Market Review

Malaysia: The FBM KLCI (+0.7%) extended its gains after hovering in the positive territory for the entire trading session, underpinned by gains in banking heavyweights yesterday. The lower liners trended lower, but the broader market finished mostly higher, with the energy sector (+3.5%) continues to take the lead.

Global markets: The US stockmarkets ended on a mixed note as the Dow jumped 1.0% on the positive progress over the impending stimulus bill, but the selloff in technology stocks intensified and sent the broader market such as the S&P500 and Nasdaq lower by 0.5% and 2.4% respectively. European stockmarkets rebounded, while Asia stockmarkets ended mostly lower yesterday.

The Day Ahead

The FBM KLCI extended its winning streak and outperformed its regional peers as recovery play gained strength, offsetting the losses in glove heavyweights. The shift in investors’ interest to recovery play stocks, coupled with the selldown on Wall Street may continue to weigh on the technology sector. Commodity wise, the CPO price has surged near its 10-year high around RM3,963 per tonne level. Meanwhile, investors may look forward to Malaysia's unemployment rate today. At this moment, we believe the key index should hold above the 1,600 level.

Sector focus: We believe traders may put plantation stocks on their radar on the back of firmer CPO price, while recovery theme sectors such as consumer, gaming, aviation and transportation may continue to gain traction amid the decline in Covid- 19 confirmed. Besides, construction and property stocks could see some trading interest as they are the laggards as compared to the broader market.

The FBM KLCI closed above the 1,600 level for the second session. Technical indicators turned positive as the MACD Histogram has extended another green bar, while the RSI is hovering above 50. With that, we expect the FBM KLCI to sustain above 1,600, with the resistance set around 1,620, while the support is pegged around 1,580.

Company Brief

Magni-Tech Industries Bhd's 3QFY21 net profit rose 49.9% YoY to RM49.0m, on the back of higher revenue and a gain on disposal of properties. Revenue for the quarter added 17.3% YoY to RM367.8m. A dividend of 3.5 sen per share plus a special dividend of 1.0 sen per share, payable on 8th April 2021 was declared. (The Star)

Hextar Global Bhd has entered into a share sale agreement to acquire the entire equity interest in Chempro Group of Companies, a multinational hygiene specialty cleaning chemicals expert for RM138.0m. The agreement comes with a profit guarantee of RM39.0m over three years, which translates to a profit after tax of RM13m a year until the financial year ending 31st December 2023. The acquisition will be funded through a combination of internally generated funds and bank borrowings. (The Star)

Bintai Kinden Corp Bhd’s wholly-owned subsidiary Kejuruteraan Bintai Kindenko Sdn Bhd has bagged a RM9.8m contract from Tenaga Nasional Bhd (TNB) to undertake the asset replacement and refurbishment for transformer, earthing transformer and reactor to PMU 275/33 KV Grik. (The Edge)

Chin Hin Group Bhd has acquired a 31.2% stake in kitchen cabinet manufacturer Signature International Bhd for RM93.6m cash or RM1.17 per share. The acquisition is in line with its objective of acquiring strategic stakes in companies with potential for future growth. (The Edge)

TFP Solutions Bhd’s wholly-owned subsidiary MBP Solutions Sdn Bhd has inked a deal with SB Supplies & Logistics Sdn Bhd, the operator of the SugarBun restaurant franchise, to supply the latter with a suite of fintech services The value and duration of the contract, however, were not disclosed. (The Edge)

Favelle Favco Bhd has received orders for the supply of offshore and tower cranes amounting to RM101.4m from six clients. Its wholly-owned subsidiaries, Favelle Favco Cranes (M) Sdn Bhd and Favelle Favco Cranes Pty Ltd, have secured the orders since 1st December 2020. (The Edge)

MCE Holdings Bhd’s wholly-owned Multi-Code Electronics Industries (M) Bhd has secured contracts worth RM10.2m to supply various mechanical parts for new Perodua car models. The supply of these parts is expected to commence for duration of six years from 1QFY22. The estimated total investment cost to undertake the contracts is RM510,000. (The Edge)

Datasonic Group Bhd’s alternate director Safian Mohd Yunus has emerged as a substantial shareholder after acquiring 30.0m shares in the technology group via Hallmark Epitome Sdn Bhd. The acquisition raised Safian’s shareholding in the group to 142.5m shares or a 5.4% stake. (The Edge)

Complete Logistics Services Bhd has appointed Opcom Holdings Bhd’s non executive director Teh Li King as a non-independent and non-executive director effective yesterday. The logistics group also announced the resignation of its executive director Leon Law Li Yion, 28, effective yesterday, due to personal reasons. (The Edge)

Source: Mplus Research - 9 Mar 2021