Market Review

Malaysia: The FBM KLCI (+0.5%) registered its fourth straight winning streak with gains propelled by impending removal of all conditions under the i-Sinar withdrawal facility, coupled with the higher crude oil prices. The lower liners also marched higher, while broader market flourished with the energy sector (+3.0%) taking the lead amidst the firmer crude oil prices.

Global markets: US stockmarkets were closed for the Presidents' Day public holiday, while futures markets are indicating a positive start. European stocksmarkets extended their gains on the positive progress over the Covid-19 vaccine rollout, while Asia stockmarkets finished higher.

The Day Ahead

The first trading day after the Lunar New Year break saw the FBM KLCI climbing with all sectors finished in the green, in line with its regional peers. Meanwhile, oil price rose to its highest since January 2020 on the back of the Middle East tensions. With Wall Street inching higher overnight, we opine trading interest on the local front will remain robust as vaccine rollout across more countries may drive the optimism for an economic recovery. Likewise, the lower liners may continue its uptrend in the near term.

Sector focus: Based on the setup above, we believe the energy sector could continue to trend higher in tandem with firmer crude oil price. Besides, furniture and technology counters may be on traders’ radar ahead of the upcoming reporting season. Meanwhile, we expect transportation and logistics companies are likely to stay in focus due to the vaccine rollout plan.

FBMKLCI Technical Outlook

The FBM KLCI may continue its uptrend after closing above the psychological resistance level at 1,600 on improved global sentiment. Indicators turned positive as the MACD Histogram has extended another green bar, while the RSI climbed above 50. The next resistance level is found at 1,620-1,650, while the support level is pegged around 1,600, followed by 1,560

Company Brief

Menang Corporation Bhd has suspended two non-independent and non-executive directors; Datuk Shun Leong Kwong and Marianna Aly Shun from exercising their duties and functions with immediate effect. The company claimed the reason for Shun’s suspension was to investigate his managing and handling of some land transactions in Seremban 3 and the company's subsidiaries. As for Marianna, the reason was to investigate her conduct in the planning and the organising of the last AGM of the company on 30th December 2020. (The Star)

Yong Tai Bhd has denied rumours in the social media that its Covid-19 vaccine application has been rejected by the Ministry of Health’s (MoH) National Pharmaceutical Regulatory Agency. Yong Tai is still working closely with its Chinese partner to escalate the application process and urge all stakeholders to be patient and stop spreading untrue statements. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) expects the government's national vaccination plan which will be rolled out starting April 2021, and the reciprocal green lane/travel corridor arrangement (RGL/TCA) between Malaysia and Indonesia, to have a positive impact on the recovery of the national aviation industry in the near term. International passenger traffic grew by about 25.0% MoM in January 2021, despite border closures and strict quarantine measures. (The Edge)

Mulpha International Bhd and UEM Sunrise Bhd (UEMS) have called off their joint venture (JV) for a RM5.0bn gross development value (GDV) mixed development in Nusajaya, Johor, which was inked five years ago. The development fell through as the conditions precedent were not fulfilled, which included the obtaining of written approvals and planning approvals for the parcels of land, upon expiry of the conditional period. (The Edge)

Source: Mplus Research - 16 Feb 2021