Market Review

Malaysia: The FBM KLCI (+1.8%) ended higher last Friday, marking the fifth positive session, as banking counters continued their earlier uptrend on economic recovery hopes following a series of positive vaccine newsflow.

Global markets: US stockmarkets finished the choppy week mixed as S&P500 (- 0.1%) and Nasdaq(-0.2%) inched down as the stimulus negotiation progress slowed ahead of funding bill to avoid a government shutdown, but the Dow (+0.2%) edged up.

The Day Ahead

Despite sentiment on the Wall Street trended mixed last week, we believe trading interest on the local front will remain robust, riding on the recovery theme as well as the ongoing window dressing period. Also, the positive vaccine development such as the emergency rollout of Covid-19 vaccine in the UK, US and Canada in the near term may point towards the optimism on economic recovery moving forward. With the anticipated recovery in business activities, we expect Brent oil and crude palm oil prices to remain firm within USD45-50 and RM3,200-3,400, respectively over the near term.

Sector focus: Market players are likely to focus on banking, gaming, shipping, plantation and O&G sectors. Besides, construction sector is likely to be on traders’ radar as news on KL-SG HSR surfaced in the media over the weekend, which may lift the trading sentiment on construction and building material segments this week. The commodities and shipping sectors may trend fairly strong amid an anticipated moving forward.

FBMKLCI Technical Outlook

The FBM KLCI trended higher for the week given the positive move on banking related and recovery-themed stocks. However, the MACD indicator is trending higher, but the RSI is overbought. Given the key index is overbought, it may take a breather around the resistance along 1,700. Meanwhile, the FBMKLCI’s support is envisaged around 1,640, followed by 1,620.

Company Brief

IHH Healthcare Bhd is ready to administer the coronavirus vaccine, once they are rolled out in the 10 countries it operates in. The company has a trained staff count of 55,000 across 80 hospitals it runs from Turkey to Singapore, as well as coldstorage facilities required to store the shots. (The Edge)

Bursa Malaysia Bhd's Bursa Malaysia Derivatives (BMD) will relaunch the Mini FTSE Bursa Malaysia Mid 70 Index Futures (FM70) contract, which will incorporate several amendments to the contract specifications. The revamped FM70 contract will be made available to traders from 14th December 2020. Launched in 2018, FM70 is a cash-settled ringgit-denominated futures contract which tracks the FTSE Bursa Malaysia Mid 70 Index as its underlying instrument. (The Edge)

Guocoland (Malaysia) Bhd group managing director Datuk Edmund Kong Woon Jun is resigning from his post effective 1st January 2021, after being at the helm for four year to pursue other business opportunities. The group has yet to announce a successor to Kong. (The Edge)

JHM Consolidation Bhd is acquiring a 5.6-ha vacant leasehold land in Penang for RM27.1m, cash, to expand its business into telecommunication equipment manufacturing industries that serve multiple multinational corporations in North American, Europe and Asia, and to tap into the growing demand for Internet of Things application, as well as Cloud/Data Center. (The Edge)

Ipmuda Bhd, which was slapped with an unusual market activity query by the bourse earlier, highlighted recent changes in its board of directors, substantial shareholders’ shareholdings, as well as contract wins in its response to Bursa Securities. Tan Sri Abu Sahid Mohamed had ceased as its substantial shareholder on 3rd December 2020, following the disposal of 2.6m shares by Maju Holdings Sdn Bhd, as well as changes in shareholdings of parties related to the businessman, namely Maju Holdings, Beroz Nikmal Mirdin and Nurhaida Abu Sahid. Besides, it had fixed the issue price for the first tranche of its private placement exercise at 56 sen per share earlier this week, and that it had bagged an engineering, procurement, construction and commissioning (EPCC) contract worth RM78.0m from Coara Marang Sdn Bhd in September 2020.

Ekovest Bhd’s mandatory general offer (MGO) to buy out shares in durian planter PLS Plantation Bhd at 95 sen apiece must be a good deal, judging by the overwhelming acceptance to the offer. Minority shareholders who collectively held 123.0m shares or a 33.9% stake, have accepted the offer. This has bumped up Ekovest’s shareholding in PLS to 91.2%. This block of shares is valued at RM116.8m at the offer price. Additionally, the construction group also holds 74.9% of PLS’ warrants, following the closing of the MGO. (The Edge)

Source: Mplus Research - 14 Dec 2020