Market Review

Malaysia: The FBM KLCI (+0.5%) recovered almost all of its previous session losses, boosted by bargain hunting activities in selected index components, particularly amongst the telco heavyweights. The lower liners closed mostly higher, while the broader market was mostly upbeat, led by the Transportation & Logistics (+1.8%) sector.

Global markets: The US stockmarkets extended their losses as the Dow (-0.8%) fell as the rising Covid-19 cases overshadowed the recent strong batch of corporate earnings. European stockmarkets were battered by as rising Covid-19 cases in several countries, while Asia stockmarkets closed mostly lower.

The Day Ahead

The FBM KLCI bucked regional downtrend to close higher on the back of bargain hunting activities in selected beaten-down stocks. Although market sentiment may remain tepid tracking the overnight losses on Wall Street, the local bourse may be supported by buying interest in high earning certainty stocks ahead of the earnings season. Meanwhile, the CPO price has seen a surge back above RM3,800/MT following a mild pullback in the previous session.

Sector focus: With firmer CPO prices, traders may pile into the plantation sector. Besides, we expect to see buying interest spilling over to other glove counters following Kossan’s record high earnings released yesterday amid rising daily Covid- 19 confirmed cases. Building materials-related stocks are also in focus amid the elevated raw material prices.

The FBM KLCI rebounded from previous-session losses to close above the daily EMA20 level. Technical indicators have turned positive as the MACD Histogram turned green, while the RSI was hovering above the 50 level. We expect traders to stay on the sidelines to monitor for further leads, with resistance pegged along 1,615-1,635, while support is set at 1,545-1,565.

Company Brief

Petronas Gas Bhd (PGB) is allocating a capital expenditure (capex) of between RM1.2bn and RM1.3bn for FY21, from RM1.1bn spent in the previous financial year. The higher level of capex in FY21 was in line with all the planned activities in the current year that include a 42-km lateral gas pipeline, which will supply gas to the proposed Pulau Indah Power Plant in Selangor. The pipeline would come on stream in early 2023. (The Star)

Kossan Rubber Industries Bhd’s 1QFY21 net profit surged 16.1x YoY to RM1.04bn amid the strong demand and higher ASP of gloves. Revenue for the quarter soared 258.2% YoY to RM2.19bn. A first interim dividend of 12 sen per share, payable on 20th May 2021 was declared. (The Edge)

KIP Real Estate Investment Trust's (KIP REIT) 3QFY21 net property income (NPI) fell 5.9% YoY to RM13.7m, on the back of lower revenue. Revenue for the quarter slipped 7.3% YoY to RM18.0m. A third distribution per unit (DPU) of 1.6 sen, payable on 25th May 2021 was proposed. (The Edge)

M3 Technologies (Asia) Bhd’s memorandum of collaboration with AT Systematization Bhd to provide digital signage hardware and software enhancements for large scale Covid-19 disinfection chambers, has fallen through. The decision was mutually agreed upon by both groups, as they had not entered into a more definitive agreement. (The Edge)

Inta Bina Group Bhd has bagged a RM106.0m contract for the construction of serviced apartments in Klang. The group’s wholly-owned subsidiary Inta Bina Sdn Bhd had accepted a letter of award from Mitraland Holding (M) Sdn Bhd’s wholly owned unit Vibrantline Sdn Bhd. The contract is for Phase 2 of the project, which includes main building works for the project. (The Edge)

HIL Industries Bhd’s wholly-owned subsidiary, Amverton Prop Sdn Bhd has entered into four conditional joint venture agreements to undertake residential development on five parcels of land in Sungai Buloh, Klang and Jugra in Selangor. The JVAs involved a total of 41.6-ha. (The Edge)

Transocean Holdings Bhd has reported that it is unaware of any reasons that could account for the spikes in its share price and trading volume in recent days. This is in response to an unusual market activity query by Bursa Malaysia. (The Edge)

Yinson Holdings Bhd has launched its green technologies division, marking its foray into the technology sectors that drive the global transition to a net carbon zero future. The division was launched at the Singapore Maritime Technology Conference yesterday. Green technologies is Yinson’s newest business division, established in September 2020, to sit alongside its offshore production, renewables and offshore marine divisions. (The Edge)

GHL Systems Bhd has enabled GrabPay e-wallet acceptance at Shell petrol stations nationwide in Malaysia. The move further widened the cashless ways consumers can pay for products and services and will further encourage the adoption of cashless payments. (The Edge)

Bina Puri Holdings Bhd has announced that its 20.0% joint venture company has bagged a contract worth 5.20bn Nepali rupee (RM183.0m) for a new construction project in Nepal. Bina Puri Kalika-Samanantar — a JV company formed by Buni Puri with Kalika Construction Pvt Ltd and Samanantar Nirman Sewa Pvt Ltd has been awarded the contract by the Supreme Court of Nepal for the construction of the Supreme Court Building Complex at Ramshahpath, Kathmandu. (The Edge)

Malaysian Rating Corp Bhd (MARC) has assigned a preliminary rating of AA- to 7- Eleven Malaysia Holdings Bhd's proposed RM600.0m medium-term notes programme with a stable outlook, to reflect the group's strong and established market position in the Malaysian convenience store segment. (The Edge)

Genting Malaysia Bhd (GenM) has confirmed the debt listing of its direct wholly owned subsidiary GENM Capital Labuan Ltd on the Singapore Exchange (SGX). It has priced its offering of the US$1.00bn (RM4.12bn) aggregate principal amount of 3.9% senior unsecured notes due 2031. (The Edge)

Genting Bhd-owned Resorts World Las Vegas in the US will officially open its doors on 24th June 2021. Resorts World Las Vegas will feature among others, 3,500 guest rooms and suites, a gaming floor and a 5,000-capacity theatre. (The Edge)

Ajiya Bhd's 1QFY21 net profit jumped 108.4% YoY to RM6.5m, thanks to lower operating costs. Revenue for the quarter, however, dropped 5.0% YoY to RM73.7m. (The Edge)

Source: Mplus Research - 21 Apr 2021