Market Review

Malaysia: The FBM KLCI (+0.1%) marched higher for the third straight session as the key index recovered all its intraday losses, largely lifted by the eleventh hour buying support in selected index heavyweights yesterday. The lower liners closed mixed, while the REIT sector (-0.1%) was the sole underperformer on the broader market.

Global markets: US stockmarkets extended their gains overnight as the Dow (+1.1%) recorded its fourth straight winning streak, while the S&P 500 (+1.1%) and Nasdaq (+1.2%) finished at record high levels on the stronger-than-expected batch of corporate earnings, coupled with the improving labour data. European stockmarkets were mostly upbeat, but Asia stockmarkets closed mostly lower.

The Day Ahead

Mirroring the gains on Wall Street, the FBM KLCI edged mildly higher after Prime Minister Tan Sri Muhyiddin Yassin’s update on the scheduled rollout of Covid-19 vaccination programme by the end of February 2021. The announcement coupled with the positive performance on Wall Street overnight may lift the overall market sentiment on the local front. Meanwhile, the lower liners will continue to enjoy their upward momentum as liquidity remains well on the equities market.

Sector focus: Given the economic activities may restart in the near term, we expect trading interest may develop within the recovery sector such as construction, building materials, property and gaming. Meanwhile, the technology, furniture as well as vaccine related counters should remain in the upbeat tone.

The FBM KLCI finished higher, but still hovering below the EMA20 level. However, technical indicators could be showing positive signs as the MACD Histogram extended another green bar, while the RSI has slipped into oversold territory. Resistance will be set around 1,600-1,610 and the support is pegged around 1,560, followed by 1,550.

Company Brief

Solution Group Bhd’s wholly-owned subsidiary Solution Biologics Sdn Bhd (SolBio) has signed a term sheet agreement with the Ministry of Health (MoH) for the supply 3.5m doses of the Recombinant Ad5-nCoV vaccine. The vaccine was jointly developed by CanSino Biologics Inc and Beijing Institute of Biotechnology, Academy of Military Medical Sciences. (The Star)

Tropicana Corp Bhd has promoted Lee Han Ming to take up the role of group chief executive officer. Lee will step up and join Tropicana Group Managing Director Dion Tan in the senior leadership team. Lee, a civil engineer by profession, joined Tropicana in 2018 as group managing director at its project division. (The Star)

T7 Global Bhd’s contract with Petroliam Nasional Bhd to provide splash zone structural repairs and maintenance has been extended by another one year. The value of the contract is based on the agreed rates as stipulated in the contract. (The Star)

My EG Services Bhd (MyEG) will introduce an at-home saliva-based Covid-19 testing service in the Philippines this month — the first of its kind in the Philippines market. The Covid-19 test is a safe, fast, convenient and non-invasive method that can greatly enhance accurate detection and subsequent early intervention. (The Edge)

Solarvest Holdings Bhd plans to buy power inverters from Huawei Technologies (M) Sdn Bhd and Sungrow Power Supply Co Ltd. The group has signed an MoU with Huawei and Sungrow for the planned supply of the estimated 100.0MW inverters to Solarvest. (The Edge)

Green Packet Bhd’s shareholders have approved the acquisition of Singapore based electronic know-your-customer (e-KYC) firm Xendity Pte Ltd for US$10.0m (RM40.6m). Of this sum, US$1.5m will be satisfied in cash while the remaining amount of up to US$8.5m will be satisfied via the consideration shares to the vendors of Xendity in three tranches over three financial years, based on specified performance targets. (The Edge)

GHL System Bhd is currently investigating e-pay data breach allegations. An unconfirmed report has been circulating in the media, claiming e-pay data has been compromised and that a threat actor is selling customers’ personal identifiable information (PII) data and credentials related to their website. (The Edge)

Reservoir Link Energy Bhd has proposed a bonus issue of up to 71.3m warrants on the basis of one warrant for every four existing shares, of which the entitlement date and exercise price of the warrants will be determined later. (The Edge)

CIMB Group Holdings Bhd has announced the completion of the sale of its 100% equity interest in CIMB Southeast Asia Research Sdn Bhd (CARI) to the latter's chairman Tan Sri Dr Mohd Munir Abdul Majid. Mohd Munir said he intends to continue with the think tank’s research and advocacy work. (The Edge)

Ranhill Utilities Bhd has been awarded a contract for pipe works in Muar, Johor, worth RM7.5m. The job entails the supply and installation of 5.3km of main rising pipe. The contract is part of the infrastructure works being implemented for the development of Muar Timber Industrial Park. (The Edge)

Source: Mplus Research - 5 Feb 2021