Striding higher 

Market Review

Malaysia: The FBM KLCI (+1.5%) recovered all its previous two session of losses driven by bargain hunting, coupled with the higher crude oil prices whereby the local bourse recorded more than half of the constituents finished higher yesterday. The lower liners extended their gains, while the healthcare sector (0.1%) was the sole decliner on the broader market.

Global markets: US stockmarkets ended on a mixed note as the Dow (-0.03%) slipped but the S&P 500 (+0.2%) extended its gains as in investors monitor on the progress over the much anticipated stimulus bill. Meanwhile, both the European Asia stockmarkets ended mostly higher.

The Day Ahead

Tracking the gains on regional markets, the FBM KLCI has closed at the highest level since the beginning of the year, with buying interest seen in the recovery themed stocks such as banking and gaming heavyweights. Investors shrugged off concerns on the first day of MCO 2.0 while the essential sectors remain opened. The key index may take a little following yesterday’s rallies, but we expect the downside to be limited. The lower liners saw some rebound signs as the indexes made significant headway yesterday after recent consolidation.

Sector focus: We expect traders to focus on stocks with earnings certainty ahead of the February reporting season. Sectors that may be under the limelight include furniture, technology, gloves. Meanwhile, we believe financial services may trade higher as momentum has picked up during the final hour of trading yesterday.

The FBM KLCI has breakout above its immediate resistance at 1,630, albeit accompanied by lower trading volume. With the technical indicators turning positive, where MACD Histogram has extended another green bar, while the RSI is rising above 50, we expect the key index may surge higher in the near- to mid-term after taking a mild breather. The FBM KLCI’s key resistance will be located around 1,660. However, should the key index drops below 1,630, next support is located around 1,590.

Company Brief

Eco World Development Group Bhd has ceased its merger talks with UEM Sunrise Bhd and it will now focus on its own business plans for FY21. The decision also came due to the current challenging environment with the re-implementation of Movement Control Order. (The Star)

Heitech Padu Bhd has secured a fresh three-year contract from the Inland Revenue Board worth RM35.2m. The renewed contract was for the supply, delivery and renewal of CA Gen software, Access Gen (TSO) and Composer Report for IRB's mainframe system. The contract is for a period of three years starting from 1st February 2021 to 31st January 2024. (The Star)

Greatech Technology Bhd has acquired a piece of land in Batu Kawan, Penang for RM13.4m cash, as the company seeks to relocate its plant in Lunas, Kedah to a new site closer to its headquarters. Greatech entered into a deal with Penang Development Corp on 13th January 2021 to purchase the 5.9-ac. site. The physical construction is expected to be completed by end-2021. (The Star)

Landmarks Bhd has reported that The Andaman, a resort owned by the company in Langkawi, Kedah, has stopped its operations due to a major fire incident. All guests and staff have been evacuated safely and any property and financial losses arising from this incident are covered by insurance policies taken up by the company. (The Star) Malaysian Rating Corp Bhd (MARC) has assigned preliminary ratings of MARC-1IS and A+IS to George Kent (Malaysia) Bhd’s proposed RM100.0m Islamic Commercial Papers (ICP) Programme and RM500.0m Islamic Medium-Term Notes (IMTN) Programme. The ratings outlook is stable and reflect George Kent’s conservative capital structure, strong liquidity position and a relatively stable water meter manufacturing business that is well supported by a long-standing relationship network, an extended geographical footprint and brand recognition. (The Edge)

Chin Hin Group Property Bhd has proposed to acquire a 1,943-sqm piece of vacant land in Kuala Lumpur for RM20.9m to develop office lots. The group indirect 51.0%- owned unit, BK Alliance Sdn Bhd is buying the land from Suez Domain Sdn Bhd. The 94-year lease on the land expires in 2112. (The Edge)

WCT Holdings Bhd has reported that a judicial committee has upheld the Dubai Court of Appeal's decision that recognises a final award of RM1.2bn in favour of the company in its dispute with Meydan Group LLC over the Nad Al Sheba Dubai Racecourse project. WCT will continue to pursue its legal rights in respect of the final award, which was issued by the Arbitral Tribunal in 2015 when it initiated arbitration proceedings against Meydan in 2009 over the cancellation of the RM4.6bn race course project in Dubai. (The Edge)

AE Multi Holdings Bhd has bagged another project to set up the production facility for PNE PCB Bhd, a new entrant to the rubber glove industry. The company announced that its unit AE Multi Industries Sdn Bhd has received a letter of award from PNE Glove Sdn Bhd to design, build and deliver on a turnkey basis a glove manufacturing factory of up to 59,000 sqf within eight months. The factory will have the capacity to house up to 10 glove-dipping lines for the sole purpose of manufacturing medical grade nitrile gloves. (The Edge)

Aeon Credit Service (M) Bhd has been granted a renewal for its money-lending licence under the Moneylenders Act 1951 and Moneylenders (Control and Licensing) Regulations 2003 by the Ministry of Housing and Local Government. The licence is valid for another two years effective 15th January 2021 till 14th January 2023 and is subject to renewal with the Ministry. (The Edge)

Dayang Enterprise Holdings Bhd has won a contract extension from Sarawak Shell Bhd for the provision of an accommodation workboat, Dayang Opal. This is under the umbrella contract for offshore support vessel services for Petronas’ Petroleum Arrangement Contractors’ drilling and project activities. (The Edge)

Petronas Dagangan Bhd (PetDag) and Maxis Bhd have inked a strategic partnership to jointly offer converged solutions focusing on safety, security and sustainability for businesses. The firms said the partnership will focus on leveraging big data and advanced analytics to co-create hyper personalization for an enhanced retail experience. (The Edge)

Genting Malaysia Bhd’s Resorts World Genting (RWG) has issued a notice that it anticipates a decline in number of visitors following the implementation of the MCO, Conditional MCO (CMCO) and Recovery MCO (RMCO). It will be operating at a lower capacity and that some of its offerings may not be available from 13th January 2021. (The Edge)

Wintoni Group Bhd has been granted a further extension of time, until 30th June 2021 to appoint a replacement sponsor and submit its regularisation plan, subject to the appointment of a sponsor by 1st March 2021. (The Edge)

Source: Mplus Research - 14 Jan 2021