Market Review

Malaysia: The FBM KLCI (+0.7%) extended its gains, spurred by the higher crude oil prices, coupled with the relaxation of MCO 2.0 measures after the daily new Covid- 19 cases appear to taper. The lower liners, however, finished lower, whilst the broader market ended mostly negative with the technology sector (-0.9%).

Global markets: US stockmarkets finished mixed as the Dow gained 0.2%, but the S&P 500 and Nasdaq shed 0.03% and 0.3% respectively after the Consumer Price Index (CPI) data only climbed 1.4% YoY; the weakest growth since June 2020. European stocksmarkets were downbeat are succumbing to selling pressure in the eleventh hour, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI charged higher yesterday, mainly boosted by the gains in banking heavyweights as traders tagged along with the recovery theme. However, we believe the tone may turn slightly cautious ahead of the Bank Negara Malaysia’s (BNM) announcement on Malaysia’s economic performance for 4Q20. Also, market participants might reduce trading activities prior to the long weekend. Hence, the FBM KLCI may stay within a rangebound mode throughout the session.

Sector focus: Although we expect the market players to trade cautiously today, we believe energy sector to stay focus amid firmer Brent crude oil price (above USD60). Also, recovery-themed sectors such as banking, aviation and gaming sectors may still be on traders’ radar at least for this week.

The FBM KLCI soared yesterday, closing around its EMA9 level, but failed to cross above the 1,600 psychological level. Technical indicators remained mixed as the MACD Histogram has extended another green bar, while the RSI remained below 50. Should the key index climb above its immediate resistance level at 1,600, further upside could be seen around 1,610-1,620. Support is pegged around 1,550- 1,560.

Company Brief

Permaju Industries Bhd has entered into a conditional share sale agreement with Chai Kim Chong to acquire 600,000 ordinary shares in Hardie Development Sdn Bhd representing 30.0% equity interest for RM21.8m. Hardie is an existing 70.0%- owned subsidiary of Permaju. Permaju has also proposed to undertake a private placement of up to 182.4m new ordinary shares representing 30.0% of its existing total number of issued shares to independent third-party investors to be identified later. (The Star)

British American Tobacco (Malaysia) Bhd’s 4QFY20 net profit fell 25.6% YoY to RM72.7m, as it recorded lower revenue and higher operating expenses, while cost of sales grew. Revenue for the quarter declined marginally by 0.3% YoY to RM660.2m. A fourth interim dividend of 27.0 sen, payable on 9th March 2021 was declared. (The Edge)

Sapura Energy Bhd has reported that its wholly-owned subsidiaries and joint venture (JV) company have been awarded RM1.85bn worth of contracts and contract extensions, comprising engineering and construction, and drilling works in Saudi Arabia, Thailand, Brunei and Malaysia. (The Edge)

Tenaga Nasional Bhd (TNB) has announced Datuk Baharin Din's appointment as president and chief executive officer (CEO) of the Malaysian government controlled utility, effective 1st March 2021. This was after the Employees Provident Fund (EPF) confirmed the appointment of Datuk Seri Amir Hamzah Azizan as its chief executive officer (CEO) effective 1st March 2021, taking over from incumbent Tunku Alizakri Alias. (The Edge)

Texchem Resources Bhd has warned that its operations in Myanmar may be disrupted by the volatile political situation there. As Myanmar’s political situation continues to evolve and remain unclear at this juncture, the group will continue to closely monitor the situation in Myanmar, and will provide further update when there are significant developments. (The Edge)

Kejuruteraan Asastera Bhd (KAB) has proposed to undertake a share split of every 10 existing shares into 18 split shares, followed by a one-for-two bonus issue of warrants. (The Edge)

Yi-Lai Bhd is planning a bonus issue of 97.1m shares on the basis of two bonus shares for every three existing shares held, and a name change to YB Ventures Bhd. Following the bonus issue, the group's share capital will increase to 242.6m shares, from 145.6m shares currently. (The Edge)

Supermax Corp Bhd has reported that the temporary shutdown of its plants in Meru, Klang, will not have a significant impact on its revenue and earnings for the financial year ending 30th June 2021. It is estimating a less than 1.0% loss in annual production. (The Edge)

Ralco Corp Bhd has announced a temporary stoppage of its manufacturing facility in Nilai, Seremban until 15th February 2021, after several of its factory workers tested positive for Covid-19. As a result of the temporary closure of the affected plant premise, the capacity loss is estimated to be less than 1.0% of the total annual output volume. Its other production facilities located elsewhere are operating normally. (The Edge)

VS Industry Bhd has received notice from the Ministry of Health of Malaysia (MoH) to temporarily close three of its factories in Senai, Johor for a week, to carry out deep cleaning and disinfecting exercise at those affected factories. The factories, which will be closed from 11th February 2021 to 17th February 2021 are not expected to have any significant impact on the company’s operations and financial performance. (The Edge)

NWP Holdings Bhd has announced that the Companies Commission of Malaysia (CCM) has charged it for failing to obtain shareholders’ approval at its annual general meeting for the directors’ fees paid for the financial year ended 31st August 2017 and 31st August 2018. Upon conviction, NWP could be fined not more than RM3.0 m for each charge. The company has pleaded not guilty to the charges and the case has been fixed for mention on 1st March 2021. (The Edge)

Source: Mplus Research - 11 Feb 2021