Market Review

Malaysia: The FBM KLCI (+0.2%) managed to hold onto its gains after coming off from its intraday high as close to two-third of the key index components ended higher yesterday. The lower liners, however, extended their losses, while the broader market ended mixed with the energy sector (-2.5%) taking the heaviest beating after crude oil prices retreated.

Global markets: The US stockmarkets retreated overnight as the Dow slipped 0.5% after enduring a choppy trading session amid concern over the stretched valuations, particularly in technology shares. European stockmarkets ended mildly higher, but Asia stockmarkets finished mostly downbeat after the People Bank of China may consider deleveraging to contain the risk of assets bubble.

The Day Ahead

Bucking the downturn across the regional markets, the FBM KLCI ended modestly higher as continued selling in glove heavyweights were offset by buying support in IHH and selected banking heavyweights. We believe the local bourse should trade in an upward bias tone following the change of MCO status for Selangor, Johor, Penang and KL. Meanwhile, the number of Covid-19 confirmed cases daily has dropped to year-to-date low. However, note that the negative sentiment on Wall Street overnight could cap the upside potential on the local front.

Sector focus: We believe the news on the easing of travel restrictions would continue to attract buyers in the recovery theme stocks; traders may focus sectors such as consumer, poultry, and retailing as well as construction sector. Meanwhile, technology stocks may be lifted by UWC’s result.

The FBM KLCI declined for the third session and the technicals indicators were still slightly negative; MACD Line is still below zero, while the RSI remained below 50. Given the technical reading remained on the negative side, we expect the key index to further rangebound between support and resistance of 1,550-1,620, respectively.

Company Brief

Tenaga Nasional Bhd's subsidiary TNB Renewables Sdn Bhd has entered into a collaboration with Singapore-based Sunseap Group to tap into the renewable energy (RE) and corporate power purchase agreement market in Singapore. The partnership represents its first foray into Singapore's RE market and is an important milestone in the expansion of its international RE footprint into Southeast Asia. (The Star)

UWC Bhd’s 2QFY21 net profit jumped 104.7% YoY to RM27.2m, due to higher revenue recorded amid strong global demand in the semiconductor industry. Revenue for the quarter gained 41.6% YoY to RM77.8m. (The Edge)

Grand-Flo Bhd which has proposed to change its name from Grand-Flo to NCT Alliance Bhd is planning to buy two properties in Genting Highlands — the land and project development rights of an ongoing mixed development known as Grand Ion Majestic (GIM), and the adjacent serviced apartments and commercial lots of a completed project known as Grand Ion Delemen (GID) for RM422.9m. At the same time, it has proposed to undertake private placement exercises to raise over RM75.0m to fund its current and upcoming property development projects. (The Edge)

CB Industrial Product Holdings Bhd (CBIP) wholly-owned PalmitEco Engineering Sdn Bhd (PESB) has shut its manufacturing facility in Selangor until 11th March 2021, after 45 of its employees tested positive for Covid-19. The 14-day temporary closure of the manufacturing facility in Telok Panglima Garang started on 26th February 2021. (The Edge)

Advancecon Holdings Bhd wholly-owned unit Advancecon Infra Sdn Bhd (AISB) has been appointed a subcontractor for ground treatment works for Section 4 of the East Coast Rail Link (ECRL) project for RM14.6m. It is the second ECRL subcontract announced by AISB this year, and the fourth one since September 2020. (The Edge)

TH Heavy Engineering Bhd (THHE) has announced that the settlement amount agreed between the group and PTTEP Sarawak Oil Ltd (formerly known as Murphy Sarawak Oil Co Ltd) was about RM16.0m. (The Edge)

Techfast Holdings Bhd is proposing to diversify into the trading of petroleum products, oil bunkering, and other related businesses. The business diversification will reduce the company's sole reliance on its existing manufacturing business. (The Edge)

Kanger Holdings Bhd has bagged a contract to build two blocks of serviced apartments totalling RM478.0m in Genting Highlands. Its subsidiary Kanger Ventures Sdn Bhd, which has entered into a collaboration agreement with Vegetta Champion Sdn Bhd will be responsible for the entire project management, financial and entire administration of this development. The project is expected to commence in June 2021 and will take approximately 48 months to be completed. (The Edge)

Mieco Chipboard Bhd has proposed a 3-for-5 bonus issue which entails the issuance of 315.0m shares in the company. As at the last practicable date prior to the announcement, Mieco had an issued share capital of 525.0m shares amounting to RM215.9m. (The Edge)

Source: Mplus Research - 3 Mar 2021