Market Review

Malaysia: The FBM KLCI (+0.1%) recovered all its intraday losses to close marginally higher, largely boosted by the eleventh hour bargain hunting in selected index heavyweights. The lower liners closed mostly lower, while the broader market ended mixed with the technology sector (-1.6%) taking the biggest dive.

Global markets: The US stockmarkets ended on an upbeat note as the Dow (+0.7%) was boosted by 1Q21 GDP that rose 6.4% YoY, weekly job claims fell to the lowest level since pre-pandemic levels and prospect USD1.8 trillion in new government stimulus spending. European stockmarkets closed in the red, while Asia stockmarkets finished mostly higher.

The Day Ahead

After recouping all the intraday losses, the FBM KLCI closed with marginal gains of 0.1% and remained above 1,600 psychological level. Meanwhile, we expect the glove heavyweights to resume its rebound move over the near term given the rising Covid-19 infections globally. On the commodities wise, the CPO price staged a pullback after recent rallies, while the oil price climbed above USD68.

Sector focus: We opine that steel or metal related stocks may remain attractive over the near term amid global spike in steel demand. Besides, we believe there is still some room for trading on plastic and packaging counters ahead of the release of the latest quarterly results. Also, market players might be looking into O&G stocks amid firmer crude oil prices.

The FBM KLCI finished with intraday high prior to the public holiday, showing a hammer candle on Wednesday. Technical indicators remained mixed as the MACD Histogram has extended a red bar, while the RSI was hovering above the 50 level. However, we expect the market to trade in consolidation with resistance level pegged along 1,615-1,635, while the support is set around 1,565-1,600.

Company Brief

Maxis Bhd has been appointed by MSM Malaysia Holdings Bhd (MSM) to design, supply, commission and manage their nationwide network infrastructure. By leveraging its Programmable Network (MPN), Maxis will be providing a diverseroute and secure managed Internet connectivity to all MSM sugar refinery plants and offices nationwide in the Klang Valley, Penang, and Johor. (The Star)

Lotte Chemical Titan Holding Bhd’s (LCT) 1QFY21 net profit stood at a RM441.3m vs. a net loss of RM169.5m recorded in the previous corresponding quarter, due to the increase in average product selling price and sales volume, in tandem with the Covid-19 vaccine-driven global economic recovery. Revenue for the quarter climbed 62.3% YoY to RM2.37bn. (The Edge)

Petronas Dagangan Bhd (PetDag) remains cautious about the outlook of its retail segment business for the year, as interstate travel is still limited due to the rising Covid-19 cases in the country. However, the group witnessed a slight recovery in the retail segment in March 2021 and remains upbeat about the prospect of resumption in economic activities, including interstate travel in 2H21. (The Edge)

Ancom Bhd has proposed to acquire all assets and liabilities of Nylex (Malaysia) Bhd for RM179.3 m. As Ancom currently holds approximately 50.3% in Nylex, this will be set off against its entitlement under the proposed distribution at RM96.7m, which is for the remaining 49.7% stake it does not currently own. The net purchase consideration shall be satisfied via payment of RM50.0m in cash, with the balance RM46.7m fulfilled through issuance of 31.1m new Ancom shares at an issue price of RM1.50 per share. (The Edge)

FGV Holdings Bhd expects 2021 to be another challenging year, no thanks to its labour shortages and the volatility of crude palm oil (CPO) prices that affect the company’s plantation business, which contributes 82% to the group’s revenue. The group, however, expects its sugar business to continue improving its operating and financial performance. (The Edge)

IJM Corp Bhd has secured two contracts with a combined value of RM327.6m. These comprise a RM89.8m contract to construct the building infrastructure and public realm works in Tun Razak Exchange (TRX), Kuala Lumpur; and a RM237.8m contract for the construction of the Mezzo residential tower in The Light City, Penang. (The Edge)

Bintai Kinden Corp Bhd has increased the size of its private placement to partly pay for its acquisition of medical engineering solutions provider Johnson Medical International Sdn Bhd (JMI). The placement will now comprise 191.0m shares or 50.0% of the group's share capital, and seeks to raise RM72.6m based on an indicative price of 38 sen per share. Under the revised shares placement, RM26.0m of the total proceeds will be used to partly pay for the JMI purchase. Another RM25.0m will be used for its Holistica Development project in Penang, while RM10.1 m will be set aside for working capital requirements. (The Edge)

Malaysia Marine and Heavy Engineering Holdings Bhd’s (MHB) 1QFY21 net loss stood at RM104.4m vs. a net profit of RM6.1m recorded in the previous corresponding quarter, dragged by operating losses recorded by both its marine and heavy engineering segments. Revenue for the quarter declined marginally by 0.8% YoY to RM343.6m. (The Edge)

AMMB Holdings Bhd (AmBank), which announced an RM2.83bn settlement with the Malaysian government earlier this year over its role in the 1Malaysia Development Bhd (1MDB) fiasco, has reported that it will be booking a one-off impairment charge of RM1.79bn in its conventional and investment banking businesses for 4QFY21. The banking group will also be recording an RM148.0m impairment on the carrying investment in an associate (REIT impairment) in its 4QFY21. (The Edge)

Pavilion Real Estate Investment Trust’s (Pavilion REIT) 1QFY21 net property income (NPI) fell 9.6% YoY to RM58.9m, due to lower occupancy rates in its shopping malls amid the pandemic. Revenue for the quarter slipped 6.0% YoY to RM126.2m. (The Edge)

Samchem Holdings Bhd’s 1QFY21 net profit soared 337.6% YoY to RM19.0m, thanks to an increase in sales volume and average selling price. Revenue for the quarter increased 28.0% YoY to RM330.7m. A first interim dividend of one sen per share was proposed, subject to shareholders’ approval at the forthcoming Annual General Meeting. (The Edge)

Gadang Holdings Bhd’s 3QFY21 net profit sank 71.1% YoY to RM2.8m, dragged by lower construction activities and lower work progress for its property development projects. Revenue for the quarter fell 34.5% YoY to RM138.9m. (The Edge)

Source: Mplus Research - 30 Apr 2021