Market Review

Malaysia: Selling pressure, particularly from gloves heavyweights sent the FBM KLCI (-0.7%) to close lower as the key index underperformed the mostly positive performance across its regional peers. The lower liners extended their losses, while the broader market ended mixed with the healthcare sector (-1.9%) underperformed.

Global markets: The US stockmarkets staged a sharp recovery as the Dow jumped 2.0% as investors brushed off the concern over the rising Treasury yields, coupled with the strong Institute for Supply Management PMI data at 60.8 in February 2021; the strongest expansion since February 2018. Both the European and Asia stockmarkets also ended higher yesterday.

The Day Ahead

The FBM KLCI ended the first trading session of March in red amid continued selling pressure in glove heavyweights following further developments on Covid-19 vaccine. Although the arrival of the Covid-19 vaccine has dented the sentiment on healthcare sector, the local bourse was supported by the positive sentiment on the recovery-theme sectors. Meanwhile, we also expect 5G and tech stocks to trade firmer following overnight Nasdaq performance.

Sector focus: Following the gradual reopening economic activities, we believe traders will focus on recovery theme sectors such as tourism and gaming as well as aviation stocks. We noticed market participants have been trading actively on construction, property and O&G stocks as they are perceived to be playing a catch up in the short to mid-term. Besides, traders may look out for technology stocks tracking the gain in US.

The FBM KLCI ended below the EMA120 level with milder volume. Technical indicators have turned red as the MACD Histogram formed a red bar, while the RSI remained below 50. We expect the key index to trade sideways with the support pegged at 1,570, and the resistance level envisaged around 1,600-1,620.

Company Brief

AMMB Holdings Bhd’s (AmBank) 3QFY21 net profit fell 31.0% YoY to RM263.8m, due to higher allowance for impairment on loans, advances, and financing. Revenue for the quarter slipped 11.8% YoY to RM2.09bn.(The Star)

Heitech Padu Bhd has secured a RM33.9m contract to maintain and service the Immigration Department’s Malaysian Immigration System (myIMMs). The contract is for a period of 36 months commencing from 18th February 2021 to 17th February 2024. (The Star)

Advancecon Holdings Bhd's 30.0%-owned Advancecon Sarawak Sdn Bhd has accepted a letter of award from Wenan Steel (Malaysia) Sdn Bhd to be the main contractor for the earthworks of an iron and steel production complex in Bintulu, Sarawak, for RM153.5m. The contract shall commence from 15th March 2021 to 14th March 2022. (The Star)

Pharmaniaga Bhd has appointed Datuk Seri Mohamed Shazalli Ramly as the non independent non-executive chairman of Pharmaniaga Bhd effective 1st March 2021. Meanwhile, Boustead's executive director of group business development Izaddeen Daud has also joined the board of Pharmaniaga as a non-independent and non-executive director. (The Edge)

Top Glove Corporation Bhd’s executive chairman Tan Sri Dr Lim Wee Chai has purchased more shares of the group, as the counter fell to an eight-month low. Lim has raised his direct shareholding in the group to 26.4% or 2.11bn shares, after he acquired 4.0m shares at RM4.93 each. Lim also has an indirect stake of 8.7% or 692.2m shares in Top Glove. (The Edge)

Sime Darby Plantation Bhd has established an Expert Stakeholder Human Rights Assessment Commission, and appointed Impactt Ltd as a third-party assessor to conduct a comprehensive evaluation of the group’s labour practices across its Malaysian operations. For the stakeholder panel, the members include Shift (the leading centre of expertise on the UN Guiding Principles on Business and Human Rights), migrant worker rights activist and human rights researcher Andy Hall, and a representative of the National Union of Plantation Workers (NUPW). (The Edge)

Uzma Bhd is acquiring stakes in two renewable energy (RE) companies for RM5.4m, in a bid to enter the RE sector with a primary focus on solar energy. Uzma said it has entered into a conditional share sale agreement with Mohd Syahrul Nizar Abdul Ghani to acquire a 49.0% stake in Suria Infiniti Sdn Bhd and a 100.0% stake in Mahendran Surya Innovations Sdn Bhd. (The Edge)

Source: Mplus Research - 2 Mar 2021