Market Review

Malaysia: The FBM KLCI (-0.8%) recorded its fourth session of decline, dragged down by potential delay in Phase 3 of Covid-19 vaccination programme, coupled with rising Covid-19 cases. The lower liners were downbeat, while the Energy sector (+1.1%) outperformed the negative broader market.

Global markets: The US stockmarkets ended mostly higher as the Dow and S&P 500 climbed 0.3% and 0.1% respectively, boosted by a flurry of stronger-thanexpected corporate earnings. European stockmarkets were buoyed by Eurozone’s IHS Markit Composite PMI that rose to 53.8 in April 2021, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI declined for the fourth consecutive session due to persistent selling pressure from the foreigners and the broader market may further consolidate as concerns over the expansion of MCO 3.0 to several districts in Johor, Perak and Terengganu, which may dampen the buying interest today. Investors will keep an eye on the overnight policy rate (OPR) announcement by Bank Negara Malaysia (BNM). On a side note, the government has launched a RM3.5bn Jaringan Prihatin stimulus package to subsidise data plan subscriptions and mobile device purchases. Commodities wise, oil prices have been rising, boosted by higher fuel demand amid easing of lockdowns in the US and parts of Europe during summer.

Sector focus: We expect the launch of Jaringan Prihatin may shine a light on the telecommunication sector. Besides, we continue to like sectors with high earning certainties amid the pandemic, including essential consumer, packaging and lumber related stocks.

The FBM KLCI saw a fourth consecutive session decline with the EMA20 line tipping downwards. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI was hovering below the 50 level; MACD line is still below the zero level. The resistance is pegged along 1,600-1,620, while the support is set around 1,565, followed by 1,555.

Company Brief

Supermax Corp Bhd’s 3QFY21 net profit soared 14.1x YoY to RM1.00bn, boosted by the higher ASP. Revenue for the quarter jumped 333.8% YoY to RM1.94bn. The company has declared a special dividend of 13 sen a share, payable on 8th June 2021. (The Star)

Prestar Resources Bhd’s 1QFY21 net profit jumped 351.7% YoY to RM18.3m, boosted by firm demand for its steel products. Revenue for the quarter increased 49.6% YoY to RM140.2m. (The Star)

Cahya Mata Sarawak Bhd has suspended its group chief financial officer Syed Hizam Alsagoff for 30 days with immediate effect. The suspension was to facilitate investigations into allegation of possible financial mismanagement in relation to the company's investments and operations. The allegations were received through the Group’s whistle blower channel. (The Star)

Gas Malaysia Bhd’s 1QFY21 net profit rose 16.2% YoY to RM55.6m, on higher volume of natural gas sold and higher contribution from joint ventures. Revenue for the quarter, however, fell 28.2% YoY to RM1.15bn. (The Edge)

Dagang Nexchange Bhd (DNeX) expects to raise up to RM642.0m through its proposed issuance of new placement shares representing 30.0% of its existing number of issued shares. The placement is based on an indicative issue price of 72 sen per share and the proceeds, other than RM20,000 for working capital and RM3,500 for estimated placement-related expenses, would be used for acquisitions and other business expansion or investment. (The Edge)

Kerjaya Prospek Group Bhd’s wholly-owned subsidiary Kerjaya Prospek (M) Sdn Bhd today accepted a letter of award from Eastern & Oriental Bhd's (E&O) indirect subsidiary Persada Mentari Sdn Bhd for an RM28.4m contract involving construction work for a proposed serviced apartment project at Penang's Seri Tanjung Pinang reclaimed land. The contract covers, among others, earthwork and basement construction for the proposed two blocks of 35-storey serviced apartments. (The Edge)

Two wholly-owned subsidiaries of UEM Sunrise Bhd have been slapped with additional taxes and penalties amounting to RM82.2m by the Inland Revenue Board (IRB). The notice of additional assessment and penalty of RM8.5m for the years 2013 to 2018 was issued to UEM Land Bhd, following the removal of Bumiputera quota and low-cost requirements at its selected developments in Iskandar Puteri. Symphony Hills Sdn Bhd got a tax bill for RM73.7m, following the reversal of tax losses utilisation for the years of assessment from 2006 to 2017. (The Edge)

Dufu Technology Corp Bhd’s 1QFY21 net profit grew 38.0% YoY to RM19.5m, on the back of an increase in volume loading by customers related to hard drives (HDD) components. Revenue for the quarter gained 26.3% YoY to RM79.5m. (The Edge)

Source: Mplus Research - 6 May 2021