Market Review

Malaysia: The FBM KLCI (-0.3%) retreated but managed to recoup most of its intraday losses as political uncertainty were temporary brushed aside following the implementation of State Of Emergency (SOE). Amidst the positive broader market, the lower liners finished higher, but the broader market closed mixed.

Global markets: US stockmarkets finished mildly higher as the Dow climbed 0.2% on a choppy trading session as investors shift their attention to the prospects of economic recovery, coupled with the Covid-19 vaccine rollout, targeting 50% of population by May 2021. European stockmarkets extended their losses, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI recouped most of its intraday losses in the afternoon session yesterday, as market sentiment was lifted by a nationwide state of emergency proclaimed by the Yang di-Pertuan Agong that will be enforced until 1st August 2021. While the move should be reducing some of the political uncertainties in the country, the key index still closed lower as the number of Covid-19 cases remains high. However, we believe the local bourse should find stability soon as some bargain hunting activities were noticed in the market. The lower liners may extend their gains yesterday as the rise in the indexes was supported by rising trading volume throughout the day.

Sector focus: Investors are likely to participate within the healthcare sector which sees earning certainties amid rising Covid-19 cases. Besides, transportation & logistics counters should be also under the limelight due to further lockdown measures starting today.

FBMKLCI Technical Outlook

While the FBM KLCI continued to close below the EMA20 level, a consolidation is expected to the key index with the 1,600 level continues to hold. Immediate resistance at 1,660, while support is pegged at 1,570, followed by 1,560. Indicators remained mixed as the MACD Histogram has extended another green bar, while the RSI remains below 50.

Company Brief

Ho Wah Genting Bhd is planning to raise up to RM34.6m by placing out new shares in the company to investors. Proceeds from the proposed private placement will be used to expand its healthcare business, repay short-term advances provided by Hong Kong-based Prime King Investment Ltd (RM10.0m) and as general working capital. Under the fund raising scheme, HWGB plans to issue up to 60.67 m new shares to new investors, at an assumed issue price of 57 sen a share. (The Star)

Spring Art Holdings Bhd has confirmed that some of its employees have tested positive for Covid-19. Following this, the operations of Spring Art’s factories A and B and its administrative office have been temporarily suspended and shall resume on 20th January 2021. The company added that the group had incurred an estimated cost of RM200,000 resulting from swab tests and disinfection works. (Bernama)

Phamaniaga Bhd set to carry out the fill and finish of Covid-19 vaccine developed by Sinovac Life, which is expected to be ready to be distributed to the public by end-March 2021. The agreement is for the supply of 14.0m doses of Covid-19 vaccine to be carried out for fill and finish activity. Sinovac Covid-19 vaccine has completed the phase three trials in Brazil and Turkey, and is now in the process of getting approvals in both countries. (Bernama)

QL Resources Bhd's takeover offer for shares it does not own in Boilermech Holdings Bhd has been extended to 29th January 2021. The initial deadline for the conditional mandatory general takeover offer at 95 sen per share was 14th January 2021. QL currently controls a 48.4% stake or 249.8m shares in Boilermech. (The Edge)

The Federal Land Development Authority (Felda) has issued an offer document in relation to its unconditional mandatory takeover offer for all remaining ordinary shares in FGV Holdings Bhd which it does not own, except treasury shares. The cash offer of RM1.30 per share would be open for acceptances until 2nd February 2021 unless extended or revised. (The Edge)

I-Stone Group Bhd has temporarily halted production activities at two of its subsidiaries in Johor Bahru after 11 employees tested positive for Covid-19. Four local engineers from i-Stone Systems Sdn Bhd contracted the virus from its customer's workplace, while seven foreign employees — four from i-Stone Engineering Sdn Bhd and three from PA Metal Technics Sdn Bhd have contracted the virus in a dormitory managed by a third-party service provider. (The Edge)

Handal Energy Bhd is looking to raise up to RM11.1m via a private placement to repay its borrowings and fund its working capital. It is planning to issue up to 49.5m new shares or 20.0% of its share capital to third-party investors to be identified. The indicative issue price of placement shares is assumed to be 22.5 sen apiece, which is a 2.28 sen or 9.2% discount to its five-day volume-weighted average market price of 24.78 sen. (The Edge)

Mulpha International Bhd's wholly-owned unit Mulpha Australia (Holdings) Pty Ltd has accepted a syndicated credit facility of A$342.0m (RM1.07bn) from OverseaChinese Banking Corp Ltd and United Overseas Bank Ltd in Australia to finance the refurbishment works at InterContinental Sydney Hotel and to refinance its existing borrowings. (The Edge)

ATTA Global Group Bhd's executive director Tan Kim Hee has been detained by the police. Tan was held by Johor police to assist an investigation not related to the group or any of its subsidiaries and associate companies. (The Edge)

MTD ACPI Engineering Bhd has won a RM33.4m construction contract from the Public Works Department in Pahang. The group wholly-owned subsidiary MTD Construction Sdn Bhd will undertake the Police Training Centre project in Bentong. The contract is due to be completed on 11th July 2022. (The Edge)

Malaysia Airports Holdings Bhd's (MAHB) passenger traffic for December 2020 rose 24.2% MoM to 2.3m. Malaysia's December 2020 traffic performance was impacted by the lifting of the interstate travel ban on 7th December 2020 with domestic passenger movements totalling 1.1m. (The Edge)

AirAsia Group Bhd domestic flights in Malaysia remain operational despite the planned implementation of the Movement Control Order across several states and federal territories from today until 26th January 2021 and that guests who do not wish to travel during this period can cancel their flights voluntarily and opt for unlimited flight changes without any additional cost. (The Edge)

Gas Malaysia Bhd has set the average natural gas selling price for the distribution segment of its unit Gas Malaysia Energy and Services Sdn Bhd at RM22.14/mmBtu for 1Q2021, which is RM11.51/mmBtu or 34.2% lower than 2020. (The Edge)

Source: Mplus Research - 13 Jan 2021