Market Review

Malaysia: The FBM KLCI (+0.5%) snapped a 3-day losing streak, boosted by bargain hunting activities with more than two-third of the key index components finished higher today. The lower liners ended mostly higher, while the broader market closed fairly mixed.

Global markets: The US stockmarkets extended their losses after erasing all their intraday gains in the final trading hour as the Dow fell 0.01%, dragged by the weakness in technology shares. European stockmarkets closed mostly higher, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI managed to stage a recovery, despite the weaker-than-expected inflation data, but we remain cautious on the possible extended gains, given the prevailing uncertainties, coupled with the lack of fresh leads. Nevertheless, we think that the bargain hunting activities may emerge on selected beaten down stocks as investors’ risk appetite remains strong within the equities market (as defined by the surge in the recent oversubscription rates of IPO). Meanwhile, the rebound in crude oil prices may provide further alleviation to the market sentiment.

Sector focus: We expect the recovery-theme play may resume over the foreseeable future on the positive developments over the Covid-19 vaccine rollout in Malaysia. Also, the oil & gas counters may gain traction, following the surge in crude oil prices. Amidst the recent volatility, the utilities sector that is defensive in nature appears to be relatively attractive.

The FBM KLCI re-took the 1,600 psychological level after recovering all its intraday losses to finish mildly higher. Technical indicators, however, remained negative with the MACD Histogram extending another red bar, while the RSI is treading below 50. With the 1,600 level coming back into focus, any recovery is expected to be capped towards 1,624-1,645. Support will be set around 1,580, followed by 1,560.

Company Brief

Yong Tai Bhd, a property developer, has entered into a deal to undertake a gold mining project on a 100.0-ha. site in Lipis, Pahang. The company has entered into a mining agreement with Tengku Fahad Mua’adzam Shah ibni Almarhum Sultan Haji Ahmad Shah Al-Musta’in Billah and Amazing Logic Sdn to appoint YTB Land Sdn Bhd as the sole and exclusive mining operator to perform and undertake the exploration and exploitation works. Tengku Fahad is the registered holder of the mining lease, expiring on 11th May 2025 or until the gold deposits are exhausted. (The Star)

Gamuda Bhd has requested the trading of its shares to be suspended today to make way for a material announcement. The structured warrants relating to Gamuda will also be suspended today. (The Star)

Velesto Energy Bhd’s 4QFY20 net loss stood at RM493.3m, from a net profit of RM10.2m recorded in the previous corresponding quarter, mainly due to lower activities in both drilling and oilfield services segments. Revenue for the quarter shrank 44.4% YoY to RM99.1m. (The Edge)

Boustead Plantations Bhd’s 4QFY20 net profit stood at RM27.5m vs. a net loss of RM172.7m recorded in the previous corresponding quarter, on higher palm product prices. Revenue for the quarter grew 27.1% YoY to RM227.6m. A second interim dividend of 0.5 sen, payable on 28th April 2021 was declared. (The Edge)

UEM Sunrise Bhd’s 4QFY20 net loss stood at RM134.7m vs. a net profit of RM126.2m registered in the previous corresponding quarter, on lower contributions from joint ventures and associates, as well as additional impairment of assets due to Covid-19. Revenue for the quarter fell 47.4% YoY to RM611.6m. (The Edge)

Chairman of the Employees Provident Fund Tan Sri Ahmad Badri Mohd Zahir has taken over the chairmanship of RHB Bank Bhd, effective yesterday. Ahmad Badri will remain as the chairman of EPF. Ahmad Badri succeeds Tan Sri Azlan Zainol, who retired on 28th February 2021 after being with the group since 2005. (The Edge)

Property developer S P Setia Bhd has identified several potential areas for business diversification. Logistics, e-commerce, healthcare and assisted senior living are among the markets to be explored by the group. (The Edge)

Berjaya Corp Bhd's newly minted chief executive officer Abdul Jalil Abdul Rasheed has acquired 70.0m Berjaya Corp shares at 28 sen a share. The acquisitions give him a 1.4% stake in the diversified conglomerate. (The Edge)

Former executive director of Three-A Resources Bhd, Fang Siew Yee, has been convicted and sentenced for two offences related to insider trading by the Kuala Lumpur Sessions Court. Fang was sentenced to one-day jail and a fine of RM5.0m after she pleaded guilty to two separate charges of communicating inside information and acquiring shares when in possession of the said information. (The Edge)

Euro Holdings Bhd has proposed a bonus issue of up to 3.21bn shares, on the basis of four bonus shares for every one share held of which the entitlement date will be announced later. The bonus issue is expected to be completed by 2Q21. (The Edge)

Eco World Development Group Bhd (EcoWorld) wholly-owned subsidiary Eco World Capital Services Bhd has established a sukuk wakalah programme of RM500.0m in nominal value. The subsidiary has issued RM180.0m worth of sukuk wakalah with tenure of five years under the programme. Proceeds from the sukuk issuance will be used for repayment of several identified existing borrowings and working capital requirements. (The Edge)

Bintai Kinden Corp Bhd has signed a third distribution agreement with Korean cold chain equipment manufacturer firm SLAB Asia Co Ltd to supply its cold chain boxes for the storage and distribution of Covid-19 vaccines in Indonesia. Bintai Kinden's subsidiary Bintai Healthcare Sdn Bhd was appointed the exclusive distributor for the cold chain boxes in Indonesia after the parties signed a separate distribution agreement dated 15th March 2021. (The Edge)

Source: Mplus Research - 25 Mar 2021