Market Review

Malaysia: The FBM KLCI (+0.2%) rebounded as investors brushed off the downward projection of Malaysia GDP growth to 6.0% in 2021 by World Bank (from 6.7% projected earlier) as bargain hunting activities in selected telco heavyweights took shape. The lower liners also rebounded, while the broader market was mostly upbeat, led by the Transportation & Logistics sector (+2.3%).

Global markets: Wall Street extended its gains as the Dow jumped 1.4% to close above the 33,000 psychological level, boosted by US President Joe Biden efforts to double up the vaccination rollout programme. At the same time, both the European and Asia stockmarkets were fairly upbeat.

The Day Ahead

In line with the regional market improvements, the final-hour buying pushed the FBM KLCI into positive territory. The local market sentiment may extend its positive move on Wall Street last Friday, but the continued political developments may cap the upside potential on the local bourse. Meanwhile, oil price may see improvement amid concerns over Suez Canal blockage which may potentially lead to some supply disruptions. Moreover, market players may focus on shipping rates in the near term.

Sector focus: Given the setup above, we reckon the oil & gas counters may attract some buying interest, while the shipping industry could be on a lookout as market could be speculating higher shipping rates over the near term. Besides, traders may trade into vaccine related counters following the smooth Covid-19 vaccine rollout plan on the local front.

The FBM KLCI finished the week above the 1,600 psychological level after a volatile trading session. However, technical indicators remained negative as the MACD Histogram has extended another red bar, while the RSI was hovering below the 50 level. Further upside could be seen if the key index stayed above the 1,600 level with resistance pegged at 1,625-1,645; while support is set at 1,580 if the key index fell below 1,600.

Company Brief

Easter & Oriental Bhd has reported that Datuk Tee Eng Hong, one of its directors, has made a conditional mandatory general offer to buy out minority shareholders in the company for 60 sen a share. Tee, through his private investment vehicle Amazing Parade Sdn Bhd has acquired an additional 10.9% stake in the company from Sime Darby Bhd for 93.5m, or 60 sen a share. Together with other parties acting in concert, the offeror's stake in E&O has increased to 42.7%, triggering a conditional mandatory takeover offer. (The Star)

Mudajaya Group Bhd's wholly-owned subsidiary Mudajaya Corp Bhd (MCB) has executed an article of agreement with MRCB George Kent Sdn Bhd’s (MRCBGK) following the latter’s appointment as the turnkey contractor for the Light Rail Transit Line 3 (LRT3) project. The project includes works for the construction and completion of the LRT3 line from Bandar Utama, Petaling Jaya to Johan Setia, Klang. The revision of the project comprises the change of the design and scope of the LRT3 project, where a new revised contract price was agreed at RM655.0m. (The Edge)

Malayan Banking Bhd (Maybank) has come forward as a third party to contest a government forfeiture of approximately RM16.0m from the wife and children of former Tabung Haji chairman Datuk Seri Abdul Azeez Abdul Rahim and their family-linked company. Of the RM16.0m in cash and assets, Maybank, through its lawyer Poh Choo Hoe, is trying to contest the forfeiture of a shoplot near Sunway Geo Avenue. (The Edge)

Velesto Energy Bhd has secured a US$8.0m (RM33.2m) contract from ConocoPhilips Sarawak Ltd and ConocoPhilips Sarawak Oil Ltd for the provision of jack-up drilling services. The project, named NAGA 7, entails the drilling of up to three wells, with work tentatively scheduled to start in 1H21. (The Edge)

IOI Corp Bhd's 32.1%-owned associate Bumitama Agri Ltd will continue to invest in its infrastructure, and instead of expanding into new planting as the group will start to look into replanting areas with below-average yields and higher-than-expected costs to drive fresh fruit bunch production growth to ensure efficient use of the company's assets. (The Edge)

Cypark Resources Bhd's wholly-owned unit has been granted a 1.1MW biogas quota at a palm oil mill in Johor. The group wholly-owned Reviva Sdn Bhd was granted the quota at the Ulu Remis Palm Oil Mill in Layang-Layang by the Sustainable Energy Development Authority Malaysia, which will be sold at an approved rate stated in the feed-in-tariff. (The Edge)

Malton Bhd has signed a memorandum of understanding with Ho Wah Genting Bhd (HWGB) to potentially acquire a 14.0% stake in its wholly-owned electric vehicle (EV) unit HWGB EV Sdn Bhd. (The Edge)

Kimlun Corp Bhd's 4QFY20 net profit plunged 71.4% YoY to RM4.8m, due to lower contributions from its construction, property and investment divisions. Revenue for the quarter dropped 24.6% YoY to RM243.6m. A final dividend of one sen per share, with the payment date to be announced later was announced. (The Edge)

Hai-O Enterprise Bhd's 3QFY21 net profit grew 35.3% YoY to RM10.3m, thanks to better contributions from its multilevel marketing and wholesale divisions. Revenue for the quarter grew marginally by 0.3% YoY to RM67.2m. (The Edge)

Oriental Holdings Bhd’s 4QFY20 net profit surged 587.9% YoY to RM103.1m, thanks to better performance by its plantation segment. Revenue for the quarter rose 4.4% YoY to RM990.2m. (The Edge)

Subur Tiasa Holdings Bhd's 2QFY21 net profit rose 65.7% YoY to RM3.7m, on higher crude palm oil prices. Revenue for the quarter, however, slipped 0.3% YoY to RM84.1m. (The Edge)

Source: Mplus Research - 29 Mar 2021