Market Review

Malaysia: The FBM KLCI (+0.01%) finished on a flattish note after recovering all its intraday losses, lifted by buying support in gloves heavyweights in the second half of the trading session. The lower liners ended mostly higher, while the broader market closed mixed with the Technology sector (+0.8%) taking the lead.

Global markets: The US stockmarkets extended their gains as the Dow (+0.5%) advanced, driven by the recent batch of strong economic data and corporate earnings. Meanwhile, both the European and Asia stockmarkets were fairly upbeat as China reported 18.3% YoY growth in 1Q21 GDP; the biggest expansion in history.

The Day Ahead

The FBM KLCI finished marginally higher last week on the back of persistent buying support in glove counters despite weak market sentiment on the broader market. Investors’ interest returned to the glove stocks as concerns loomed over the possible new wave of Covid-19 cases. We expect the local bourse to extend its sideways move as investors may weigh the progress of the vaccination programme and the recent spike in the number of daily Covid-19 confirmed cases which will be detrimental to the economy. Meanwhile, the CPO price has seen a surge back above RM3,700/MT.

Sector focus: Investors may look out for plantation stocks amid the buoyant CPO price movement. Besides, we expect buying interest to emerge in stocks with high earning certainties such as consumers, packaging and property. At the same time, the technology sector may remain in focus with the Nasdaq remain supported above 14,000 level.

The FBM KLCI posted marginal gains last week to remain in the consolidation band. Technical indicators turned mixed as the MACD Histogram has turned into a green bar, while the RSI was hovering below the 50 level. The key index is expected to extend its sideways move, with resistance pegged along 1,615-1,635, while support is set at 1,565, followed by 1,545.

Company Brief

Malaysia Airports Holdings Bhd’s (MAHB) network of airports registered a decline of 76.8% YoY with 5.9m passenger movements for 1Q2021 due to re-imposition of the Movement Control Order effective 13th January 2021 in Malaysia. Domestic and international sectors declined by 68.0% YoY and 87.3% YoY with 1.5m and 4.4m passenger movements respectively. (The Star)

Central Global Bhd's wholly owned subsidiary, Proventus Bina Sdn Bhd (PBSB), has bagged a sub-contract to upgrade water supply infrastructure in Lahad Datu, Sabah, worth RM100.5m. The contract which was awarded by RYRT International Sdn Bhd, commences on 28th April 2021 and is expected to conclude by 24th June 2023. (The Star)

Apex Equity Holdings Bhd will not be merging its stockbroking arm JF Apex Securities Bhd with Mercury Securities Sdn Bhd. The group announced that it, alongside JF Apex Securities, was informed by Mercury that the latter would not be seeking an extension for the merger, which has been mutually extended for 10 times over two years. (The Edge)

Tropicana Corp Bhd sold 1.9m shares or about 0.02% in Top Glove Corp Bhd at a loss. The stocks were sold for RM10.0m, or an average selling price of RM5.40 per share. The investment cost of the block of Top Glove shares was RM12.6m, or RM6.81 per share. Following the share sale, the property developer still holds 12.5m shares, or 0.2%, in Top Glove via its wholly-owned unit Desiran Realiti Sdn Bhd. Meanwhile, Top Glove is currently in the third stage of the US Customs and Border Protection (US CBP) Withhold Release Order (WRO) modification process. (The Edge)

Berjaya Corp Bhd boss Tan Sri Vincent Tan has continued to trim his stake in Berjaya Land Bhd (BLand). BLand announced that the tycoon, via Berjaya Sompo Insurance Bhd, sold 3.7m shares in BLand in the open market on 14th April 2021. Coupled with his direct stake of 95.5m shares equivalent to a 1.9% stake, Tan now controls 3.87bn shares in BLand, or a cumulative stake of 86.2%. (The Edge)

Magna Prima Bhd’s independent auditor has raised a material uncertainty related to the property developer’s ability to continue as a going concern. Messrs HLB Ler Lum has announced that the group’s and company’s current liabilities exceeded its current assets by RM108.4m and RM309.2m respectively, as of FY20. It also noted that the group and the company incurred a net loss of RM152.2m for FY20. (The Edge)

Transocean Holdings Bhd, whose upper limit of its share price has been frozen at RM1.53 after a strong rally, is proposing a second share placement one day after the first proposed share placement. The second proposed share placement is up to 10.0% of the existing issued shares of the company. It entails the issuance of up to 4.5m new shares after taking into account the first placement. The fresh capital raised will be used for upgrading the logistics business segment’s information technology infrastructure and system. (The Edge)

Capitaland Malaysia Mall Trust’s (CMMT) 1QFY21 net property income (NPI) dropped 26.8% YoY to RM24.9m, due to lower gross rental income. Revenue for the quarter fell 15.4% YoY to RM56.7m. The property trust declared a distribution per unit of 0.36 sen. (The Edge)

UEM Edgenta Bhd has strongly denied allegations of improper work planning and resources allocation, as well as other claims against its subsidiary, Edgenta Propel Bhd (EPB). The civil suit concerns EPB's Klang Valley Mass Rapid Transit's Putrajaya Line (MRT2) project for a protection & relocation of utilities (relocation of telecommunications works) subcontract work in 2016. (The Edge)

MAG Holdings Bhd has denied connections to four men who were arrested for beating up two bodyguards who were fasting. The group clarified that Chung Chee Yang, who was identified as one of the suspects in viral postings, is not part of the company’s management or its board of directors. He was only a shareholder for a short period in 2019 and has ceased to be a shareholder since then. (The Edge)

7-Eleven Malaysia Holdings Bhd is proposing to establish an RM600.0m medium term note programme. The programme was lodged with the Securities Commission Malaysia (SC) on 15th April 2021. The proceeds will be used to refinance any existing borrowings, capital expenditure (capex), investments, working capital, corporate purposes, as well as to defray the expenses for the programme. (The Edge)

Source: Mplus Research - 19 Apr 2021