Market Review

Malaysia: The FBM KLCI (-1.3%) kick started the holiday-shortened trading week on a dour note as selling activities resume with net foreign fund sellers (-RM199.7m) rose to the highest level since 4th January 2021. The lower liners were also not spared from the volatility, while the healthcare sector (+1.1%) was the only bright spot on the broader market.

Global markets: US stockmarkets ended mixed as the Dow (-0.1%) remained in the negative territory despite recovering most of its intraday losses as the US$1.9tn stimulus package may only be available in mid-March that offset the gains in technology shares. European stockmarkets extended their losses, while Asia stockmarkets finished mixed.

The Day Ahead

The selling on the FBM KLCI yesterday could have overdone as Health DG brushed off concerns over MCO3.0 and broader market could perform a relief rebound today. On the glove related stocks, we believe HARTA’s upbeat result could spillover to buying support on glove manufacturers and glove proxies today. However, investors could stay cautious ahead of the release of Malaysia's Producer Price Index tomorrow. As foreign funds turned into the selling mode, we expect the rebound might face with profit taking activities in the near term.

Sector focus: With the momentum picking up on healthcare stocks, coupled with HARTA’s result, traders may continue to lookout for opportunities within glove and glove proxies. Besides, investors may focus on severely bashed down stocks within the technology sectors ahead of the February reporting season.

The FBM KLCI has broken the support of 1,590, closing around the EMA 120 level. Indicators turned negative; the MACD Histogram has turned into a red bar, while the RSI remains below 50. If the key index could not surpass above the 1,600 level, we may see a further pull back going forward, with immediate support pegged at 1,570.

Company Brief

Hartalega Holdings Bhd’s 3QFY21 net profit leapt 723.3% YoY to RM1.00bn on the brisk glove sales. Revenue for the quarter grew 167.4% YoY to RM2.13bn. A second interim dividend of 9.65 sen, payable on 26th February 2021 was declared. (The Edge)

IGB Real Estate Investment Trust's (REIT) 4QFY20 net property income slipped 3.1% YoY to RM93.1m, mainly due to a higher allowance for impairment of trade receivables. Revenue for the quarter, however, rose 5.7% YoY to RM147.5m. A dividend of 2.08 sen per unit, to be paid on 26th February 2021 was declared. (The Edge)

Key ASIC Bhd's wholly owned subsidiary Key ASIC Semiconductor Ltd has entered into a contract worth US$5.3m (approximately RM21.2m) with Canvas Technology Pte Ltd. The project entails the technology and design of internet protocol development and licensing. (The Edge)

Sunsuria Bhd is disposing of two parcels of agricultural land in Kuala Lumpur to Kerjaya Prospek Property Bhd for a total of RM30.1m. Sunsuria’s 70.0%-owned subsidiary Sunsuria Genlin Development Sdn Bhd has entered into a sale and purchase agreement with Kerjaya Property Sdn Bhd to dispose of the two vacant freehold agricultural lands located in Setapak measuring a total of 9,092-sqm. (The Edge)

Bintai Kinden Corp Bhd is teaming up with Australian-based company, International Equities Corp Ltd, to jointly undertake two mixed property development and management projects with healthcare facilities and wellness services in Melaka and Penang. Bintai Kinden will take lead in the project to be developed on two parcels of freehold land spanning 2.2-ha. in Melaka and Penang with an estimated gross development value of RM470.0m. International Equities, on the other hand, will provide technical consultation, planning, design, development, and other services on the project. (The Edge)

Ge-Shen Corp Bhd announced that 10 employees of its 70.0%-owned subsidiary Demand Options Sdn Bhd have tested positive for Covid-19. The infected 10 employees work at Demand Options' primary operations in Desa Cemerlang, Johor Bahru. Mass testing has been conducted after the first case of Covid-19 was identified at Demand Options. (The Edge)

Prestariang SKIN Sdn Bhd, a unit of AwanBiru Technology Bhd (Awantec), is entitled to damages of between RM733.0m and RM922.0m after the Pakatan Harapan government unilaterally terminated a concession agreement for the provision of a comprehensive immigration system over 15 years with the company. Prestariang SKIN had completed 22.4% of the project since 2017, based on an assessment by an independent expert. (The Edge)

Censof Holdings Bhd has proposed a private placement to raise up to RM25.1m, partly to fund the acquisition of an additional stake in a subsidiary. The group is placing out up to 100.4m new shares or 20.0% of its shareholding to third-party investors. The indicative issue price of the placement shares is 25 sen apiece. Censof said it will be using RM14.1m of the proceeds of the placement to acquire an additional 30.9% interest in its 58.2%-owned subsidiary Asian Business Software Solutions Pte Ltd. (The Edge)

Koon Hoi Chun via AKK Capital Sdn Bhd is buying a 60.4% stake in carpet maker Paragon Union Bhd from major shareholders in an off-market deal. Paragon Union then received the notice of the unconditional mandatory takeover offer from Hong Leong Investment Bank Bhd on behalf of AKK. AKK's offer of 55 sen a share values Paragon Union at about RM36.4m based on the company's latest reported number of issued shares at 66.2m. (The Edge)

Dagang NeXchange Bhd (DNeX) has inked a consortium agreement with PT Infrastruktur Telekomunikasi Indonesia to maintain submarine cables. DNeX signed the agreement via a consortium comprising its unit PT DNeX Telco Indonesia (PT DTI) and PT Samudera Mbiantu Sesami (PT SMS). Under the deal, the consortium is established for a period of three years and may be extended over the next three years. (The Edge)

KNM Group Bhd indirect wholly owned subsidiary FBM Hudson Italiana SpA in Italy has secured a RM30.0m contract to supply facility equipment intended for a plant in the US. The project to supply and deliver the equipment is for a period of 14 months. (The Star)

Bioalpha Holdings Bhd's subsidiary has entered a memorandum of understanding with Zuellig Pharma Sdn Bhd for the import and distribution of the Covid-19 vaccine in Malaysia. The contract shall be effective from 22nd January 2021 and is subject to approval from the relevant authorities for the distribution and sale of the vaccine. (The Star)

Source: Mplus Research - 26 Jan 2021