Market Review 

Malaysia: The FBM KLCI (+0.7%) rebounded to recover all its previous session losses, largely boosted by buying support in gloves heavyweights after more than two-third of the key index components finished higher. The lower liners closed mostly higher, while the Transportation & Logistics (-0.5%) and Energy (-0.2%) sector underperformed the positive broader market.

Global markets: The US stockmarkets retreated as the Dow slipped 0.9% after US President Joe Biden proposed to double the capital gain tax for those earning US$1.0m and above. European stockmarkets extended their gains, while Asia stockmarkets were mostly upbeat.

The Day Ahead

Positive cues from the regional peers coupled with extended buying momentum in glove heavyweights pushed the FBM KLCI to close above the 1,600 level. While investors may be piling into stocks with higher earnings certainties ahead of the earnings season, market sentiment could remain jittery on the back of higher local daily Covid-19 confirmed cases as well as weak performance on Wall Street overnight. Commodities wise, the CPO price was on firmer footing, trending nearer to the RM4,000 level, while the Brent oil may be heading higher above for the session. Besides, lumber futures are trading around the all-time-high region.

Sector focus: Given the setup above, we believe the plantation, O&G and lumberrelated stocks may be on the lookout amid firmer CPO, crude oil and lumber prices. Meanwhile, the transportation & logistics industry may stage a rebound following a mild pullback yesterday.

The FBM KLCI returned above the 1,600 level with lower trading volume. Technical indicators turned positive as the MACD Histogram has turned into a green bar, while the RSI was hovering above the 50 level. Volatility may remain in place as the key index struggled to cross above the resistance at 1,615-1,635; support is located at 1,545-1,565.

Company Brief

Top Glove Corp Bhd has slashed the amount it planned to raise from its proposed listing of new shares in Hong Kong by almost half, as the Covid-19 vaccine rollout worldwide sapped investors' appetite for glove stocks. It will reduce the number of new shares to be sold to investors in Hong Kong to 793.5m shares compared with 1.50bn shares it had originally planned in February 2021. The reduced number of shares to be issued would amount to 9.9% of its total issued share capital which now expect to raise HK$7.94 bn (RM4.22bn) from the new share sale exercise. (The Star)

Willowglen MSC Bhd it has won a RM7.8m maintenance contract awarded PowerGas Ltd Singapore. The five-year contract was for the maintenance of gas SCADA system. The commencement date of the contract is on 23rd March 2021 and will be completed by 22nd March 2026. (The Star)

Boustead Heavy Industries Corp Bhd’s (BHIC) wholly-owned subsidiary BHIC Submarine Engineering Services (BSES) has secured a RM78.1m contract from the Ministry of Defence for the Royal Malaysian Navy’s submarine facilities upkeep. The duration of the contract is from 1st January 2021 until 31st December 2022. (The Star)

Mah Sing Group Bhd has completed the testing and commissioning of its two glove production lines in its first glove manufacturing factory. The manufacturing plant, located in Kapar, Klang, is expected to start production next month. (The Edge)

Key ASIC Bhd has announced that the issuance of new shares under its private placement exercise has been fixed at 16.02 sen. The issue price was at a discount of 0.018 sen or 10.0% to 17.8 sen, which is its five-day volume weighted average market price up to and including 20th April 2021 which is the last market day immediately preceding the price-fixing date. (The Edge)

Petronas Chemicals Group Bhd (PetChem) is upbeat on better performance this year on the back of high product prices, stable production and further cost optimisation in the pipeline. Since its record performance in FY18, PetChem has seen two consecutive years of decline in profit and bottom line as the industry grappled with low oil prices and stiff competition. (The Edge)

Brahim’s Holdings Bhd has received a payment default notice from OCBC Al-Amin Bank Bhd as the airline caterer was unable to fully settle the overdue rental sum of RM49.9m as at 1st April 2021 under an Islamic financing facility granted by OCBC to Brahim’s, which has been contending with the impact of the Covid-19 pandemic. (The Edge)

Kamdar Group (M) Bhd has reported that PKF Malaysia has resigned as its external auditor as the group intends to appoint another audit firm. PKF Malaysia was reappointed as the group's auditor at Kamdar's annual general meeting on 29th September 2020 to hold office until the conclusion of the next AGM of the company. The group did not provide further elaboration on why it intends to replace its auditor. (The Edge)

Eupe Corp Bhd’s 4QFY21 net profit rose 14.8% YoY to RM10.9m, on the back of higher profit margins from its Northern Region projects. Revenue for the quarter, however, fell 8.2% YoY to RM71.4m. (The Edge)

Vitrox Corp Bhd’s 1QFY21 net profit rose 45.7% YoY to RM30.7m, on strong demand for its machine vision system which is one of its core products that are used in the semiconductor and electronics packaging industries for equipment inspection. Revenue for the quarter grew 43.9% YoY to RM129.9m. (The Edge) United Plantations Bhd's 1QFY21 net profit fell 7.8% YoY to RM74.8m, on higher operational expenses. Revenue for the quarter, however, grew 25.3% YoY to RM399.7m. (The Edge)

Cahya Mata Sarawak Bhd (CMS) deputy group chairman Datuk Seri Mahmud Abu Bekir Taib has reported that he is seeking leave of absence from all his positions in the group, as the group launches an investigation into allegations of conflict of interest involving him and former CMS chief information officer Karl Vink @ Khalid Abdullah. (The Edge)

Vizione Holdings Bhd’s 1QFY21 net profit stood at RM1.0m on the back of revenue of RM63.8m, boosted by its new healthcare division, which has contributed over RM2.5m in operating profit. No YoY comparative figures were provided following its change of financial year end to 30th November, from 31st May. (The Edge)

Source: Mplus Research - 23 Apr 2021