Market Review

Malaysia: The eleventh hour buying support in selected index heavyweights lifted the FBM KLCI (+0.04%) marginally higher yesterday. The lower liners closed mixed, while, the broader market finished mostly higher, anchored by the Energy and Healthcare sector that added 1.3% each as the former saw the crude oil prices advanced for the third straight session.

Global markets: The US stockmarkets closed mixed as the Dow (+0.2%) was boosted by stellar corporate earnings from banking giants such as JP Morgan and Goldman Sachs, but the S&P 500 (-0.4%) and Nasdaq (-1.0%) retreated on weakness in technology shares. Meanwhile, both the European and Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI finished on a flattish note as buying interest interspersed with profittaking activities on selected heavyweights. With Covid-19 infections in the country showing an upward trend, overall market sentiment may remain jittery. Despite that, the surged in crude oil prices amid the optimism about returning demand after the Covid-19 lockdowns may provide some alleviation, particularly to the oil & gas players.

Sector focus: We believe the oil and gas counters will be under traders’ radar in view of the surge in oil price. Daily demand on food and packaging amid the extension of MCO may to attract buying interest in consumer and packaging sectors. At the same time, the healthcare sector is also in the focus as Malaysia is in the brink of fourth wave of Covid-19, view of the rising new and active cases.

The FBM KLCI snapped two days losing streak and ended almost flat after erasing most of the intraday losses as the key index formed a hammer candle. Technical indicators turned mixed as the MACD Histogram has extended a red bar, while the RSI was hovering above the 50 level. Should the key index surpass the 1,600 level, it may trade higher with resistance pegged along 1,615-1,635, while the support level is set at 1,575

Company Brief

Widad Group Bhd will pay RM35.0m to acquire a facility management firm in Johor. The target company Palm Shore Holdings Sdn Bhd (PSH) has a RM291.0m concession ending February 2040 to develop and to carry out maintenance works for an integrated training centre for the Royal Malaysian Navy at Sungai Lunchoo known as TLDM KD Sri Medini Complex. (The Star)

Teladan Setia Group Bhd is buying 520.0-ac of land in Jasin, Melaka for RM95.1m, increasing its total landbank 738.9-ac. The property firm is planning to developed landed residential properties priced between RM200,000 to RM400,000 each in Jasin. The purchase will be settled by a combination of cash and bank borrowings. (The Star)

Niche Capital Emas Holdings Bhd is planning to venture into the gold mining business. The company has entered into a Joint Venture Agreement (JVA) with Spate Precious Metals Sdn Bhd to undertake a gold mining project in Tanah Merah, Kelantan. The group has been given access, through the JVA, to mine on an area measuring approximately 50.0-ha which is part of the 547.4-ha Sokor North area.

Meanwhile, the group has proposed to raise as much as RM26.9m, via the issuance of new shares of about 20.0% of its current paid up share capital, to fund the gold mining project. The 146.0m new shares will be issued to Macquarie Bank Ltd (122.0m new shares) and Heah Kwai Keng (22.0m new shares) at 12.0 sen and 18.33 sen respectively. (The Star)

Reservoir Link Energy Bhd has been appointed one of the panel umbrella contractors by Petroliam Nasional Bhd (Petronas) to provide new technology equipment and services. The appointment shall be valid for five years from the date of Letter of Award until 10th December 2025. (The Edge)

Barakah Offshore Petroleum Bhd has proposed to undertake a private placement of up to 167.2m new shares, equivalent to 20.0% of its existing issued shares, to raise RM14.3m for its working capital, payment of salaries to staff as well as operating and administrative expenses. The shares will be placed to independent third-party investors to be identified soon at an issue price to be determined later. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) is acquiring a loss-making construction firm in Seri Kembangan, Selangor for RM5.0m, to explore business expansion plans in Peninsular Malaysia. The group has inked a conditional share sale agreement with three individuals — Noorazylawati Abdul Bakar, Mohd Khairil Mohd Hatta and Ibrahim Mohd Noor to acquire Kencana Precast Concrete Sdn Bhd (KPCSB). (The Edge)

Transocean Holdings Bhd is buying a 40.0% stake in Enfrasys Solutions Sdn Bhd from Enfrasys Consulting Sdn Bhd for RM20.0m. The purchase consideration will be settled via issue of new shares at RM1.00 per share. (The Edge)

In less than two months after it announced the proposal of a bonus issue of warrants, share placement and share issuance scheme (SIS), CN Asia Corp Bhd has proposed a three-for-two bonus issue of shares. The proposed bonus issues aim to improve trading liquidity and marketability of the company shares and to attract greater participation by investors. (The Edge)

Homeritz Corp Bhd is temporarily stopping the operations of its manufacturing plant in Kawasan Perindustrian Bukit Bakri, Muar, Johor for seven days, beginning 13th April 2021, after several of its workers there tested positive for Covid-19. The suspension of operations will cause a delay in the shipment of several sales orders. (The Edge)

Source: Mplus Research - 15 Apr 2021