Market Review

Malaysia: The FBM KLCI (+0.8%) trended higher for the third straight session as the gains were largely boosted by Tenaga (+30.0 sen) and Top Glove (+15.0 sen) after the latter has delivered another set of record earnings. The lower liners edged mostly higher, while the broader market was mostly upbeat.

Global markets: Wall Street edged higher as the Dow (+0.1%) recorded its third day winning streak, whilst the S&P 500 (1.5%) and Nasdaq (+3.7%) rebounded, driven by the recovery in technology stocks. European stockmarkets extended their gains, while Asia stockmarkets ended mostly higher yesterday.

The Day Ahead

As the economic recovery is taking shape following the declining of Covid-19 cases, the FBM KLCI continued its upward march; the key index is hovering steadily above the 1,600 psychological level. Meanwhile, tracking the strong rebound in tech heavyweights on Wall Street, we expect bargain hunting activities to emerge on the local technology stocks, which have been hammered down over the past week. Also, the CPO price has been trading firmer near the RM4,000 level.

Sector focus: Given the rebound in Nasdaq, market players may position themselves in the tech sector, while continue to pick up on laggard counters in the recovery-themed sectors, such as gaming, aviation, consumer, construction and property. Besides, we should expect see some buying interest in plantation counters amid firmer CPO prices.

The FBM KLCI found a firmer footing above the 1,600 psychological level after breaking firmly above resistance level around 1,620. The technical indicators remained positive as the MACD Histogram has extended another green bar, while the RSI is hovering above 50. We expect the upward trend to continue, with the resistance pegged around 1,645, followed by 1,660; while the support is envisaged around 1,600-1,620.

Company Brief

Top Glove Corporation Bhd’s 2QFY21 net profit soared 24.8x YoY to RM2.87bn, owing to higher sales output, high utilisation levels which amplified production efficiency, coupled with higher average selling prices. Revenue for the quarter jumped 336.3% YoY to RM5.37bn. A dividend payout of 25.2 sen per share, payable on 6th April 2021 was declared. (The Star)

Scientex Bhd's 2QFY21 net profit climbed 15.1% YoY, supported by its property projects in Johor and Melaka, that offset the lower contribution from the packaging business due to rising raw material and freight costs. Revenue for the quarter, however, slipped marginally by 0.9% YoY to RM906.6m. (The Star)

Daibochi Bhd’s 2QFY21 net profit rose 3.2% YoY to RM15.1m, on improved operating cost. Revenue for the quarter added 1.5% YoY to RM161.3m. (The Star)

Malaysian Resources Corporation Bhd (MRCB) is making its foray into New Zealand by teaming up Panuku Development Auckland to undertake a transport orientated development (TOD) there with a gross development value of NZ$452.0m (RM1.3bn). MRCB will jointly develop the Aotea Central Over Station Development (OSD) in Auckland City centre. The new development will be a 21- storey building with a mixture of retail and commercial space and 63 luxury apartments with integrated access to Aotea Station. The OSD will begin after the construction of the city rail link’s Aotea Station, which is due to be completed in 2024. (The Star)

Serba Dinamik Holdings Bhd has secured an operations and maintenance (O&M) contracts and three information, communication & technology (ICT) jobs worth US$99.6m (RM408.8m). Its unit, SDIT International Ltd bagged an ICT contract while its 49.0% associate Serba2C India Private Limited secured two ICT contracts in India. Its 75.0% owned PT Serba Dinamik Indonesia secured one O&M contract. (The Star)

KESM Industries Bhd’s 2QFY21 net profit jumped 238.5% YoY to RM6.3m, following gain on disposal of machinery and test equipment of RM3.1m, and fair value gain on investment in securities of RM2.8m. Revenue for the quarter gained 25.3% YoY to RM68.0m. (The Edge)

Star Media Group Bhd has appointed Tan Sri Chor Chee Heung as its independent and non-executive chairman, effective 15th March 2021. Chor, 66, will replace Datuk Fu Ah Kiow, who resigned as the group’s director and chairman on 1st March 2021. (The Edge)

Complete Logistic Services Bhd saw businessman Datuk Eddie Ong Choo Meng emerging as the largest shareholder after acquiring 29.2% or 37.5m shares from Dolphin Assets Sdn Bhd in an off-market transaction yesterday. Ong's representative Teh Li King was appointed to Complete Logistic's board as a non independent and non-executive director effective 8th March 2021. (The Edge)

Media Prima Bhd saw former second finance minister Datuk Seri Johari Abdul Ghani emerging as a shareholder after he bought 109.7m shares in the open market through his private investment vehicle JAG Capital Holdings Sdn Bhd. Johari now has a direct 5.0% or 55.0m shares, and indirect 4.9% or 54.7m shares, following a series of acquisitions. (The Edge)

MMAG Holdings Bhd, the owner of Line Clear Express & Logistics Sdn Bhd, has invested RM8.2m for a 9.9% in builder Dynaciate Group Bhd. MMAG has acquired 65.9m new Dynaciate shares at 12.4 sen each via a private placement exercise. (The Star)

Kanger International Bhd will receive 10,000 doses of a Covid-19 vaccine developed by China’s state-owned China National Pharmaceutical Group Corp (Sinopharm). The 10,000 doses of the vaccine will be for trial purposes and that it will be getting the necessary approvals from the relevant authorities. (The Edge)

Komarkcorp Bhd has received a letter of intent from Poland-based Robayu Corp to export 48.0m pieces of three-ply medical-grade masks to the US. The order is expected to be valued at US$4.8m to mirror European pricing counterparts, and will be carried out over 12 months. (The Edge)

Source: Mplus Research - 10 Mar 2021