of RM11.0m or an average of RM1.33 per share. As a result, BLand and its subsidiaries now have a 5.3% stake in 7-Eleven Malaysia. (The Edge)

Source: Mplus Research - 11 Dec 2020