Market Review

Malaysia: The FBM KLCI (-0.1%) snapped a four day winning streak as profit taking activities took precedence, but the weakness was largely cushioned by gains in selected gloves and telco heavyweights. The lower liners retreated, while the broader market were mostly red with the energy sector (-3.0%) taking a slump following the sharp pullback in oil prices.

Global markets: Wall Street trended mostly lower as the Dow fell 0.7% as concern over the rising inflation continues to weigh on sentiment. European stockmarkets were downbeat as the vaccination rollout progress took a backseat in several countries, while Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI finished the week mildly lower in line with the regional weakness last week and tracking the mixed sentiment on Wall Street overnight, we expect the local bourse to trade in a cautious mode as investors will monitor the status of the US bond yield, as well as the emergence of geopolitical tensions after North Korea cut off diplomatic ties with Malaysia. However, we expect recovery theme should remain intact at least for the near term. On CPO, we expect to see some rebound on following the recent pullback.

Sector focus: The rebound move on Nasdaq overnight may spill over to the local technology stocks, expecting some tech stocks to rebound higher for the week. Meanwhile, traders should focus on sectors (i.e. construction, manufacturing, logistics/ ports, building materials) that are potentially looking for a recovery trend as economic activities are opening up.

The FBM KLCI has seen a pullback following a four-session gain with higher volume. Technical indicators remained mixed as the MACD Histogram has extended another red bar, while the RSI is hovering in the overbought region. We expect the key index to trade in a consolidation mode, with resistance set at 1,650- 1,660, while support is pegged around 1,580-1,600.

Company Brief

Boustead Holdings Bhd has entered into a RM230.0m deal to dispose its entire stake in a cruise terminal in Klang, Selangor to new joint owners, Westports Holdings Bhd and MMC Corp Bhd. Westports will acquire a 50.0% equity interest in Boustead Cruise Centre Sdn Bhd (BCC) for RM115.0m cash, while MMC Corp, through a unit Klang Port Management Sdn Bhd will take the remaining 50.0% stake also for the same price of RM115.0m. The principal activity of BCC is the provision of port facilities and services to cruise and navy vessels. It is also the registered owner of nine parcels of land (including buildings and jetty) measuring approximately 69.8-ac in Klang. (The Star)

BP Plastics Holding Bhd has reported that one division of its plant in Sri Gading Industrial Area, Batu Pahat has been shut down by the Ministry of Health for 10 days until 28th March 2021, as 14 of its employees had tested positive for Covid- 19. Other divisions and plants are not affected, and that it does not expect any material impact from the temporary closure on its operations and financial performance. (The Edge)

FGV Holdings Bhd has announced that its chairman Datuk Wira Azhar Abdul Hamid has resigned, after helming the position in the plantations group for three and a half years. His resignation to pursue other interests comes soon after the failed attempt by the Federal Land Development Authority (Felda) to take over and privatise the plantations group. (The Edge)

Genting Malayia Bhd, through its unit Genting ER II LLC, is injecting another sum of up to US$20.0m (RM82.0m) into its US-based unit Empire Resorts Inc ny subscribing for an additional 200 Series L Preferred Stock. The group had previously injected US$40.0m into Empire Resorts in March 2020, and another US$150.0m in September 2020, also through subscription of preferred stocks in the latter. (The Edge)

Macpie Bhd, which is acquiring a 35.0% stake in Techninier Sdn Bhd has signed an agreement concerning deployment of services to eSukan.gg, a government linked e-sports portal. Macpie and Techninier are at various stages of discussion with several international and local enterprises for sponsorship deals concerning the eventual collaboration between the two companies for eSukan.gg. (The Edge)

NTPM Holdings Bhd’s 3QFY21 net profit soared 9.7x YoY to RM29.7m, on lower material costs, higher average selling price, and a gain on disposal of a subsidiary. Revenue for the quarter, however, slid 2.3% YoY to RM193.2m. A third interim dividend of 0.8 sen per share, payable on 30th April 2021 was declared. (The Edge)

Velesto Energy Bhd has clinched two contracts worth US$20.8m (RM85.3m) from Petronas Carigali Sdn Bhd for the provision of jack-up drilling services. The two jack-up rigs NAGA 2 and NAGA 5 will drill the offshore wells from 15th May 2021 to 15th June 2021, and 1st April 2021 to 14th April 2021 respectively. (The Edge)

Widad Group Bhd has completed its RM127.0m acquisition of Serendah Heights Sdn Bhd, which is a concession holder for the maintenance of the Universiti Teknologi MARA (UiTM) campus in Jasin, Melaka. The deal has boosted Widad’s order book to RM1.50bn. Separately, Widad has called off its proposed acquisition of Inovatif Mewah Sdn Bhd from Menang Corp Bhd for RM122.0m. Inovatif Mewah is a concession business managing UiTM’s Seremban 3 campus. (The Edge)

Source: Mplus Research - 22 Mar 2021