Market Review 

Malaysia: The FBM KLCI climbed to close 0.7% higher after lingering in the negative territory in the morning session as bargain hunting activities were seen across the board, especially for the gloves and plantation counters. The lower liners continued their pull back, while the broader market finished mostly lower, except for the healthcare (+0.2%) and plantation (+1.0%) sectors.

Global markets: US stocks rose overnight as the Dow (+0.7%) extended its rallies, while Nasdaq (+2.6%) rebounded sharply on President-elect Biden’s victory and factoring higher stimulus hopes in the US. European stockmarkets ended in the green, while the Asian stockmarkets also closed mostly higher.

The Day Ahead

Following the rebound yesterday, we believe that the local bourse is now attempting to find stability as investors bargain hunt and nibble on beaten down stocks. While there are signs of return in foreign funds, we remain cautious amid the negative market undertone as the number of new Covid-19 cases in Malaysia surpassed 3,000 mark yesterday. The lower liners are expected to remain in the purple patch, as we believe the possibility of rotational play may take precedence amid the improved trading liquidity.

Sector focus: The technology sector is expected to remain in a sweet spot amid the strong demand, riding on the upcycle of the semiconductor industry. Meanwhile, the healthcare sector is poised for further recovery amid the attractive valuations, coupled with the strong fundamental prospects.

FBMKLCI Technical Outlook

The FBM KLCI has formed a hammer candle to recover all its intraday losses as the key index re-claimed the daily EMA60 level. With signs of recovery taking shape, the immediate resistance is located at 1,630-1,650. On the flipside, the immediate supports are at 1,580 and 1,550. Indicators have turned mixed as the MACD Histogram has turned green, while the RSI remains below 50, suggesting a potential technical rebound to take shape.

Company Brief

KESM Industries Bhd will be investing in new factory space in Malacca with over 100,000 square feet to support future growth in burn-in and test of automotive semiconductors. The executive chairman pointed out semiconductor reliability is a top safety concern for all new car designs. (The Sun Daily)

Bursa Malaysia has issued an unusual market activity (UMA) query to BSL Corp Bhd due to the sharp rise in the group’s share price and trading volume. The share price surged as much as 30.0 sen or 69.8% to 73.0 sen before retreating to close at 63.5 sen, still up 20.5 sen or 47.7%. The counter saw 7.9m shares traded yesterday, sharply higher than an average of 117,700 shares per day over the past 200 days. (The Edge)

Tomei Consolidated Bhd is mulling over the listing of its design and manufacturing of jewellery arm through a special purpose vehicle on the ACE Market. It is planning to list YXG Group, which will house four wholly-owned subsidiaries — Yi Xing Goldsmith Sdn Bhd, Gemas Precious Metals Industries Sdn Bhd, Emas Assayer Sdn Bhd and GPM Refinery Sdn Bhd. The group did not reveal any timeline of the listing plan. (The Edge)

Bintai Kinden Corp Bhd's partner Generex Biotechnology Corp has filed for a trademark for its li-Key vaccine, to be known as "The Complete Vaccine", and patent for its li-Key SARS-CoV-2 vaccine. The technology offers the safest and best route for the rapid development of a Covid-19 vaccine that can be safely administered to everyone, including children and pregnant women, without side effects. (The Edge)

Apex Equity Holdings Bhd, which last week announced the disposal of four parcels of freehold land in Shah Alam for RM37.0m, had initially planned a project involving the development of 61 units of shoplots with an estimated gross development value of RM86.5m on the land. The building plan is, however, still pending approval from the Shah Alam City Council (MBSA). Most of the 2.39-ha land is currently vacant except for a small plot which is currently let out to MBSA. (The Edge)

The sales tax exemption introduced by the government in the middle of 2020 propelled strong sales for UMW Holdings Bhd in second half of the year, resulting in 59,320 units of Toyota vehicles and 220,154 units of Perodua automobiles being sold last year, exceeding its 2020 targets of 53,000 vehicles under the Toyota marque and 210,000 units of Perodua automobiles. UMW Toyota Motor (UMWT) chalked its highest monthly sales in December at 9,246 units, with Toyota Vios, Yaris and Hilux being UMWT’s bestselling models for the year. Meanwhile, 38.0%- owned Perusahaan Otomobil Kedua Sdn Bhd (Perodua) sold 25,171 units in December 2020— its second-highest monthly sales last year. (The Edge)

CN Asia Corp Bhd had signed a memorandum of understanding with Intcys Sdn Bhd, under which it plans to invest RM400.0m in the establishment of a consortium to provide digital banking for women. Via the proposed MyWeW (Women Empowering Women) Digital Bank, the group plans to offer services such as entrepreneurial financing, microloans, applications of debit and credit cards, and opening of digital bank accounts. (The Edge)

TIME dotCom Bhd has acquired a 60.0% stake in Malaysia’s leading private cloud computing provider AVM Cloud Sdn Bhd for RM58.7m. The acquisition marks the group’s efforts in accelerating the growth of cloud computing as the newest pillar of its business, alongside fixed line services, global network connectivity and data centres. With the inclusion of AVM in the TIME family, the group now possesses a full spectrum of product offerings that can meet the needs of its enterprise customers across the region. (The Edge)

Source: Mplus Research - 8 Jan 2021