Market Review

Malaysia: The FBM KLCI (-0.6%) extended its losses after hovering mostly in the negative territory with more than two-third of the key index components finished in the red yesterday. The lower liners also ended mostly lower, while the Property (+0.5%) and REIT (+0.3%) sectors outperformed the negative broader market.

Global markets: Meanwhile, the US stockmarkets rebounded as the Dow rose 0.3% on gains in technology shares after the 10Y treasury yields retreated from 14 months peak. European stockmarkets ended mostly higher, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI retreated for the second session in line with the regional weakness. Mirroring overnight gains on Wall Street, Nasdaq in particular, we reckon there will be some bargain hunting activities emerging on the local bourse despite cautious market sentiment amid continued political developments. Commodities wise, Brent oil price remain sideways while crude palm oil price surged. On a side note, another batch of Sinovac Covid-19 vaccine arrived yesterday in the country.

Sector focus: We believe buying interest could emerge in the technology sector following the overnight rally in Nasdaq. Besides, traders may put plantation stocks or the proxies such as process equipment players on their radar given the surge in CPO price. Meanwhile, we believe the recovery theme sectors such as consumer products, transportation and logistics, and construction will still be favourable moving forward.

The FBM KLCI slid into negative territory during the eleventh trading hour. Technical indicators remained mixed as the MACD Histogram has extended another red bar, while the RSI remained above the 50 level. We believe the key index should trade in consolidation over the near term, with resistance set at 1,650, while support is pegged around 1,580-1,600.

Company Brief

Pharmaniaga Bhd’s unit will supply 200,000 doses of the Covid-19 vaccine to the Ministry of Health (MoH) which was developed and manufactured by China’s Sinovac Life Sciences Co. Ltd. The agreement and collaboration would serve as a platform for it to further strengthen its vaccine business and grow the sector in Malaysia. (The Star)

Bursa Malaysia has issued an unusual market activity (UMA) query to CYL Corporation Bhd following the sharp rise in its share price and trading volume recently. CYL is set up as an investment holding company, whereby its sole subsidiary Perusahaan Jaya Plastik (M) Sdn Bhd is principally involved in the plastics packaging industry. (The Star)

Tan Sri Mokhzani Mahathir has been appointed the new chairman of Maxis Bhd effective 22nd April 2021. The appointment comes as its current chairman Raja Tan Sri Arshad Raja Tun Uda decides to step down after 11 years of chairing the company since its listing in 2009. (The Edge)

Top Glove Corp Bhd executive chairman Tan Sri Dr Lim Wee Chai has bought additional 1.7m shares of the group at RM5.27 a share, raising his shareholding in the glovemaker to 2.13bn shares or 26.6%. Lim also has an indirect stake of 692.2m shares or 8.7% in the group. (The Edge)

Comfort Gloves Bhd managing director Cheang Phoy Ken has ceased to be a substantial shareholder in the company, after selling 32.0m shares or a 5.5% stake in the glovemaker, off-market. The disposal was carried out on 18th March 2021 at RM2.40 per share, for a total of RM76.8m. This represents a premium of 23 sen or 10.6% to the counter's closing price of RM2.17 on that day. (The Edge)

Boustead Holdings Bhd is seeking consent from the holders of its RM2.50bn sukuk to allow the submission of financial statements by 31st May 2021. The move is in tandem with the one-month extension granted to all listed issuers by the Securities Commission and Bursa Malaysia for the issuance of quarterly and annual reports which are due on 28th February 2021 and 30th April 2021 respectively. (The Edge)

AirAsia Group Bhd (AAGB), which is in the midst of raising fresh capital to ease tight cash flow, announced that it has entered into a memorandum of understanding with Aimia Holdings UK II Ltd to buy the remaining 20% equity interest in BigLife Sdn Bhd held by the latter for RM103.04 m. The low cost carrier said the acquisition will be settled by issuing 85.86 m new AirAsia Group shares, which is equivalent to a 2.2% stake, to Aimia at RM1.20 per share. (The Edge)

MMC Corp Bhd is acquiring Tradewinds Corp Bhd's 50.0% stake in developer Retro Highland Sdn Bhd for RM250.0m cash, in a related-party transaction. The acquisition price is inclusive of RM55.0m in shareholder's loans advanced by Tradewinds to Retro Highland, including interest, according to the group. Retro Highland is a 50:50 joint venture between Tradewinds and S P Setia Bhd. (The Edge)

CB Industrial Product Holding Bhd’s 4QFY20 net profit surged 178.2% YoY to RM29.8m, thanks to its oil palm plantations segment following the higher prices of palm products. Revenue for the quarter climbed 10.9% YoY to RM173.5m. A second single tier interim dividend of two sen per share was announced. (The Edge)

The takeover offer of Pimpinan Ehsan Bhd (PEB) at a cash offer price of RM1.07 a share by Pitahaya (M) Sdn Bhd is deemed not fair and not reasonable, according to independent adviser TA Securities Holdings Bhd. PEB’s four non-interested directors Shamsiah Hashim @ Abu Bakar, Ibrahim Topaiwah, Jumsi Batri and Mohammad Emir Taufiq Ahmad @ Ahmad Mustapha concurred with the adviser’s evaluation and recommendation to reject the takeover offer. (The Edge)

The suspension of Lay Hong Bhd's production from its Jeram 1 farm in Selangor was lifted as all of the group's farms are declared free of Salmonella Enteritidis (SE). The test conducted by the Department of Veterinary Services (DVS) at all farms returned with negative results for the disease. (The Edge)

GHL Systems Bhd is partnering with fintech company Split to offer a buy now, pay later (BNPL) service for its merchant base in Malaysia. This new service will allow businesses to offer their customers instalment payments with a choice of up to three monthly instalments sale. (The Edge)

Ann Joo Resources Bhd's 4QFY20 net profit slipped 68.2% YoY to RM6.2m, on the back of lower revenue due to lower sales tonnage and higher overhead cost amid plant shutdowns due to Movement Control Order restrictions. Revenue for the quarter fell 10.7% YoY to RM539.4m. (The Edge)

George Kent (M) Bhd's 4QFY21 net profit jumped 111.4% YoY to RM14.3m, boosted by higher share of results of joint venture in its engineering division. Revenue for the quarter grew 6.6% YoY to RM87.8m. A dividend of 1.5 sen per share, payable on 28th April 2021 was declared. (The Edge)

Harn Len Corporation Bhd’s 4QFY20 net loss narrowed to RM80,000, from net loss of RM31.4m recorded in the corresponding quarter, due to higher average selling prices of crude palm oil and palm kernel. Revenue for the quarter, however, fell 9.2% YoY to RM39.1m. (The Edge)

Source: Mplus Research - 23 Mar 2021