Market Review

Malaysia: The FBM KLCI (+0.6%) marched higher for the third straight session, largely driven by DIGI and AXIATA following the news on the potential merger between the two telco entities. The lower liners closed mixed, while, the broader market also ended on a mixed note with the Healthcare sector (-2.2%) experienced quick profit taking from the previous sharp gains.

Global markets: The US stockmarkets remained upbeat as the Dow (+0.9%) extended its gains amid the upbeat economic recovery prospects after the Producer Price Index in March rose 1.0% YoY; beating consensus forecast of 0.5% YoY rise. European stockmarkets ended mostly higher, but and Asia stockmarkets were mostly downbeat.

The Day Ahead

The FBM KLCI locked in third consecutive gains last Friday, as focus was shifted from glove counters to the telecommunication sector following Celcom-DiGi merger talks. Tracking the overnight improvement on Wall Street, the local bourse may trend on a slightly positive tone after hovering firmer above the critical 1,600 level. However, we believe the market sentiment will remain choppy amid rising Covid-19 cases (albeit the ongoing vaccine rollout plan for Covid-19), coupled with the development regarding the new wave of Covid-19 outbreak in some countries and Europe and Asia.

Sector focus: Given the new wave of Covid-19 cases in certain countries, we reckon investors may refocus on the healthcare stocks. Besides, telecommunication and 5G-related stocks may see some buying interest after the merger news between Celcom and DiGi.

After staying above the 1,600 level for the third session, we believe the FBM KLCI may trend higher for the week. Technical indicators remain as the MACD Histogram has extended a green bar, while the RSI has crossed above the 50 level. Resistance is pegged at 1,615-1,635, while the support level is set at 1,565-1,575.

Company Brief

Kerjaya Prospek Group Bhd's 49.0%-owned associate company Kerjaya Bina BMK Sdn Bhd has accepted a RM153.5m contract from BBCC Development Sdn Bhd for construction works of a proposed mixed development off Jalan Hang Tuah/Jalan Pudu, Kuala Lumpur. The development will comprise a 44-storey serviced apartment, a podium block with an eight-storey car park and a seven-level car park with three underground and four basement levels. Construction is expected to commence on 15th April 2021 and will take 30 months to complete. (The Star)

Samchem Holdings Bhd has proposed 1-for-1 bonus issue to reward its shareholders. The entitlement date will be determined later. The proposed bonus issue is subject to approvals from regulators and its shareholders at an upcoming general meeting. (The Star)

TCS Group Holdings Bhd's wholly-owned subsidiary, TCS Infra Sdn Bhd, has secured an infrastructure project for part of Section 7, Part 2 of 2 of the West Coast Expressway (WCE) worth RM177.2m. The group had accepted the letter of acceptance from KEB Builders Sdn Bhd for the contract, which is the final section of West Coast Expressway project. The project is expected to commence in June 2021 and scheduled for completion in 24 months. (The Star)

IGB Commercial Real Estate Investment Trust (REIT) has moved to purchase properties worth RM3.16bn in total from IGB Bhd’s subsidiaries and 50.0% owned joint ventures (JV) as part of its listing. The REIT had signed 10 sale and purchase agreements (SPAs) with IGB to purchase Menara IGB and IGB Annexe, Centrepoint South, Centrepoint North, Boulevard Properties, Gardens South Tower, Gardens North Tower, Southpoint properties, Menara Tan and Tan, GTower and Hampshire place. (The Edge)

MMC Corp Bhd is selling 11.1-ac of vacant industrial land at Senai Airport City (SAC) to Shengda New Energy Sdn Bhd (SNESB) for RM24.1m. The land was sold via Senai Airport City Sdn Bhd (SACSB), a wholly-owned unit of Senai Airport Terminal Services Sdn Bhd, which in turn is wholly-owned by MMC. (The Edge)

Menang Corp Bhd is undertaking a private placement to raise RM21.4m in order to repay some of its debts. The company announced that it would be placing 48.1m shares or 10.0% of its share capital to third party investors at an indicative issuance price of 44.5 sen. (The Edge)

GFM Services Bhd has proposed a private placement of up to 20.0% of its issued shares to raise up to RM47.5m, which will mainly be used for the group’s working capital and new business opportunity. The shares will be placed to third party investors at an issue price that will be fixed at a later date. (The Edge)

Cocoaland Holdings Bhd has proposed to undertake a bonus issue of 228.8m shares on the basis of one bonus share for every one existing share held on a date to be announced later. The bonus issue serves to reward the shareholders for their loyalty and continued support to the group. (The Edge)

Source: Mplus Research - 12 Apr 2021