Market Review

Malaysia: The FBM KLCI (-1.3%) trended lower for the third straight session and the key index slipped below the 1,600 psychological level with weakness largely in tandem with the negative sentiment across regional peers. The lower liners were downbeat, but the Technology sector (+0.7%) was the sole outperformer on the broader market.

Global markets: Wall Street suffered another setback as the Dow fell 0.9%, dragged down by the sudden spike in global Covid-19 cases may derail the pace of economic recovery. European stockmarkets ended mostly lower, while Asia stockmarkets ended mostly lower on new rounds of sanctions in China following the violation of human rights in Xinjiang.

The Day Ahead

The FBM KLCI extended its losing streak for the third straight session, despite the earlier positive momentum on Wall Street. Although bargain hunting may emerge in certain bashed-down stocks, but we believe the upside may be capped in the near term as investors may trade in a cautious mode given the overnight losses at Wall Street amid concerns over US bond yield, weaker oil price and intensifying Covid-19 cases in Europe. Meanwhile, the CPO price has continued its uptrend move.

Sector focus: We opine that the recovery theme could take a pause for now after the recent relief rally amid weaker sentiment across the globe. Meanwhile, we reckon there will be some buying support plantation counters or process equipment companies amid firmer CPO price. Also, semiconductor counters may perform a rebound on the back of stronger demand and production for chips.

The FBM KLCI finished below the 1,600 psychological level after hovering in the negative territory for the entire trading session. Technical indicators have turned negative with the MACD Histogram extending another red bar, while the RSI has fallen below 50. Given the key index has fallen below the 1,600 level, the next support will be set around 1,580, followed by 1,560, while the resistance is pegged at 1,600-1,625.

Company Brief

Uzma Bhd has secured a three-year contract from Petronas Carigali Sdn Bhd worth RM180.0m. The contract is for the provision of non-rig assisted (NRA) electric wireline logging (EWL) equipment and services for West Malaysia and East Malaysia (optional scope) waters for downhole logging, perforation and well integrity evaluations. The duration of the contract started from 3rd March 2021 until 2nd March 2024. (The Star)

PDZ Holdings Bhd is planning a scheme to raise as much as RM100.0m for its glove manufacturing venture. To raise fund for the proposed new business, the company has proposed a series of corporate exercise. First, PDZ has proposed to consolidate its existing shares and warrants on the basis of 10 units into one unit. It will then proceed with the plan to issue new rights shares and free warrants on the basis of six new rights shares and three new warrants for every one consolidated share at a later date. (The Star)

TH Plantations Bhd’s 4QFY20 net profit stood at RM1.6m vs. a net loss of RM11.5m, due to rising prices of crude palm oil. Revenue for the quarter grew 6.1% YoY to RM144.5m. (The Star)

Poh Kong Holdings Bhd’s 2QFY21 net profit rose 6.7% YoY to RM11.4m, boosted by higher gold prices and cost control initiatives. Revenue for the quarter, however, declined 8.2% YoY to RM231.4m. (The Star)

Former transport minister Tan Sri Chan Kong Choy has been made the chairman of Fajarbaru Builder Group Bhd, as part of a slew of boardroom changes announced by the company yesterday. Chan, 66, will take over from Datuk Low Keng Kok on 1st April 2021, following the announcement of Low's resignation to pursue his personal interest. Meanwhile, group executive director Datuk Seri Kuan Khian Leng, 45, is redesignated as group chief executive officer. (The Edge)

Former second finance minister Datuk Seri Johari Abdul Ghani has emerged as the second largest shareholder of Media Prima Bhd after acquiring another 54.4m shares in the group yesterday. Following the acquisition made through his private investment vehicle JAG Capital Holdings Sdn Bhd, Johari now has a direct holding of 15.2% or 168.0m shares. He also has an indirect holding of 4.9% or 54.7m shares. (The Edge)

Sin Heng Chan (Malaya) Bhd's proposed acquisition of facility management and construction outfit Tunas Selatan Pagoh Sdn Bhd (TSP) for RM145.9m in a related party transaction has been deemed fair and reasonable by independent adviser Mercury Securities Sdn Bhd. The proposal entailed a cash payment of RM70.0m via borrowings, and issuance of ordinary and preference shares worth a combined RM75.9m, as consideration for TSP to Tunas Selatan Construction Sdn Bhd. (The Edge)

Industronics Bhd has entered into a non-binding memorandum of understanding (MoU) with Hong Kong's Bluemount Financial Group Ltd and its shareholder and director Li Hok Yin today to further discuss and negotiate the terms and conditions with regard to the proposed acquisition of Bluemount shares for the purpose of venturing into the financial services industry, specifically exploring the fintech industry. Industronics said the MoU shall be valid and remain in effect for a period of one year from the date of the MoU. (The Edge)

WCT Holdings Bhd's wholly-owned subsidiary, WCT Bhd, has bagged a RM440.0m contract from the Ministry of Transport to undertake the proposed extension and upgrading of the Sultan Ismail Petra Airport in Kota Bahru, Kelantan. The work under the contract is expected to commence in April 2021 and to complete in April 2024. (The Edge)

Techfast Holdings Bhd has secured a contract worth RM540.0m to supply marine gas oil products to Huang Fan Sdn Bhd. Its wholly-owned subsidiary Fast Energy Sdn Bhd entered into a supply agreement today with Huang Fan for the contract to supply up to 6.0m litres of the products each month to the group for the consumption of its vessels. (The Edge)

Landmarks Bhd’s 4QFY20 net profit stood at RM115.5m vs. a net loss of RM61.6m recorded in the previous corresponding quarter, amid a one-off gain disposal and fair value gain on an investment. Revenue for the quarter, however, sank 79.8% YoY to RM6.7m. (The Edge)

Green Packet Bhd’s 4QFY20 net loss narrowed to RM20.2m, from a net loss of RM26.1m recorded in the previous corresponding quarter, helped by a fall in finance cost. Revenue for the quarter, however, fell 18.8% YoY to RM163.8m. (The Edge)

Source: Mplus Research - 24 Mar 2021