Market Review 

Malaysia: The local bourse stayed volatile as uncertainties in the market and political concerns dragged the FBM KLCI (-1.0%) to close below the 1,600 psychological level after previous session’s gains. The lower liners saw some selling pressure, while the healthcare sector (+1.2%) was the sole outperformer on the broader market.

Global markets: US stockmarkets ended in a mixed tone as the Dow rallied 1.4% higher while investors priced in the likelihood of a further stimulus package after Georgia elections results; but Nasdaq (-0.6%) was down. European stockmarkets finished higher, while the Asian stockmarkets were also mostly in the green.

The Day Ahead

It was another lacklustre performance on the FBM KLCI as sentiment was largely dented by the renewed political uncertainty. With the volatility has yet to be abated, we reckon that the sentiment will remain largely indifferent over the foreseeable future. At the same time, the elevated new cases of Covid-19 will continue to pile pressure on the pace of economic recovery as the prospects of more stringent measures on the CMCO being discussed. The lower liners will also remain choppy as traders are opting to keep their trades on a shorter time frame to reduce exposure to the volatile market environment.

Sector focus: We continue to favour the energy sector amidst the brighter outlook following the tighter supply from Saudi Arabia. Investors will also be monitoring on the developments over the finalisation of National Vaccination Plan today that may bring some attention to the vaccine and pharmaceutical-related stocks.

FBMKLCI Technical Outlook

The FBM KLCI formed a bearish candle as the key index tripped below the daily EMA60 level for the first time in two months. As the volatility has yet to abate, downside pressure will likely to be in place towards the immediate support at 1,580, followed by 1,550. Any upside will be capped towards the immediate resistances at 1,630-1,660. Indicators wise, the MACD Histogram has extended another red bar, while the RSI remains below 50.

Company Brief

Yong Tai Bhd is finalising its plans for the commercialisation of Covid-19 vaccine with Shenzhen Kangtai Biological Products Co Ltd (SZKT). Its 70.0%-owned subsidiary, YTB Healthcare Sdn Bhd (YTBH) has entered into a collaboration agreement with Tiong Nam Logistics Solutions Sdn Bhd to provide total logistics services which include transportation, warehouse space and distribution of the pharmaceutical products. YTBH also entered into a service provider agreement with Healthcliqs Sdn Bhd to engage Healthcliqs as service provider for the provision of services which include promotional sales campaign, marketing activities and virtual sales representation services of the vaccine. (The Sun Daily)

LBS Bina Group Bhd has planned launches valued at an estimated gross development value (GDV) of RM2.65bn this year. The group continues to adapt to new norm, shifting marketing strategies by further penetrating digital platforms. New developments in the pipeline in the Klang Valley include new phases at the Kita @ Cybersouth township in Dengkil which consist of serviced apartments, single- and double-storey terraced houses and double-storey townhouses. (The Sun Daily)

BlackRock, which holds a 1.6% stake in Top Glove Corp Bhd, voted against the election of six independent directors at the rubber glove maker's annual general meeting, as it is of the view that the board had failed in its duty to mitigate the issues of migrant workers' health and safety. The six independent directors are Datuk Lim Han Boon, Datuk Noripah Kamso, Datuk Norma Mansor, Tan Sri Rainer Althoff, Sharmila Sekarajasekaran and Lim Andy. (The Edge)

Hartalega Holdings Bhd and its two subsidiaries are suing its former executive director Danaraj Nadarajah, accusing him of having set up a competing business using one of the unit's resources during his tenure with Hartalega. They are seeking a declaration that he had breached his fiduciary duty, his duty of fidelity to the three companies, as well as his contract, and to claim for damages for his actions. (The Edge)

Techfast Holdings Bhd plans to diversify into petroleum trading and oil bunkering by acquiring a 35.0% stake in a company that supplies marine fuels. The group is buying the stake in CCK Petroleum Sdn Bhd from Kuah Choon Ching for RM26.3m, of which RM16.2m will be paid in cash and the balance via the issuance of 23.44m new Techfast shares at 43.0 sen per share. Kuah has issued a profit guarantee of RM10.0m for CCK Petroleum in FY21 and FY22. Techfast also announced a private placement of 75.3m shares or 30.0% of its total share capital to raise RM28.2m. (The Edge)

Censof Holdings Bhd has bagged a RM10.1m contract from the Ministry of Finance to undertake the provision of maintenance and support services for the latter's budget management information system, MYResults. The contract carries a tenure of two years from 1st January 2021. (The Edge)

AwanBiru Technology Bhd (Awantec), formerly known as Prestariang Bhd, is collaborating with Huawei Technologies (Malaysia) Sdn Bhd to drive and promote the adoption of Huawei Cloud and artificial intelligence (AI) products and services in the public sector. Under this collaboration, Huawei will act as Cloud and AI Service Provider, offering its cloud products and services. Awantec, on the other hand, will act as managed services partner and drive demand and adoption for Huawei's products and services. (The Edge)

Supercomnet Technologies Bhd will be reclassified under the healthcare sector effective from 11th January 2021. It is currently classified under the industrial products and services sector. (The Edge)

Cymao Holdings Bhd, which was issued an unusual market activity (UMA) query by Bursa Malaysia is unaware of any corporate development, apart from its proposed diversification into construction and project management. The board believes that the proposed diversification is expected to provide additional revenue streams and enhance the group's profits, thereby reducing its dependence on its existing business and subsequently improve the group's financial performance and shareholders' value. The group will also continue to secure more constructionrelated contracts. (The Edge)

Source: Mplus Research - 7 Jan 2021