Market Review

Malaysia: Late buying in Petronas-related and selected banking heavyweights sent the FBM KLCI (+0.6%) higher as the positive performance mirrored the gains across regional peers yesterday. The lower liners, however, retreated, while the broader market ended mixed with the Technology sector (+1.0%) anchoring the gainers list.

Global markets: The US stockmarkets ended mixed as the Dow added 0.3% on the back of gains from Boeing following the announcement of a large order, but the S&P 500 and Nasdaq slipped 0.1% and 0.6% respectively. Elsewhere, both the European and Asia stockmarkets ended mostly higher.

The Day Ahead

Mirroring the regional positive performance, the FBM KLCI extended last Friday’s gains as market sentiment was lifted by higher YoY trade surplus data announced yesterday. Meanwhile, Malaysia will retain its membership in FTSE World Government Bond Index. With Malaysia's Covid-19 daily confirmed cases falling below 1,000, the lowest since December 2020, we believe the local bourse is generally on an uptrend move, barring any unpredicted political developments. Commodities wise, the CPO price has seen some improvement following three days of pullback.

Sector focus: We expect traders may refocus on the recovery-theme sector such as construction, property and consumer following the declined Covid-19 daily confirmed cases. Besides, the improved CPO price may shine a light on the plantation counters, while we expect to observe that the technology stocks to rebound after the recent consolidation.

The FBM KLCI defended its position above the 1,600 psychological level after the eleventh-hour buying. Technical indicators turned mixed as the MACD Histogram has turned into a green bar, while the RSI was hovering below the 50 level. We expect the key index to trade higher over the near term with resistance pegged at 1,625-1,645; while support is set at 1,580-1,600.

Company Brief

The US Customs and Border Protection (US CBP) has claimed that certain products by Top Glove Corp Bhd had been manufactured with the use of forced or indentured labour. This finding applies to any merchandise described in Section II of the notice that is imported on or after 29th March 2021. (The Star)

Poly Glass Fibre (M) Bhd wholly owned subsidiary, Golden Approach Sdn Bhd (GASB) has formed a joint venture agreement with Malvest Properties Sdn Bhd (MPSB) for the construction of residential properties in Tanjung Malim, Perak. Under the JV, GASB will provide the use of approximately 182,000 sqm of its land adjacent to Proton City, while MPSB will be responsible to leverage its vast experience in property development and knowledge of Malaysian property landscape to conceptualise, develop, construct, market and sell the products through its established sales network. (The Star)

LKL International Bhd’s non-executive chairman Datuk Seri Dr Chen Chaw Min, who was appointed just less than a month ago, has resigned from his post, citing other personal commitments. The 60-year-old was appointed to the group's board on 1st March 2021. Meanwhile, LKL announced it would be appointing Zulkarnin Ariffin, 48, as its executive director. Zulkarnin is currently the CEO of Seacera Group Bhd. (The Edge)

PIE Industrial Bhd wholly-owned Pan-International Electronics (Malaysia) Sdn Bhd (PIESB) had temporarily closed its factories in Penang until 2nd April 2021 after some of its employees were tested positive for Covid-19 during the planned screening test. The company commended its planned precautionary Covid-19 testing on 23rd March 2021 for PIESB’s foreign and local employees. (The Edge)

FGV Holdings Bhd has appointed Datuk Dzulkifli Abd Wahab, the former director general of the Federal Land Development Authority (Felda), as its new chairman effective 1st April 2021. Dzulkifli, 65, will be replacing Datuk Wira Azhar Abdul Hamid, who has resigned to pursue other interests, after helming the position in FGV for three and a half years. (The Edge)

Evergreen Fibreboard Bhd’s 4QFY20 net loss widened to RM78.5m, from net loss of RM14.4m recorded in the previous corresponding quarter, mainly due to the impairments and write-offs on certain plant, machinery and inventories. Revenue for the quarter slipped 3.1% YoY to RM233.2m. (The Edge)

Tan Chong Motor Holdings Bhd will be settling its RM180.0m Royal Malaysian Customs Department bill out of court, by way of reduced bills of demand and compound amounting to RM109.0m. The settlement is subject to the finalisation of the terms of the consent order. (The Edge)

Nestle (Malaysia) Bhd expects the Covid-19 pandemic to weigh significantly on the market throughout 1H21, although the progressive rollout of vaccines will have a positive bearing on the health crisis. The company had projected a significant rebound in the prices of many key commodities that anticipates margin tensions and will continue to do its best to manage the situation. (The Edge)

AirAsia Group Bhd’s 4QFY20 net loss widened to RM2.44bn, from a net loss of RM384.5m recorded in the previous corresponding quarter, after the low-cost carrier booked a series of impairments. Revenue for the quarter sank 92.0% YoY RM267.4m. (The Edge)

Deleum Bhd’s 4QFY20 net profit fell 12.5% YoY to RM7.5m, following a slowdown in activity levels across all its business segments. Revenue for the quarter declined 32.3% YoY to RM157.2m. (The Edge)

Pos Malaysia Bhd has announced that Datuk Yasmin Mahmood has resigned as the chairman of the group effective 1st April 2021, after serving the company for two years. The group indicated she will be replaced by Datuk Seri Syed Faisal Albar. Syed Faisal, 55, is currently group managing director of DRB-Hicom Bhd and served as group managing director of Pos Malaysia from 2008 to 2011. (The Edge)

George Kent (Malaysia) Bhd has been invited by Johan Holdings Bhd to buy a 40.0% stake in the latter's subsidiary, Dynacare Sdn Bhd, for RM40.0m. George Kent and Johan share the same major shareholder — Tan Sri Tan Kay Hock. Dynacare will work on constructing a manufacturing plant to make gloves for two years, with a global contract sum of RM624.1m. (The Edge)

Ranhill Utilities Bhd’s 4QFY20 net loss stood at RM10.0m, from a net profit of RM8.0m registered in the previous corresponding quarter, hit by lower earnings from its water supply segment, and changes in accounting treatment for its power purchase agreements. Revenue for the quarter, however, gained 13.4% YoY to RM355.8m. (The Edge)

Source: Mplus Research - 30 Mar 2021