Market Review

Malaysia: The FBM KLCI (+1.2%) recovered all its previous session losses, boosted by gains in banking and gloves heavyweights. The lower liners closed mixed, while the broader market finished mostly higher, led by the energy sector (+3.2%) after crude oil prices surged to the highest level since January 2020.

Global markets: The US stockmarkets delivered a solid performance as the Dow (+1.9%) snapped a three-day pullback following the easing of business restrictions in certain states due to decline in Covid-19 cases, coupled with the strong jobs data with unemployment rate falling to 6.2% in February 2021. European stockmarkets were downbeat, while Asia stockmarkets ended mostly in the red.

The Day Ahead

Last Friday, the FBM KLCI bucked the losses on Wall Street and surged above the 1,600 psychological level; the continued buying interest in banking heavyweights after BNM’s decision to remain the OPR, coupled with the gains in energy stocks spurred the key index rally. We reckon the positive momentum of the key index to continue as the rallies in the banking sector may indicate market’s hope for economic recovery. Meanwhile, the Brent oil price continued seeing its uptrend after OPEC and its allies decided to keep production steady through April.

Sector focus: Given the setup above, we believe the energy sector is likely to continue its uptrend move amid firmer Brent oil prices. Besides, technology stocks may be sought after by bargain hunters after the sharp decline. Also, do note that that traders may focus on the recovery theme segments such as gaming, tourism, construction and property following the decline in daily Covid-19 confirmed cases.

The FBM KLCI marched higher to close marginally above the 1,600 psychological level. We believe the positive market sentiment will continue to push the key index higher over the near term. The RSI has hooked above 50; indicating that the current momentum is positive. If the key index could sustain above 1,600, the next resistance is pegged at 1,620; while the support will be located around 1,550-1600.

Company Brief

Axis Real Estate Investment Trust (Axis REIT) has acquired a piece of 20.8-ac. industrial property in Shah Alam, Selangor for RM120.0m cash. This includes a steel factory and a warehouse with total lettable area of 326,231 sqf. FIW Steel will be the sole tenant with a tenancy for one year with an option to renew for another four terms of three months each with the monthly rental for the first year will be RM416,666.67 and RM608,333.34 for the renewed terms. The proposed redevelopment will only be considered post completion of the sale and purchase agreement and after the expiry of the tenancy with FIW. (The Star)

IHH Healthcare Bhd is exploring a sale of its medical education arm International Medical University (IMU). The company is working with Rippledot Capital Advisers on the potential deal. A sale of the education unit could fetch about US$300.0m (RM1.22bn). (The Edge)

Notion VTech Bhd has officially incorporated a wholly-owned subsidiary in the United Arab Emirates named Notion Pacific Ltd. The proposed principal activity of the new unit is to trade metals and metal ores, and sell liquefied natural gas and other energy products in the international market. (The Edge)

Acoustech Bhd has disposed of a parcel of leasehold land in Johor for RM6.4m. The group wholly-owned subsidiary Teras Eco Sdn Bhd had entered into a sale and purchase agreement with Pegasus Advance Engineering Sdn Bhd for the disposal of the land located at Tanjung Surat, Kota Tinggi measuring 3.2-ac. (The Edge)

HeiTech Padu Bhd has entered into an unincorporated joint venture agreement with Regal Orion Sdn Bhd for the construction of a Tier IV data centre at an unused portion of land owned by the former in Shah Alam. The project entails the proposed construction, commissioning and testing of the data centre, which comprises a five-storey building with racks to be tenanted upon completion by international or multinational tenants or occupiers. (The Edge)

Artroniq Bhd has received an unusual market activity query from Bursa Malaysia, as its share price jumped 24.5 sen or 30.43% on last Friday. The counter was actively traded with volume surging to a three-month high of 61.3m shares. (The Edge)

Source: Mplus Research - 8 Mar 2021