Market Review

Malaysia: The FBM KLCI (-0.2%) closed mildly lower after recovering most of its intraday losses as the weakness was largely in tandem with the negative performance across regional peers as the spike in Treasury yields sparked concerns. The broader market ended mostly on a negative territory, with only the consumer products (+0.9%) and financial services (+0.1%) sectors outperformed.

Global markets: The US stockmarkets trended mostly lower as the Dow and S&P 500 shed 1.5% and 0.5% respectively on lingering concern over the inflationary pressure amid the unexpected spike in Treasury yields, but the Nasdaq gained 0.6%. Both the European and Asia stockmarkets were downbeat on last Friday.

The Day Ahead

Mirroring regional downtrend, the FBM KLCI ended the week in red despite final hour bargain hunting. However, we believe buying support could emerge as the market sentiment is likely to turn positive following the news on the arrival of China’s CoronaVac vaccine in Malaysia. Nevertheless, we expect the political developments may provide the volatility to the market. On the side note, commodities upcycle in crude palm oil and Brent crude oil are likely to sustain over the near to mid-term based on the current momentum.

Sector focus: We continue to like recovery-theme stocks on the back of positive vaccine newsflow; traders may focus in gaming, tourism and consumer sectors. Meanwhile, we expect solar-related and construction players that involve in EPCC for solar segment to trade firmer following comments from Sultan of Johor.

The FBM KLCI closed slightly below the EMA120 level on a volatile manner. Technical indicators remained mixed as the MACD Histogram extended another green bar, while the RSI remained below 50. Hence, we believe the trading will be a sideways mode, ranging between 1,570-1,620 over the near term.

Company Brief

AMMB Holdings Bhd has agreed to a massive RM2.83bn global settlement on all outstanding claims and actions in relation to the AmBank Group’s involvement in the 1Malaysia Development Bhd (1MDB) matter. This latest global settlement is part of the Malaysian Government’s continuing recovery efforts that it is pursuing against all parties directly or indirectly involved in 1MDB and its related entities. This settlement amount is in addition to the RM53.7mil penalty already imposed by Bank Negara and paid by the AmBank Group. (The Star)

Top Glove Corp Bhd is seeking to raise RM7.77bn by selling new shares in Hong Kong. The dual primary listing on the Hong Kong Stock Exchange involved the issuance of up to 1.50bn new shares. This is 18.7% of the group's total issued shares of 8.02bn. The issue price for the new shares will be fixed at a later date. (The Star)

AirAsia X Bhd’s (AAX) 2QFY21 net loss stood at RM174.3m on the back of revenue at RM54.6m. There were no comparison figures due to change in financial year end from December to June. (The Edge)

Sapura Energy Bhd has secured a new credit facility of up to RM700.0m to finance working capital requirements, in light of the gradual recovery in the energy sector. Sapura Energy has signed an Islamic facilities agreement with Maybank Islamic Bhd, with loan tenure of up to five years. The financing is in addition to working capital facilities of up to USD135.0m secured from CIMB Bank Bhd in November 2019. (The Edge)

RHB Bank Bhd‘s 4QFY20 net profit dropped 29.4% YoY to RM438.6m, due to the net modification loss arising from the loan moratorium and higher expected credit losses. Revenue for the quarter fell 9.9% YoY to RM3.08bn. A final dividend of 7.65 sen per share subject to the dividend reinvestment plan, was proposed. (The Edge)

CIMB Group Holdings Bhd's 4QFY20 net profit rose 10.6% YoY to RM215.0m, on improved topline growth. Revenue for the quarter gained 5.6% YoY to RM4.72bn. An interim dividend of 4.81 sen, payable on was declared. (The Edge)

Hong Leong Bank Bhd's (HLB) 2QFY21 net profit slipped 4.4% YoY to RM670.8m, mainly due to higher allowances for impairment losses. Revenue for the quarter, however, increased 13.1% YoY to RM1.40bn. An interim single-tier dividend of 14.78 sen per share, payable on 25th March 2021 was declared. (The Edge)

Maxis Bhd's 4QFY20 net profit dipped 9.6% YoY to RM319.0m, following lower service revenue. Revenue for the quarter fell 12.7% YoY to RM2.26bn. A fourth interim dividend of 5.0 sen per share, payable on 31st March 2021 was declared. (The Edge)

Malaysia Airports Holdings Bhd’s (MAHB) 4QFY20 net loss stood at RM685.0m, from a net profit of RM29.5m recorded in the previous corresponding quarter, as Covid-19 battered passenger movements. Revenue for the quarter slumped 80.4% YoY to RM263.6m. (The Edge)

FGV Holdings Bhd’s 4QFY20 net profit jumped 87.9% YoY to RM134.9m, driven by higher crude palm oil prices. Revenue for the quarter added 27.1% YoY to RM4.01bn. A dividend of 3.0 sen per share for 4QFY20, payable on 31st March 2021 was declared. (The Edge)

Affin Bank Bhd’s 4QFY20 net loss stood at RM9.4m vs. a net profit of RM122.1m recorded in the previous corresponding quarter, due to a higher allowance for impairment losses and operating expenses. Revenue for the quarter, however, gained 28.6% YoY to RM620.8m. A dividend of 3.5 sen per share was declared. (The Edge)

Tenaga Nasional Bhd's (TNB) 4QFY20 net profit climbed 85.2% YoY to RM1.21bn, due mainly to a higher tax credit resulting from the claim of the reinvestment allowance incentive. Revenue for the quarter, however, fell 15.3% YoY to RM10.32bn. A final single-tier dividend of 18 sen per share and a special single-tier dividend of 40 sen per share was declared. (The Edge)

Hengyuan Refining Co Bhd’s 4QFY20 net profit surged 695.2% YoY to RM171.5m, thanks to higher average market prices of oil products. Revenue for the quarter, however, declined 42.2% YoY to RM1.82bn. An interim dividend of 4.0 sen per share, payable on 15th April 2021 was declared. (The Edge)

MMC Corp Bhd's 4QFY20 net profit soared 163.2% YoY to RM179.1m, mainly due to higher container volume handled at Pelabuhan Tanjung Pelepas (PTP) and Northport (Malaysia) Bhd, higher contribution from Klang Valley Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line (KVMRT-SSP Line), sale of land at Senai Airport City (SAC) and lower operating expenses and finance costs across the group. Revenue for the quarter increased 18.4% YoY to RM1.3bn. (The Edge)

Star Media Group Bhd has appointed Alex Yeow Wai Saw as its new chief executive officer (CEO) effective 1st March 2021. Yeow will fill the position left vacant for nine months following the departure of former CEO Andreas Vogiatzakis on 16th May 2020. (The Edge)

Dagang NeXchange Bhd (DNeX) has been slapped with a penalty of RM10.3m for infringement against the Malaysia Competition Commission (MyCC). The group's wholly owned unit Dagang Net Technologies Sdn Bhd received a notice of finding of an infringement from MyCC pursuant to Section 40 of the Competition Act 2010. (The Edge)

Source: Mplus Research - 1 Mar 2021