Market Review 

Malaysia: The FBM KLCI trended mildly lower as the key index snapped a three-day rally after half of the key index components ended lower with profit taking activities evident in selected telco heavyweights. The lower liners closed mostly lower, while, the broader market was also mostly downbeat with the Telecommunications & Media sector (-0.7%) taking the biggest fall.

Global markets: The US stockmarkets retreated as the Dow fell 0.2% as investors monitor on developments surrounding the start of corporate earnings season. European stockmarkets closed lower due to the rising Covid-19 cases in several countries, coupled with the delay in vaccination rollout, while and Asia stockmarkets ended mostly in the red.

The Day Ahead

In tandem with the regional weakness, the FBM KLCI staged a pullback after a three-session climb as profit taking on telecommunication and selected heavyweights weighed. Amidst the lack of fresh catalyst, the local bourse may stage a further pullback, but the weakness may be cushioned by technical rebound. The unstable number of Covid-19 daily confirmed cases has resulted in the extension of CMCO and RMCO in several states may also impact on the smoother economic recovery. Commodities wise, the CPO price slipped below RM3,700/MT.

Sector focus: We believe selected sectors related to the recovery-theme such as construction, property and consumer are still on their uptrend move despite the unstable number of Covid-19 daily confirmed cases. Besides, packaging-related stocks may also be in favour in view of the extension of CMCO and RMCO.

The FBM KLCI snapped the three-session gains to register a mild pullback amid continued selling in foreign funds. Technical indicators, however, turned positive as the MACD Histogram has extended a green bar, while the RSI was hovering above the 50 level. While market sentiment remains cautious, a short-term rebound may be seen with resistance envisaged at 1,615-1,635, while the support level is pegged along 1,565-1,575.

Company Brief

BIMB Holdings Bhd, the owner of Bank Islam Malaysia Bhd, has requested for the trading of its shares to be suspended today to make way for a fund raising announcement. The request has been approved by Bursa Malaysia. (The Star) Comfort Gloves Bhd has proposed to issue free warrants to its shareholders. The warrants, convertible into new shares, would enable the company to raise as much as RM452.7m for capital expenditure.

Comfort Gloves Bhd has proposed to issue three new warrants for every 10 ordinary shares in the company held on the entitlement date to be determined later. Meanwhile, the company has also proposed to set up an employees’ share scheme. (The Star)

Bintai Kinden Corp Bhd has entered into a preliminary agreement to acquire 100.0% equity interest in Johnson Medical International Bhd (JMI), a medical facility construction firm for RM50.0m. The company plans to settle the purchase by paying RM26.0m cash and the issuance of 58.6m new Bintai Kinden shares at 41 sen each to Yeo Eng Lam. The Vendor unconditionally and irrevocably guarantees that JMI shall attain profit after tax (PAT) of not less than RM3.5m FY2021 and PAT of not less than RM5.6m for FY22, or RM9.1m collectively for FY21 and FY22. (The Star)

Tan Sri Dr Zeti Akhtar Aziz will not be seeking re-election as the chairman of Sime Darby Property Bhd in the upcoming annual general meeting (AGM). With this, the former Bank Negara Malaysia governor who is due for retirement at the group will retain office until the close of the AGM to be held on 6th May 2021. (The Edge)

Datuk Mohamed Sharil Mohamed Tarmizi, former chairman and chief executive of the Malaysian Communications and Multimedia Commission, will join Pos Malaysia Bhd's board of directors effective today. Sharil, 51, will serve as its independent non-executive director. (The Edge)

Lion Industries Corp Bhd announced that the proposed disposal by its 99.0%- owned subsidiary Amsteel Mills Sdn Bhd of its hot-briquetted iron plant and business in Labuan to Esteel Enterprise Pte Ltd has fallen through as the long stop date due on 10th April 2021 to meet all the conditions precedent as stated in the amended and restated sale and purchase agreement (A&R SPA) has not been fulfilled or waived. (The Edge)

Komarkcorp Bhd plans a private placement to expand its face mask manufacturing business. The group would be issuing 96.2m new shares or 20.0% of its existing share base to independent third-party investors. Based on its illustrative issue price of 24 sen apiece, the group would be raising RM23.1m, of which RM22.2m would be deployed for the expansion of its face mask manufacturing business and the rest to defray the expenses associated with the private placement. (The Edge)

Luster Industries Bhd has inked an agreement to provide engineering, procurement, construction and commissioning for 12 rubber glove production lines in the US. The agreement was inked between American Nitrile LLC with Glovconcept Sdn Bhd, a 60.0%-owned unit of Glovmaster Sdn Bhd, which is in turn 56.0%-owned by Luster. (The Edge)

Gets Global Bhd has entered into a heads of agreement with BT Capital Sdn Bhd for a potential acquisition of an equity stake in Great Stylish Venture Sdn Bhd (GSVSB) to expand its glove business. BT Capital has 100.0% direct equity interest in GSVSB. The purchase consideration for the proposed acquisition shall be determined at a later date which will be satisfied via a combination of cash and/or issuance of shares or other securities at an issue price of RM1.90 each. (The Edge)

Reservoir Link Energy Bhd has secured a three-year contract from Petronas Carigali Sdn Bhd for the provision of well leak repair equipment and services. The company wholly-owned unit Reservoir Link Sdn Bhd received a letter of award for the service on 22nd March 2021 for a period of 3 years. Separately, the group has also proposed an acquisition of a 51.0% equity stake in a special purpose vehicle (SPV) which will be involved in the solar photovoltaic (PV) segment, for RM21.2m. It said it has entered into a conditional term sheet with Lee Seng Chi, outlining their mutual intention of entering a share sale agreement for the company's proposed acquisition, into which identified business and asset of Solar Bina Engineering Sdn Bhd will be injected. (The Edge)

GDB Holdings Bhd has proposed to undertake a bonus issue of new ordinary shares on the basis of 1 bonus share for every 2 existing GDB shares. The entitlement date will be determined later. Concurrently, GDB has also proposed to undertake a bonus issue of free 5Y warrants on the basis of 2 warrants for every 5 existing shares held by shareholders on the same entitlement date to be determined later. (The Edge)

Source: Mplus Research - 13 Apr 2021