Market Review

Malaysia: The FBM KLCI (-2.2%) suffered a beating at the final trading day of 1Q21 with all 30 components of the local bourse ended in the red as the key index erased its monthly gains to close -0.3% MoM. The lower liners extended their losses, while the Property sector (+0.1%) was the sole outperformer on the broader market.

Global markets: The US stockmarkets finished mixed as the Dow (-0.4%) extended its losses, but the gains in technology shares boosted S&P 500 (+0.4%) and Nasdaq (+1.5%) higher. European stockmarkets were downbeat, while Asia stockmarkets finished mostly lower.

The Day Ahead

The FBM KLCI tumbled over 2.2% as investment jitters mounted over US bond yields surge and political uncertainties on the local front; the healthcare sector took the biggest downfall on continued selling in glove counters. However, we think the FBM KLCI is steeply oversold, bargain hunting may emerge over the near term tracking Wall Street overnight gains on technology stocks. We believe the broader market may recover, but we expect the rebound to be short lived and traders may adopt selling into strength strategy. Meanwhile, the CPO price rose on solid exports data for March 2021.

Sector focus: With the Nasdaq rising 1.5%, the buying support could spillover to tech stocks on the local front. On the recovery theme, we expect traders may lookout for stocks under the property and construction sectors as they are deemed as some of the laggards in the broader market. Also, we noticed selected transportation & logistics stocks such as FREIGHT and TASCO are having some decent trading interest.

The FBM KLCI (-2.2%) slid into the negative region and broke the support at 1,580 support level. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI dipped lower for the session. We believe the key index may perform a technical rebound, with the resistance pegged at 1,600-1,625, while the next support is set around 1,550-1,560.

Company Brief

Boustead Holdings Bhd’s 4QFY20 net loss narrowed to RM352.3m, from a net loss of RM1.12bn recorded in the previous corresponding quarter, lifted by significantly lower impairment of property, plant and equipment, right-of-use assets and goodwill. Revenue for the quarter, however, fell 12.6% YoY to RM2.21bn. (The Star)

Sapura Energy Bhd's wholly-owned unit Sapura TMC Sdn Bhd is making an early redemption of sukuk murabahah under its RM7.00bn multi-currency sukuk programme. According to Bank Negara Malaysia’s Fully Automated System for Issuing/Tendering (FAST) website, Maybank Investment Bank Bhd posted the announcement on behalf of the company. (The Edge)

Paragon Globe Bhd, whose share price hit limit up yesterday, has received an unusual market activity (UMA) query from Bursa Malaysia over the sharp rise in the company’s share price. The stock surged 29.5 sen or 33.0% to a more than two year high of RM1.19. (The Edge)

Cypark Resources Bhd’s 1QFY21 net profit rose 3.0% YoY to RM15.0m, on the back of interest cost savings and lower staff expenses. Revenue for the quarter, howeber, fell 15.8% YoY to RM76.5m. (The Edge)

MCE Holdings Bhd wholly-owned subsidiary Multi-Code Electronics Industries (M) Bhd has secured contracts to supply various mechanical parts for new Toyota car models. The car parts manufacturer expects the supply of the parts to commence in the fourth quarter ending 31st July 2022 for a duration of six years. (The Edge)

Widad Group Bhd’s 4QFY20 net loss narrowed to RM488,000, from a net loss of RM6.1m recorded in the previous corresponding quarter, supported by a swing to tax gains. Revenue for the quarter, however, slipped 65.2% YoY to RM23.9m. (The Edge)

Berjaya Corp Bhd’s CEO Abdul Jalil Abdul Rasheed has bought an additional 66.0m shares, raising his stake in the loss-making diversified group to 2.7% or 136.0m shares. (The Edge)

Dancomech Holdings Bhd has revised its dividend policy to reflect a payout ratio of up to 40.0% of its annual consolidated profit attributed to shareholders, from up to 30.0% previously. The revision, however, is subject to a number of factors including the company's cash and indebtedness level, required and expected interest expense, cash flow, profits and return on equity and retained earnings, expected results of operations and future level of operations, and projected levels of capital expenditure. (The Edge)

Sunway Bhd’s 4QFY20 net profit rose 5.2% YoY to RM193.1m, thanks to the recognition of a balance of development profits. Revenue for the quarter, however, declined 5.8% YoY to RM1.28bn. (The Edge)

Dagang NeXchange Bhd (DNeX) has teamed up with Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center (Limited Partnership), also known as CGP Fund to acquire Khazanah Nasional Bhd's loss-making semiconductor unit for RM273.0m cash. DNeX will take up a 60.0% stake in SilTerra Malaysia Sdn Bhd for RM163.8m while CGP Fund will acquire the remaining 40.0% for RM109.2m. (The Edge)

LBS Bina Group Bhd has inked a Joint-Venture Agreement (JVA) with the Cameron Highlands District Council for a mixed development project with a gross development value (GDV) of RM1.5.0bn in Tanah Rata, Cameron Highlands. The project spans an area measuring 51.3-ac stretching from the Kea Farm to the Time Tunnel Museum in Brinchang, Cameron Highlands. (The Edge)

Source: Mplus Research - 1 Apr 2021