Market Review

Malaysia: The FBM KLCI (-0.3%) was pressured by the selling activities in gloves heavyweights and the key index erased all its intraday gains in the second trading session yesterday. Both the lower liners and the broader market ended mixed with the latter saw the energy sector rallied 3.2% after crude oil prices recorded its seventh straight winning streak.

Global markets: The US stockmarkets continue to trend higher for the sixth straight session; the longest rally since August 2020 as the Dow rose 0.8% on optimism over the lower Covid-19 new cases with the vaccines delivery continue to accelerate. European stockmarkets ended higher, while Asia stockmarkets were mostly upbeat.

The Day Ahead

As the local bourse saw cautious trading sentiment ahead of the Lunar New Year celebration, investors may continue to reduce their exposure in the stock markets. Meanwhile, with the National Covid-19 Immunisation Plan came closer, and the daily cases stayed within the below the 4,000 mark for the fourth day running, investors may point towards recovery play moving forward. Also, Brent oil price has surged above the US$60 level, which may set a positive tone on the local front.

Sector focus: We expect energy stocks will continue to be on traders’ radar amid firmer oil prices, while recovery-themed stocks such as aviation and gaming could continue their uptrends amid the optimism on vaccine development. On the upcoming corporate earnings season, traders may position themselves within the consumer electronics, plantation, furniture and technology sectors.

The FBM KLCI erased its intraday gains to close below the EMA120 level. Indicators turned mixed as the MACD Histogram has extended another green bar, while the RSI remained below 50. The FBM KLCI may continue to trade range bound with resistance located around 1,600-1,610, while the support level is found at 1,560, followed by 1,550.

Company Brief

A consortium led by Dagang NeXchange Bhd (DNeX) has won the bid to acquire semiconductor fabricating company SilTerra Malaysia Sdn Bhd from Khazanah Nasional Bhd. Khazanah has informed DNeX that it had won its bid for the entire issued share capital of SilTerra, subject to the signing of a definitive agreement. (The Edge)

Telekom Malaysia Bhd (TM) is planning to buy back all outstanding Islamic Medium-Term Notes (IMTNs), before their respective maturity dates. These debt papers were issued up to RM2.00bn in nominal value. There are seven tranches with coupon rates between 3.9% and 4.5%, as well as maturity dates of between 25th June 2021 and 23rd June 2023. (The Edge)

Kenanga Investment Bank Bhd via its wholly-owned Kenanga Private Equity Sdn Bhd is acquiring a 19.0% stake in digital asset exchange (DAX) operator Tokenize Technology (M) Sdn Bhd (Tokenize Malaysia) to accelerate the buyers' digital agenda. Tokenize Malaysia operates Tokenize Xchange, which allows trading of cryptocurrencies like Bitcoin and Ethereum. (The Edge)

Widad Group Bhd, which is collaborating with Rinani Dynamic Sdn Bhd to distribute an oral-based (tablet) Covid-19 vaccine developed by Vaxart Inc in Malaysia has reported that phase one of the clinical trial has achieved a positive response. Vaxart is an American biotechnology company, developing a range of oral recombinant vaccines based on its proprietary delivery platform listed on the Nasdaq Stock Market. (The Edge)

Chin Hin Group Property Bhd plans to spend RM268.0m to acquire 81.9-ac. of land in the Klang Valley to develop five different property projects. Chin Hin aims to launch projects worth RM3.73bn in GDV in the next two years. (The Edge)

Tomei Consolidated Bhd’s 4QFY20 net profit surged 335.4% YoY to RM11.7m, thanks to lower expenses, coupled with higher sales volume and selling price. Revenue for the quarter increased 23.0% YoY to RM167.8m. (The Edge)

AwanBiru Technology Bhd (AwanTec) is selling an eight-storey office building at Star Central @ Cyberjaya, together with attached fixtures and fittings, to Serba Dinamik Group Bhd for RM24.2m. The disposal is part of its rationalisation plan to divest its non-core assets to improve its financial position and cashflow, however, is expected to result in a loss on disposal of RM680,000. (The Edge)

Datuk Sri Nazir Razak has been appointed as the non-executive independent chairman of PLS Plantations Bhd with effect from 10th February 2021. Nazir will assume the post from the group's current chairman Tan Sri Datuk Lim Kang Hoo, who will be redesignated as executive vice chairman of PLS. (The Edge)

QL Resources Bhd has received valid acceptances for 4.9m of Boilermech Holdings Bhd’s shares as at closing of its takeover offer yesterday, bringing its equity interest in the latter to 256.0m shares or a 50.2% stake. (The Edge)

XOX Bhd has proposed to acquire a 29.4% stake in sports apparel maker Cheetah Holdings Bhd for RM44.6m cash. The deal valued Cheetah at RM1.32 a share is expected to be completed by end-1Q2021. The acquisition is based on several factors, including that Cheetah is a long standing brand in the market with dominance over the youth and lower income segment. (The Star)

Source: Mplus Research - 9 Feb 2021