Market Review

Malaysia: The FBM KLCI (-0.5%) retreated alongside with the weakness across regional peers with close to two-third of the key index components ended in the red yesterday. The lower liners also ended lower, while the broader market ended mostly negative with the technology sector (-1.9%) underperformed, following the rout on Nasdaq overnight.

Global markets: The US stockmarkets suffered another setback as the Dow (-1.1%) extended its losses or the third straight session with treasury yields continue to ascend, whilst the Nasdaq (-2.1%) erased its YTD gains. European stockmarkets finished mostly lower, while Asia stockmarkets ended on a negative tone.

The Day Ahead

The FBM KLCI settled in red in tandem with the regional peers as selling pressure in the glove stocks returned, offsetting the gains on the banking heavyweights following the unchanged Overnight Policy Rate (OPR) by Bank Negara Malaysia. Tracking the losses on Wall Street overnight, we expect the local bourse may continue to consolidate further as market players are likely to trade on a cautious tone on the broader market. Nevertheless, we expect traders to position themselves for the recovery theme as Covid-19 vaccination is taking place. Meanwhile, the Brent oil price has surged firmly above USD65.

Sector focus: Given the negative backdrop on Nasdaq, we reckon traders will shift the focus from technology stocks to O&G stocks given the firm Brent oil price. Meanwhile, recovery theme sector will be focused and we expect funds will lookout for banking, insurance, telco, transportation, construction and property sectors today.

The FBM KLCI has seen a pullback, snapping its two-day gains. Technical indicators remained mixed as the MACD Histogram extended another green bar, but the RSI is hovering below 50. Further consolidation might take place with support level pegged at 1,550 and resistance at 1,600-1,620 over the near term.

Company Brief

PPB Group Bhd plans to expand its grains and agribusiness segment especially its flour milling capacity in Malaysia and other countries in the region. As for now, the group is in the midst of constructing a new wheat flour mill in Quang Ninh Province in Vietnam which has the capacity to produce 500T/d and is slated to be completed by 3Q2021. (The Star)

Tenaga Nasional Bhd wholly-owned subsidiary TNB Renewables Sdn Bhd will buy a 39.0% stake in a 21.6MW project comprising five rooftop solar power plants in Vietnam from Singapore's Sunseap Group. The acquisition will serve as a beachhead for TNB to establish a local presence in Vietnam and expand into the rapidly growing renewable energy (RE) and utility market there. TNB's statement, however, did not specify the acquisition price and where the solar power plants are located. (The Edge)

Sasbadi Holdings Bhd has inked an RM722,400 contract with the Community Development Department (KEMAS) to publish, design, print, bind, supply and deliver the English activity book for six-year-old nursery care centre children. The period of the contract is from 1st March 2021 to 28th February 2023. (The Edge)

Sunway Bhd has set a sales target of RM1.60bn for its property division in 2021, as the group launches RM2.80bn worth of properties in anticipation of an economic recovery, amid the global Covid-19 vaccine rollout. 40% or RM1.10bn worth of the property launches will be in the Klang Valley, including Sunway Belfield in Kuala Lumpur city centre with a gross development value of RM320.0m. (The Edge)

MPHB Capital Bhd has received an unusual market activity query from Bursa Malaysia over the sharp rise in the company’s share price. The stock exchange regulator asked the company if there were any corporate developments relating to its business that had not been announced. (The Edge)

Lotte Chemical Titan Holdings Bhd sees a brighter outlook for the company, thanks to a continued uptrend in average selling prices of polymer products. The strong prices are expected to either hold or increase, mainly buoyed by brightening economic recovery prospects with global vaccination roll-outs, complemented by a sudden polymer supply shortage in the Southeast Asian region caused by ongoing shipping container issues which curtailed imported polymer supplies from other regions. (The Edge)

Source: Mplus Research - 5 Mar 2021