Market Review 

Malaysia: The FBM KLCI (-1.0%) started off the week on a dour note as the key index languished in the negative territory for the entire trading session prior to the press conference in regards to the MCO announcement by the PM yesterday. The lower liners were fairly mixed, while the broader market was again mostly lower.

Global markets: US stockmarkets snapped a four-day rally as the Dow (-0.3%) and S&P 500 (-0.7%) retreated from the all-time high on mounting concern over the stretched valuations, whilst the Covid-19 cases remain at large. European stockmarkets also turned downbeat, while Asia stockmarkets finished mixed.

The Day Ahead

Fear over the new lockdown measures has driven profit taking activities on the local bourse, leading the FBM KLCI to close lower after a choppy trading session yesterday. Following the Prime Minister’s special address on the implementation of tighter movement restrictions in most parts of the country, we expect the market outlook to remain subdued today as further lockdowns may cause further stress to the economy. However, the negative market sentiment may not last long while the market awaits for vaccine rollout. The lower liners might also see greater selling pressure.

Sector focus: We believe the plantation sector may continue to be under the limelight after emerging as the biggest winner across the broader market yesterday, supported by Malaysian lower palm oil inventories in December according to Malaysian Palm Oil Board (MPOB). Besides, follow-through buying interest in the technology sector may drive the sector higher.

FBMKLCI Technical Outlook

The FBM KLCI has formed a bearish candle as the key index did not manage to close above the EMA20 level. Downside pressure is expected to remain in place with the immediate support at 1,590, followed by 1,575. Indicators remained mixed as the MACD Histogram has extended another green bar, while the RSI remains below 50.

Company Brief

Advanceon Holdings Bhd has entered into two separate deals to design, build and maintain solar energy generating systems at two factories, each in Rawang, Selangor and Seremban, Negeri Sembilan. Both projects are for a period of 21 years that will generate a total of 994-kWp under the Net Energy Metering scheme. The project is Rawang is expected to commence in 1Q2021, while the project in Seremban is sscheduled to start in 2Q2021. (The Star)

Hubline Bhd has secured a RM63.2m contract from the Sarawak state department of health to provide aircraft and helicopter services. The aircraft and helicopters will be utilised for the flying doctor service, medical evacuation service and other ancillary health services. The contract is for 48 months, from 1st January 2021 to 31st December 2024. (The Edge)

HLT Global Bhd has proposed to acquire the remaining 45.0% stake in rubber glove subsidiary, HL Rubber Industries Sdn Bhd (HLRI) for RM90.0m via the issuance of 90.0m new HLT shares at RM1.00 per share. HLT decided to raise its stake in HLRI, given the favourable prospects of the rubber glove industry. (The Edge)

Public Bank Bhd is offering repayment relief for loan and financing customers who have been affected by the recent floods in several states. The repayment relief includes a deferment of monthly instalment for loan and financing of up to six months, on a request basis. (The Edge)

Three shareholders of Asia Media Group Bhd are seeking to replace four of the company’s existing directors with new ones. Chow Zee Neng, Sim Ah Yoke and Datuk Chu Boon Tiong, who collectively own at least 10.0% of the company’s shares, have written to the board of Asia Media to give notice of their intention to move resolutions to effect the proposed board changes at an EGM on 18th February 2020. They are seeking to remove existing directors Datuk Prof Raja Munir Shah Raja Mustapha, Datuk Kang Hua Keong, and Chua Yeong Lin. (The Edge)

Source: Mplus Research - 12 Jan 2021