Market Review 

Malaysia: The FBM KLCI (-0.5%) started off the week on a dour note, plagued by quick profit taking activities as the key index hovered mostly in the negative territory yesterday. The lower liners finished lower, while the Transportation & Logistics (+0.6%) and Technology (+0.5%) sector outperformed the negative broader market.

Global markets: The US stockmarkets retreated from their record high levels as the Dow (-0.4%) was dragged down by the selloff in technology shares which posted their biggest decline in almost four weeks. European stockmarkets closed mostly lower, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI closed lower as market sentiment remained cautious despite the roll-out of the second phase of Covid-19 vaccination. We expect the local bourse to continue its sideways movement on the back of market concerns over inoculation rate coupled with the daily Covid-19 confirmed cases staying above the 2,000 level for the fifth consecutive day. Meanwhile, the technology sector has seen a surge after the announcement regarding Microsoft partnership under the US$1.0bn Bersama Malaysia initiative.

Sector focus: While we are cautious on the overnight decline on Nasdaq, we expect technology sector to capitalise on the announcement of Microsoft partnership under the Bersama Malaysia initiative. Besides, the energy sector may also come into focus amid the higher Brent oil prices that recovered back above US$67/bbl.

The FBM KLCI snapped the three-session winning streak and retreated to close slightly above the 1,600 psychological level. Technical indicators turned negative as the MACD Histogram has turned red, while the RSI was hovering below the 50 level. We expect the key index to hover along the 1,600 level over the near term, with resistance pegged along 1,615-1,635, while support is set at 1,545-1,565.

Company Brief

Dutch Lady Milk Industries Bhd (DLMI) has contracted engineering and project management consultancy Royal HaskoningDHV to develop its new environmentally friendly production facility in Bandar Enstek, Negeri Sembilan. The work scope will include design, procurement, construction management, commissioning and startup of the facility, as well as assistance in the transfer from the existing factory in Petaling Jaya to the new dairy hub. (The Star)

Boustead Holdings Bhd is selling a parcel of land located along Jalan Cochrane in the city centre to Sunway Bhd for RM233.4m cash. The estimated gain from the disposal of the 6.6-ac land was about RM54.1m.

Separately Boustead has entered into a memorandum of understanding (MoU) with one of the largest commercial algae plantation owner and cultivator in the world - Next Generation Oil Sdn Bhd. The MoU will pave the way for the group to monetise its current land assets through higher yield products. (The Star)

HLT Global Bhd is buying 2.6-ac of leasehold land in Kuala Langat. Selangor for RM16.3m. Upon completion of the proposed acquisition, the subject property will be fully utilised for the fabrication of glove-dipping lines as the glove maker is operating at its peak production capacity. (The Star)

The majority of shareholders in M3 Technologies (Asia) Bhd has rejected the company's proposed private placement exercise at an EGM yesterday. Seven shareholders with a combined holding of 146.0m shares, or 66.7% of the company have voted against the proposed fund-raising exercise. M3 Technologies had earlier proposed to place out 232.14 m new shares, or 30% of its issued share capital to independent investors. (The Star)

Magna Prima Bhd is disposing of a four-storey commercial building in Kuala Lumpur for RM56.0m, which the property developer will use to help settle its debts. The property, located in Mukim Batu and with its lower ground floor designated for a supermarket, is being sold by its wholly-owned unit Everhall (M) Sdn Bhd to Cowboy (KL) Sdn Bhd. (The Edge)

Iskandar Waterfront City Bhd (IWCity) has announced a share placement which will see businessman Ong Yoong Nyock emerging as a substantial shareholder in the group. The placement of 83.7m new shares, or 10.0% of IWCity's share base, to Ong and four other parties will raise RM40.2m. The shares are priced at 48 sen apiece. Ong is the managing director and major shareholder of Tiong Nam Logistics Holdings Bhd and major shareholder of Wong Engineering Corp Bhd. (The Edge)

Tan Chong Motor Holdings Bhd, which last month reported that its RM109.0m bills of demand from the Royal Malaysian Customs Department will be settled out of court that the sum will be settled via instalment payments over 36 months. This will involve the company paying RM10.8m by 20th April 2021, with the balance of RM97.3m to be paid via 36 equal monthly instalments of RM2.7m, from May 2021 to April 2024. (The Edge)

AmFIRST Real Estate Investment Trust’s (AmFIRST REIT) 4QFY21 net property income (NPI) declined 33.7% YoY to RM12.6m, due to rental rebates and lower rental income. Revenue for the quarter slipped 18.0% YoY to RM24.6m. A final income distribution per unit of 1.42 sen per unit, payable on 28th May 2021 was declared. (The Edge)

After having implemented a seven-day stoppage at one of its manufacturing plants due to Covid-19 infections, Homeritz Corp Bhd has announced a one-week suspension of operations across all of its factories and administrative office. The temporary closure of the factories is aimed at minimising the risk of further spreading the virus within the community. (The Edge)

Freight Management Holdings Bhd has proposed a bonus issue of 279.2m shares on the basis of one bonus share for every share held on an entitlement date to be announced later. The bonus issue serves to improve the marketability and trading liquidity of its shares on lower trading price, which would attract a broader range of investors to participate. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) is eyeing a total investment of RM1.30bn for Subang Airport’s (SZB) regeneration development that will transform it from an airport operator to an ecosystem master developer and aviation hub in Asia Pacific. RM300.0m will be needed for the common infrastructures and RM1.00bn for building lettable facilities such as hangers, factories, maintenance, repair, and operations (MRO), as well as workshops. (The Edge)

A group of Artroniq Bhd shareholders wants to have the company's entire board of directors removed, and appoint new ones in their stead. Four shareholders – Tee Yen Chong, Yeoh Guan Fook, Lee Pei Mei and Chew Hun Seng who claimed they collectively control at least a 10.0% stake in the company, want to remove nonexecutive chairman Steven Wong, executive director Choy Eng Lun, and independent and non-executive directors Tan Tian Wooi and Lam Kwan Siew from the group’s board via an extraordinary general meeting. (The Edge)

Source: Mplus Research - 20 Apr 2021