Market Review

Malaysia: The FBM KLCI (+0.04%) ended on a flat note as gains in gloves heavyweights were tempered by the weakness in selected banking heavyweights on last Friday. The lower liners closed advanced, while the broader market closed mostly higher, led by the Transportation & Logistics (+2.0%) sector.

Global markets: The US stockmarkets rebounded as the Dow (+0.7%) advanced on the strong economic data following IHS Markit Manufacturing PMI in April 2021 that edged up to 60.6; the biggest expansion in history, whilst new home sales 20.7% YoY to 1.0m; the reading since August 2006. European stockmarkets retreated, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI finished the week on a flat note amid tepid market sentiment, but the key index was supported by buying interest in glove counters over the past week. We opine the key index may continue to trend sideways in the holidayshortened week without significant catalyst in the market. The market may focus on the US’s Federal Reserve interest rates decision to gauge their investing direction. Trading interest may remain robust on small cap and lower liners.

Sector focus: We expect buying interest in glove stocks to continue ahead of the earnings season given the high earning certainties in the sector amid rising Covid- 19 cases globally. Besides, investors may focus on technology stocks following the rise in Nasdaq. Should there be any lockdown concerns globally, we believe the plastic industry may be on the lookout given the increasing demand from food takeaways.

The FBM KLCI stayed firmer above the 1,600 psychological level but struggled to cross above its immediate resistance level at 1,615. Technical indicators remained positive as the MACD Histogram has turned into a green bar, while the RSI was hovering above the 50 level. The key index is likely to trade in consolidation mode, with resistance envisaged along 1,615-1,635; while the support is set at 1,545- 1,565.

Company Brief

Jardine Cycle & Carriage Ltd (offerer) has extended its unconditional voluntary takeover offer for the remaining shares in Cycle & Carriage Bintang Bhd (CCB) that it has not already own. The closing time and date for the acceptances of the offer had been extended to 12th May 2021 from 28th April 2021 at 5.00pm. As at 5.00pm on 23rd April 2021, the offerer held 74.1m ordinary shares representing 73.5% total issued and paid-up capital of CCB. (The Star)

Berjaya Corp Bhd (BCorp) CEO and shareholder Jalil Abdul Rasheed has been appointed as the deputy chairman of its listed subsidiary Redtone Digital Bhd. BCorp owns a 52.4% stake in the company while Sultan of Johor Sultan Ibrahim Ibni Almarhum Sultan Iskandar owns a 17.3% stake in the telecommunication service provider, according to Redtone’s FY20 annual report. (The Edge)

Genting Group Bhd, which will open Resorts World Las Vegas on 24th June 2021, are among companies keen on a Chicago casino resort project. N no decision was made so far regarding the location of the casino resort set to open in 2025 and the city of Chicago will award the project by early 2022. (The Edge)

AirAsia Group Bhd expects clarity on its fund-raising efforts in the next two to three months, as the company continues talks with prospective funders. The budget airline has been looking to raise up to RM2.50bn to weather the pandemic-induced slump in global travel, initially aiming to secure the funds by the end of last year. So far, it raised US$82.0m from TPG Capital executives, Aimia Inc and others through private share placements. (The Edge)

Sime Darby Bhd's 36.6%-owned joint venture company Weifang Port Services Co Ltd (WPS) has entered into an agreement with CCCC Tianjin Dredging Co Ltd to settle 187.0m yuan (RM118.0m) interest on late payment by WPS. Under the new settlement agreement, WPS is required to pay the outstanding sum by 20th November 2021. (The Edge)

ACE Market-listed Careplus Group Bhd is seeking to transfer its listing status to the Main Market of Bursa Malaysia. It expects the proposed transfer to the Main Market to be completed in 2H21. (The Edge)

Fintec Global Bhd has dispelled the notion that it is shuffling assets within the group. Since the trading of marketable securities is part of the company's ordinary course of business, Fintec has reported that it is incorrect to suggest that funds or assets of the company are passed around. This is in response to an article in The Edge Malaysia's 12th-18th April 2021 edition entitled "Hidden Hands Behind Penny Stock Surge Under Scrutiny". (The Edge)

Sunsuria Bhd's subsidiary Sunsuria City Sdn Bhd (SCSB) has revoked the deal to sell a piece of land in Salak Tinggi, Putrajaya South to its 60.0%-owned joint venture (JV) company Sunsuria Everrich Sdn Bhd (SESB). This is because SCSB's JV partner Welcome Global Co Ltd is unable to pay the remaining sum for the land purchase. Following this, SCSB has taken over Welcome Global's shares in SESB and will develop the property on its own since the property is located within its development project at Sunsuria City, Sepang. (The Edge)

Maxis Bhd’s 1QFY21 net profit slipped 6.4% YoY to RM334.0m due to lower revenue which declined 4.8% YoY to RM2.23bn. A first interim dividend of four sen per share, payable on 30th June 2021 was declared. (The Edge)

Digi.Com Bhd’s 1QFY21 net profit fell 20.2% YoY to RM264.8m, adversely impacted by mark-to-market adjustments on interest rate swaps. Revenue for the quarter declined marginally by 0.6% YoY to RM1.55bn. An interim dividend of 3.4 sen, payable on 25th June 2021 was declared. (The Edge)

Guocoland (M) Bhd’s 3QFY21 net profit stood at RM73.2m vs. a net loss of RM11.4m recorded in the preceding quarter due to the disposal of land in Jasin, Melaka and higher revenue. Revenue for the quarter jumped 266.7% YoY to RM334.9m. (The Edge)

Greatech Technology Bhd’s 1QFY21 net profit jumped 152.3% YoY to RM46.7m, mainly due to a higher reversal of unused provision for warranties of RM8.5m made in the prior years, as well as favourable gross margin mix benefits realised from engineering design works. Revenue for the quarter rose 80.4% YoY to RM95.1m. (The Edge)

Freight Management Holdings Bhd has reported that it is not aware of any reasons for the steep rise in its share price, in its response to an Unusual Market Activity (UMA) query from Bursa Malaysia on 23rd April 2021. The stock soared 29.8% or 45 sen to a record high of RM1.96, while trading volume ballooned to 12.8m shares. (The Edge)

Cypark Resources Bhd has inked an agreement with the Melaka State government to participate in a Waste-To-Energy public-private partnership at Sungai Udang, Melaka. The group has entered into a cooperation agreement with PKNM Energy Sdn Bhd (PKNME), which is a wholly-owned subsidiary of Perbadanan Kemajuan Negeri Melaka, to participate in the WTE project. (The Edge)

Tashin Holdings Bhd is acquiring land and buildings next to its existing factory in Perai, Penang, for RM43.5m as it seeks to increase its production capacity to process slit coils, steel sheets and steel products. The expansion will see its annual production capacity for steel processing and products manufacturing facilities increase to 222,720 tonnes pa., from 149,520 tonnes currently. (The Edge)

Source: Mplus Research - 26 Apr 2021