Market Review

Malaysia: The FBM KLCI (+0.6%) started off the month on a strong footing as the key index hovered in the positive territory throughout the trading session, mainly driven by bargain hunting activities in gloves heavyweights. The lower liners closed mixed, while all 13 major sectors on the broader market finished higher with the Technology and Property sector taking the lead after rising 2.3% each.

Global markets: The US stockmarkets trended higher as the Dow (+0.5%) recovered all its previous session losses, while the S&P 500 (+1.2%) topped the 4,000 psychological level, driven by optimism over the economic outlook. European stockmarkets rebounded, while Asia stockmarkets ended mostly positive.

The Day Ahead

The FBM KLCI rebounded after a heavy selldown in the prior session, supported by bargain hunting as investors took cue from the regional gains and the 8-month high IHS Malaysia Manufacturing PMI in March 2020. Tracking the overnight improvement at Wall Street, we expect the local bourse may extend the rebound formation, especially in the technology stocks, mirroring the gains in Nasdaq. Commodities wise, both crude palm oil price and oil price have seen a strong surge of more than 3.0%.

Sector focus: We reckon that the overnight gains at Nasdaq may continue supporting the uptrend on technology stocks on the local front. Also, traders may focus on the recovery theme, as the PM mentioned that fully vaccinated individuals may be allowed to travel domestically and internationally. Meanwhile, market participants could look into the oil & gas and plantation sector given the strong surge in CPO and Brent oil prices.

The FBM KLCI snapped the two session losing streak and finished 0.6% higher. However, the MACD Histogram has extended another red bar, while the RSI is still hovering below the 50 level. We believe the key index may see some rebound, but upside may be capped. Resistance is pegged at 1,600-1,625, while the support is located around 1,550-1,560.

Company Brief

Solution Group Bhd has entered into a supply agreement with the Health Ministry to supply Convidicea, a recombinant novel coronavirus vaccine also known as adenovirus type 5 vaccine. Solution’s wholly-owned subsidiary Solution Biologics Sdn Bhd (SOLBIO) would supply 3.5m doses of the vaccine to MOH. (The Star)

MyNews Holdings Bhd will be allocating a higher capital expenditure (capex) of RM50.0m for the opening of all its operating four brands, namely myNEWS, myNEWS SUPERVALUE, WHSmith and CU. The company had its first CU outlet opened yesterday and will be opening 500 CU stores in the next five years. (The Edge)

Panasonic Manufacturing Malaysia Bhd announced the appointment of Kenji Kamada to the position of managing director, effective immediately. Kamada, 56, succeeded Toyokatsu Okamoto, who resigned from the post consequent to retirement from the executive position. (The Edge)

Omesti Bhd has acquired a total of 4.9m shares in Microlink Solutions Bhd from the open market for RM9.7m, or an average RM1.97 per share. Following the acquisitions, Omesti now controls 124.9m Microlink shares, representing a 51.8% equity interest in the company. (The Edge)

Bermaz Auto Bhd (BAuto) is partnering with Kia Motors Corp to undertake manufacturing and distributing Kia vehicles in Malaysia. The two parties are forming a JV company named Kia Malaysia Sdn Bhd to undertake the assembly of complete knock-down Kia vehicles here whereby BAuto will own 33.3% with the remainder to be held by Kia Corp. (The Edge)

Chan Kok San has emerged as a substantial shareholder of Bintai Kinden Corporation Bhd via the acquisition of a 6.6% stake in the engineering service group. The stake, comprising 25.0m shares, was acquired at 50 sen per share in an off-market transaction yesterday. Chan has more than 18 years of experience in the electrical and electronics industry, concentrating on specialised automation machines. (The Edge)

Fitch Ratings has revised the outlook on Sime Darby Plantation Bhd to stable from negative, and affirmed the Long-Term Foreign-Currency Issuer Default Rating at "BBB". Meanwhile, SDP's senior unsecured rating, the rating of its sukuk programme and outstanding issuance under the programme have been affirmed at "BBB". (The Edge)

Top Glove Corporation Bhd has announced that no new additional issue on forced labour has been discovered. However, some rectification and verification works are required on the earlier forced labour findings. (The Edge)

Astro Malaysia Bhd is hoping to grow its number of sports subscribers further, which currently make up a third of its total subscriber base. The pay-TV operator is anticipating its number of sports package holders to grow with the increasing number of people using its Ultra Box now. (The Edge)

SHH Resources Holdings Bhd has proposed a bonus issue of about 50.0m shares on the basis of one new share for every one existing share held on a date to be announced later. Its share capital will increase to about 100.0m shares following the issuance from roughly 50.0m shares now. (The Edge)

Media Prima Bhd’s distribution agreement with iQIYI will not impact the latter's deal with Astro Malaysia Bhd. Media Prima announced its deal with iQIYI on 23rd March 2021, where iQIYI signed on to provide an exclusive first window broadcasting rights to the majority of Media Prima-owned TV3's locally produced and highest-rated primetime dramas. iQIYI is a Baidu-backed streaming platform in China. (The Edge)

AMMB Holdings Bhd has proposed a private placement to raise an estimated RM810.0m. The group plans to issue up to 300.0m new shares or 10.0% of its current share capital to raise additional funds to strengthen its core capital ratios, including Common Equity Tier 1 and Total Capital Ratio. (The Edge)

Source: Mplus Research - 2 Apr 2021