Market Review

Malaysia: The FBM KLCI (-0.3%) extended its losses after erasing all the gains recorded at the opening bell, dragged down by weakness in Petronas-related and plantation heavyweights. The lower liners were downbeat, while the broader market closed mostly lower with the Plantation sector (-1.3%) taking the worst hit after Sri Lanka announced the ban on palm oil imports from Malaysia.

Global markets: The US stockmarkets retreated from their all-time high levels as the Dow fell 0.3% with investors stalling at the sidelines amid the slowest trading activities in year-to-date. European stockmarkets were traded in a buoyant manner, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI extended its losses for the second straight session after Sri Lanka banned imports of palm oil. However, we expect bargain hunting to emerge in the near term amid higher crude palm oil price. Nevertheless, taking cues from the overnight Wall Street, we expect the sentiment to remain on the sidelines without any significant market leads and the FBM KLCI may continue to trend sideways. On a side note, the use of e-wallet payment method may pick up at farmer and public markets soon following the Retail Digitalisation Initiative (ReDI) framework being implemented.

Sector focus: Given the weaker sentiment, we expect traders to focus on the recent trading momentum within the property and construction sector. Meanwhile, digital payment industry should gain some interest with the ongoing implementation of ReDI. Besides, traders may put the recovery-theme stocks on their radar such as aviation and REITs following more positive news flows on the economic recovery.

The FBM KLCI trended lower in line with most regional peers. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI continued to hover below the 50 level. Without any fresh catalyst, the key index may continue to trade sideways, with resistance envisaged around 1,600-1,625; while support is set along 1,550-1,560.

Company Brief

In the quest to build residential units priced below RM200,000, Lagenda Properties Bhd (LPB) wholly-owned subsidiary, LPB Development Sdn Bhd and Bina Darulaman Bhd’s wholly-owned subsidiary, BDB Land Sdn Bhd (BLSB) have entered into a joint-venture (JV) cum shareholder’s agreement to develop an affordable housing township with gross development value of RM565.0m on 23.0-ac in Bandar Amanjaya, Sungai Petani, Kedah. Both parties incorporated a joint-venture company, BDB Lagenda Sdn Bhd (BDBLSB) with each party having 50.0% stake. (The Star)

Frontken Corp Bhd's Taiwanese unit is purchasing an industrial property in Taiwan for NT$367.5m (about RM53.3m), cash, to expand its production capacity there to support increasing demand from its semiconductor customers. The group 91.3%- owned Ares Green Technology Corp has inked a sale and purchase agreement with MH GOPOWER Co Ltd for the purchase. (The Edge)

Kelington Group Bhd has proposed a one-for-one bonus issue of up to 322.6m new shares. Upon completion of the bonus issue of shares, the company will also undertake a bonus issue of up to 215.08 m warrants on the basis of one free warrant for every three shares held then. The entitlement dates for the bonus issues would be determined later. Kelington also revealed its plans to venture into manufacturing, distribution and trading of industrial and specialty gases. (The Edge)

ConnectCounty Holdings Bhd's 51.0%-owned unit, Waja Build Tech Sdn Bhd has accepted a RM128.9m contract to develop a private medical centre in Alor Setar, Kedah. The contract will commence on 6th May 2021 and be completed by 5th May 2023. (The Edge)

AirAsia Group Bhd plans to raise as much as US$300.0m to expand its digital business arm AirAsia Digital. The Malaysian budget airline is in talks with prospective investors for what would be the first financing round for its digital arm and is working with at least one adviser on the potential deal. The fundraising would involve the issuance of new shares in the digital unit. (The Edge)

Genting Bhd and Genting Malaysia Bhd (GenM) are seeking the green light from shareholders to buy back their own shares. Genting and GenM intends to seek the approval of its shareholders to renew the group's authority to purchase their own shares at an amount which, when aggregated with the treasury shares, does not exceed 4.0% and 10.0%, prevailing total number of issued shares respectively at any time, at its forthcoming annual general meeting. (The Edge)

Kejuruteraan Asastera Bhd (KAB) has secured a RM17.9m contract from China Construction Yangtze River (Malaysia) Sdn Bhd (CCYRM) to carry out electrical installation and infrastructure works on three buildings along Jalan Tun Razak, Kuala Lumpur. The contract is divided into two packages, namely Package A and Package B. (The Edge)

Serba Dinamik Holdings Bhd and Membrane Technology (M) Sdn Bhd, a Universiti Teknologi Malaysia spin-off company, signed a memorandum of agreement yesterday to collaborate on the manufacturing and development of advanced membrane technology for haemodialysis treatment, water and waste water treatment. (The Edge)

Source: Mplus Research - 7 Apr 2021