Market Review

Malaysia: The FBM KLCI (-0.4%) resumed trading on a dour note hampered by the rising Covid-19 cases that offset the gains in gloves heavyweights as the key index recorded 1.8% MoM gains in April 2021. The lower liners closed mixed, while the broader market closed mostly lower with the Technology sector (-1.0%) continued to underperform.

Global markets: The US stockmarkets retreated as the Dow fell 0.5%, dragged down by quick profit taking in energy and technology shares, whilst the USD climbed against a basket of currencies. European stockmarkets ended mostly lower, while Asia stockmarkets were downbeat.

The Day Ahead

In tandem with regional weakness, the FBM KLCI ended the week lower with persistent selling in technology counters on the broader market. Investors are likely to stay cautious as Covid-19 daily confirmed cases remained elevated and may keep an eye on Malaysia's Markit Manufacturing PMI that will be released today and the Bank Negara Malaysia’s interest rate decision on Thursday. Commodities wise, both the CPO and Brent oil prices have seen a decline. In the US, growth momentum is building in line with higher estimated payrolls and lower unemployment in April on the back of climbing vaccination rate.

Sector focus: With the rising Covid-19 infections, investors may focus on essential consumers, packaging, healthcare related stocks. Besides, trading interest may be noticed in the technology sector following recent pullback ahead of the results. Meanwhile, we expect elevated metal-related price may provide buying momentum into industrial products companies at least for the near term.

The FBM KLCI closed below the EMA 20 level as investors stayed on the sidelines. Technical indicators turned negative as the MACD Histogram has extended a red bar, while the RSI is hovering below the 50 level. With that, the key index may be struggling to stay above the 1,600 support level. Should the key index manage to climb, resistance level is pegged along 1,615-1,635.

Company Brief

MR DIY Group (M) Bhd’s 1QFY21 net profit jumped 113.5% YoY to RM124.8m, mainly driven by an increase in average monthly sales per store, as well as an increase in the number of stores, from 628 in 1Q20 to 788 in 1Q21. Revenue for the quarter grew 62.9% YoY to RM870.2m. A dividend of 0.8 sen per share, payable on 17th June 2021 was declared. (The Star)

IHH Healthcare Bhd has completed the sale of its entire 50.0% equity stake in its Apollo Gleneagles Hospital Ltd, Kolkata (AGHL) joint venture to Apollo Hospitals Enterprise Limited (Apollo). The disposal was in line with the group’s continued execution of its ‘refreshed strategy’, of which one pillar is to review its portfolio and capital deployment to prioritise returns. India is the group’s fourth home market, together with Malaysia, Singapore and Turkey. (The Star)

FGV Holdings Bhd's (FGV) subsidiaries, MSM Malaysia Holdings Bhd (MSM) and FGV Integrated Farming Holdings Sdn Bhd (FGVIF), have entered into a binding term sheet on the respective disposal and acquisition of a 100.0% stake of MSM's wholly-owned subsidiary MSM Perlis Sdn Bhd. With an initial disposal consideration of RM175.0m, the agreement is set to be completed by 3Q21. (The Edge)

Priceworth International Bhd has proposed the consolidation of every 10 of its shares into one share, along with the issuance of notes of up to RM100.0m. On its note issue, the group will be issuing 2.0% redeemable convertible notes due in 2024, worth RM100.0m in aggregate nominal value. (The Edge)

KLCCP Stapled Group, which comprises KLCC Property Holdings Bhd and KLCC REIT Management Sdn Bhd, has appointed Md Shah Mahmood as its new CEO effective 1st May 2021. Md Shah would replace Datuk Hashim Wahir, who is retiring after almost 14 years serving the group. (The Edge)

Sapura Resources Bhd’s 4QFY21 net loss narrowed to RM3.3m, from a net loss of RM15.4m recorded in the previous corresponding quarter, mainly attributable to a one-off provision for a claim from a previous customer of RM8.2m and a one-off impairment loss of RM3.3m in 4QFY20. Revenue for the quarter, however, fell 14.0% YoY to RM11.4m. (The Edge)

SapuraOMV Upstream (Malaysia) Inc is disposing of its entire interests in several producing assets offshore Peninsular Malaysia to Jadestone Energy plc for US$9.0m (RM37.0m), subject to closing adjustments. SapuraOMV is a strategic partnership between Sapura Energy Bhd and OMV Exploration & Production GmbH, a subsidiary of Austria's OMV Aktiengesellschaft. The divestment will allow the company to consolidate its position to focus on discovered resources off the coast of Sarawak, as well as exploration opportunities in Western Australia.

Meanwhile, Datuk Iain Lo will be joining Sapura Energy as an independent and nonexecutive director. Lo had recently retired as chairman of Shell Malaysia and has three decades of experience in Shell’s exploration and production, gas and downstream businesses, both in Malaysia and abroad. The group has also appointed Bernard di Tullio as a non-independent and non-executive director. He had served as the president and chief operating officer of Technip Group Worldwide from 2005 to 2011. Sapura Energy also appointed Datuk Mohd Anuar Taib as executive director, by virtue of his role as group CEO. (The Edge)

The US Customs and Border Protection has yet to lift the withhold release order against Top Glove Corp Bhd's products as the authorities are still reviewing the glove manufacturer’s submission on recent clarification over the resolution of the 11 International Labour Organization indicators of forced labour. (The Edge)

Al-'Aqar Healthcare REIT's funding conduit Al-'Aqar Capital Sdn Bhd will fully redeem the latter's RM1.00bn Islamic bonds on 4th May 2021 in conjunction with the maturity of the medium-term notes under the Islamic principle of Ijarah, according to facility agent Maybank Investment Bank Bhd. (The Edge)

Fajarbaru Builder Group Bhd is looking at launching new property projects towards the 2H21 once market conditions improve. The construction and property development outfit is upbeat on its property segment’s outlook in anticipation of the economic recovery complemented by the national Covid-19 Immunisation Programme. (The Edge)

Sarawak Oil Palms Bhd (SOP) is acquiring the remaining 40.0% equity interest not already held by the company in SOP Plantations (Sabaju) Sdn Bhd (SOP Sabaju) from Shin Yang Holding Sdn Bhd for RM45.9m cash. SOP has entered into a conditional share sale agreement with Shin Yang for the proposed acquisition. (The Edge)

Source: Mplus Research - 3 May 2021