Market Review

Malaysia: The FBM KLCI (+0.9%) recorded its third-day winning streak after lingers the in positive territory for the entire trading session, largely boosted by gains in gloves heavyweights. The lower liners extended their gains, boosted by the improved trading liquidity, while the broader market closed mostly higher.

Global markets: The US stockmarkets ended mixed as the Dow (-0.2%) retreated, but both the S&P 500 and Nasdaq added 0.2% and 0.9% respectively, driven by the strong corporate earnings. European stockmarkets advanced after recovering all their intraday losses, while Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI extended gains for the third consecutive session, partly powered by the persistent buying interest in glove counters on the back of surging Covid-19 infections in several countries such as India and Brazil. Nevertheless, the upward momentum in glove stocks may be waning once the Covid-19 cases, coupled with the ongoing vaccination programme. Meanwhile, we believe market sentiment may remain cautious ahead of any potential lockdown announcement in the near future.

Sector focus: We continued to like the packaging stocks amid elevated demand for packaging and delivery during MCO period. Besides, investors may put technology stocks on their radar following the rise in Nasdaq overnight. Also, transportation and logistics stocks could remain under the limelight given the demand outstripping the supply as of this juncture for the dry bulk shipping segment.

The FBM KLCI closed above the EMA20 level for the second session, crossed the resistance of 1,615 level, Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI was hovering above the 50 level. Should the key index manage to stay above 1,615, the next resistance is pegged at 1,635, while the support will be located at 1,600-1,615.

Company Brief

Kerjaya Prospek Group Bhd has reported that the company and its joint venture partner Gamuda Bhd have won the RM202.6m contract to build a marine bridge in Penang. The bridge will link Jalan Gurney to Seri Tanjung Pinang Phase 2 island. The infrastructure works of the Contract are expected to commence on 4th May 2021 and will take 30 months to complete from the commencement date. (The Star)

Aneka Jaringan Holdings Bhd has secured a subcontract from IJM Construction Sdn Bhd for work on the West Coast Expressway worth RM77.8m. The subcontract is to be completed by 15th October 2022. (The Star)

Top Glove Corp Bhd has resolved all 11 International Labour Organization (ILO) indicators of forced labour, noting that the resolution of the 11 ILO indicators of forced labour was verified by independent international UK consultant Impactt Ltd in its report dated 22nd April 2021. (The Edge)

KPower Bhd has secured four EPCC contracts with a total value of approximately RM510.0m in Pahang and Perak. KPower's unit KPower Engineering Sdn Bhd was awarded the contracts by Cabaran Hijau Sdn Bhd, Selat Serasi Sdn Bhd, Denai Delima Sdn Bhd and Koridor Mentari Sdn Bhd. (The Edge)

IJM Corp Bhd clarified that it has not received any formal proposal or offer from any party expressing interest for a corporate merger at this juncture. Noting that it constantly evaluates various proposals or initiatives, including those that it may receive from other parties, as part of its continuous efforts to enhance shareholder value. (The Edge)

IGB Real Estate Investment Trust's (IGB REIT) 1QFY21 net property income fell 36.0% YoY to RM43.7m, largely due to lower car park income and higher allowance for impairment of trade receivables as a result of Covid-19. Revenue for the quarter fell 20.5% YoY to RM99.4m. A distribution of 97.5% of its quarterly distributable income, amounting to RM47.4 m or 1.33 sen per unit, payable on 31st May 2021 was approved. (The Edge)

AirAsia X Bhd (AAX), which is planning a RM500.0m fundraising exercise, intends to provide a steeper discount to its rights issue price to encourage the take-up of the cash call. The board intends to fix the rights issue price at an indicative discount of between 30.0% and 55.0% to the theoretical ex-all price of AAX shares after taking into consideration the need to price the rights shares at an issue price deemed sufficiently attractive to encourage subscription to the rights shares. (The Edge)

Mobilia Holdings Bhd's subsidiary Mobilia International Sdn Bhd has been instructed by the Ministry of Health to suspend operations from 26th April 2021 until 2nd May 2021, after some of its employees tested positive for Covid-19. The temporary suspension is expected to delay the shipment of several sales orders. (The Edge)

Yong Tai Bhd’s healthcare subsidiary has obtained the approval from the Ministry of Health's Medical Review & Ethics Committee for its Phase III clinical trial study of inactivated Covid-19 trial vaccines in Malaysia, involving 3,000 subjects. YTB Healthcare Sdn Bhd, has formalised the Phase III clinical trial with its China-based partner Shenzhen Kangtai Biological Products Co Ltd since Dec-2020. (The Edge)

Kanger International Bhd is buying a 51.0% stake in building materials supplier Sung Master Holdings Sdn Bhd for RM94.8m, which will be satisfied by a combination of cash of RM52.0m and the issuance of 713.2m new Kanger shares at 6.0 sen apiece for the remaining RM42.8m. The RM52.0m cash will be partially funded through the proceeds of a proposed subscription agreement entered with Kanger's executive director Steven Kuah Choon Ching for the subscription of 769.5m shares at six sen each, which would raise a total of RM46.2m. The remainder will be sourced from internal funds and bank borrowings. (The Edge)

Datuk Mohamed Sharil Mohamed Tarmizi has stepped down as Opcom Holdings Bhd's chairman following his appointment to the board of Digital Nasional Bhd (DNB). The Malaysian Communications and Multimedia Commission has stipulated that a director of DNB, the government's special purpose vehicle to deploy 5G in the country shall not be a director or officer of a telecommunications equipment provider. (The Edge)

Source: Mplus Research - 27 Apr 2021