Market Review 

Malaysia: The FBM KLCI (+0.4%) snapped a four-day losing streak, boosted by the bargain hunting activities in the second half of trading session, coupled with the strong industrial output data that rose 9.3% YoY in March 2021; the highest since 2013. The lower liners extended their losses, while the broader market finished mostly lower with the Healthcare sector (-1.9%) underperformed.

Global markets: The US stockmarkets advanced as the Dow (+0.9%) recorded its fourth day winning streak after filings for unemployment benefits fell to a new low since the Covid-19 pandemic. European stockmarkets finished on a positive note, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI closed with modest gains after paring the morning session losses, but gains were capped by the weakness in index-linked glove counters amid softer glove ASP expectation and market talks over windfall tax on glove companies. Meanwhile, Bank Negara Malaysia (BNM) kept the OPR unchanged at 1.75% and this may suggest that Malaysia’s economic outlook may be neutral to upward bias despite the resurgence of Covid-19 cases as well as the implementation MCO3.0. In the US, however, jobless claims fell more than forecast as market condition improved following the economy reopen. Commodities wise, the copper price rose above USD10,000 while the CPO price surged above RM4,200.

Sector focus: Following the copper price rising above the USD10,000 level, we expect to see some buying interest in the metal-related counters. Besides, the plantation sector may be under the limelight amid firmer CPO prices above the RM4,200 level.

The FBM KLCI snapped a four-session losing streak to close at intraday high. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI was hovering below the 50 level. The upward momentum may be capped around 1,600-1,620, while the support is located 1,555-1,565.

Company Brief

Mitsui & Co. is exploring a deal to take Malaysian hospital group IHH Healthcare Bhd private. Some private equity firms have approached the Japanese trading house to team up on the potential transaction to buy out IHH’s other shareholders. Mitsui has reached out to Khazanah Nasional Bhd., IHH’s second largest shareholder, to pick up its stake. Discussions are still in the early stages and there is no certainty that Mitsui would proceed with an offer. (The Star)

Inari Amertron Bhd plans to raise up to RM1.07bn via a private placement to be used for capital expenditure, acquisitions and investments. Inari has proposed to issue up to 333.0m new shares, which accounts for 10.0% of its share capital to third party investors at an indicative price of RM3.20 a share. (The Edge)

Permodalan Nasional Bhd (PNB) chief investment officer for private and strategic investments Rizal Rickman Ramli will succeed Tan Sri Dr Zeti Akhtar Aziz as the chairman of Sime Darby Property Bhd. Zeti, who was appointed as the group’s non-independent non-executive chairman in July 2018, is retiring from her position effective yesterday. (The Edge)

Malayan Banking Bhd (Maybank) unveiled its five-year strategic plan - M25, that aims to accelerate growth in the next normal. Maybank has set its desired longterm outcomes by 2025, including a return on equity (ROE) of between 13% and 15%, a cost-to-income ratio of below 45%, earnings per share of more than 100 sen and delivering a dividend payout ratio of between 40% and 60% on a net cash basis. Additionally, Maybank will also stop financing new coal activities as part of its sustainable agenda, which currently only makes up 0.2% of the bank’s total portfolio. (The Edge)

AirAsia Group Bhd has reported that all entities performed better in March 2021, in terms of total number of passengers carried, compared with February 2021. AirAsia Malaysia recorded an increase of 84% MoM in passengers carried, while AirAsia Philippines and AirAsia Indonesia reported growth of 57% MoM and 29% MoM respectively. AirAsia Thailand managed to more than double its number of passengers carried in March 2021, compared with February 2021. (The Edge)

Berjaya Food Bhd’s 3QFY21 net profit stood at RM11.6m vs. a net loss of RM1.4m recorded in the previous corresponding quarter as the second Movement Control Order (MCO 2.0) were not as adversely impacted a year earlier. Revenue for the quarter rose 14.6% YoY to RM181.7m. (The Edge)

Sentral REIT’s 1QFY21 net property income (NPI) fell 4.2% YoY to RM31.4m, on lower revenue and higher property operating expenses amid Covid-19 pandemicdriven uncertainties which affected the Malaysian real estate market. Revenue for the quarter fell 2.8% YoY to RM41.0m. (The Edge)

Genting Malaysia Bhd's subsidiary GENM Capital Bhd will redeem bonds under the latter’s medium term notes programme of up to RM5.00bn on 11th May 2021 ahead of the RM5.00bn MTN scheme's maturity date on 31st March 2022. (The Edge)

Seni Jaya Corp Bhd has announced the appointment of Cheah See Heong, also known as Jeff Cheah, as its new CEO with immediate effect. The group also announced the appointment of Julian Koh Lu Ern, a chartered accountant, as its new independent non-executive director. (The Edge)

Cahya Mata Sarawak Bhd (CMS) has announced that its deputy group chairman Datuk Seri Mahmud Abu Bekir Taib has accepted a request from the board for him not to take the leave of absence as announced in April 2021. Mahmud requested for leave of absence on 22nd April 2021 amid the allegations, which prompted CMS to conduct an internal investigation and report the matter to authorities. (The Edge)

My EG Services Bhd (MyEG) has won a contract from MIMOS Bhd to provide service desk and its related services for a vaccine traceability system. The one-year project will be effective 1st June 2021, with an option for a further one-year extension. It is valued at RM400,000 for the first year and RM250,000 for the optional one-year extension. (The Edge)

MISC Bhd 1QFY21 net profit stood at RM429.8m, from a net loss of RM1.12bn recorded in the previous corresponding quarter, as the shipping company did not record any litigation claims. Revenue for the quarter rose marginally by 1.1% YoY to RM2.54bn. An interim dividend of seven sen per share, payable on 9th June 2021 was declared. (The Edge)

Velesto Energy Bhd will focus on recovery efforts of its rig, Velesto Naga 7, which submerged off the coast of Sarawak on Tuesday. All 101 personnel on board have been transferred safely to Miri. Currently, Velesto is unable to estimate the overall financial impact on the group from the incident but expects it to be mitigated as the rig is adequately insured. (The Edge)

Source: Mplus Research - 7 May 2021