Market Review

Malaysia: The FBM KLCI (-0.4%) extended its losses after lingering in the negative zone for the entire trading session, dragged down by weakness in plantation and banking heavyweights yesterday. The lower liners also extended their losses, while all 13 major sectors on the broader market finished lower with the Technology sector (-2.9%) taking the worst hit.

Global markets: The US stockmarkets extended their losses as the Dow (-1.4%) sank on the on-going concern over the inflationary pressure. European stockmarkets were downbeat, while Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI settled lower in tandem with the regional peers as market sentiment was dampened by nationwide expansion of MCO. Taking cues from the negative Wall Street overnight performance, we expect lacklustre trade on the local bourse ahead of the Aidilfitri holiday. However, we believe bargain hunting activities may emerge within the energy sector as Brent oil price gained momentum due to the lingering fears of gasoline shortage as North America’s biggest petroleum pipeline was affected for days following the cyberattack.

Sector focus: We expect to see trading interest in energy counters amid concerns over the supply shortage situation in the US. Besides, we opine that bargain hunting activities may emerge in laggard counters with high earning certainties amid MCO, such as plastic-related and packaging stocks. Also, some of the glove counters may have a relief rebound, but upside might be short lived given the ongoing vaccine rollout plan globally could see Covid-19 subsiding moving forward.

The FBM KLCI retreated for the second trading session due to persistent selldown in selected heavyweights. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI was hovering below the 50 level. We expect thin trading on the key index on the half-day trade, with support pegged around 1,555-1,565, while the resistance is set along 1,600-1,620.

Company Brief

Public Bank Bhd’s 1QFY21 net profit grew 15.1% YoY to RM1.53bn, on the back of further expansion of its loans and deposits businesses as well as fee-based revenue growth. Revenue for the quarter improved 8.8% YoY to RM5.03bn. (The Star)

Malayan Banking Bhd's (Maybank) 100.0%-owned subsidiary Maybank Islamic Bhd has announced the buy-back of RM1.50bn worth of Islamic bonds via private treaty under the latter's Islamic commercial papers and medium-term notes programme of up to RM10.0bn. (The Edge)

FGV Holdings Bhd has appointed Azman Ahmad, who is the group divisional director of logistics & support business, as officer-in-charge to cover the duties and responsibilities of the group chief executive officer (CEO) effective 16th May 2021. Azman is the officer-in-charge until a new CEO is appointed, following the resignation of Datuk Haris Fadzilah Hassan which was announced last month. Azman will still continue his current role, which he has been holding since 1st January 2021. (The Edge)

Syed Md Najib Syed Md Noor is stepping down as Pos Malaysia Bhd's group CEO with effect from 1st June 2021, after serving the company for close to three years since the appointed to his post in October 2018. Pos Malaysia is now searching for a suitable replacement. (The Edge)

WTK Holdings Bhd has clarified that it is not involved in any logging operations in Papua New Guinea (PNG), following an article in the Sarawak Report recently that said the PNG government planned to audit 20 delinquent logging companies in the country over suspected tax evasion. (The Edge)

Bina Darulaman Bhd has secured a RM431.0m contract to upgrade the Pelubang water treatment plant in Kedah. The contract was awarded to its wholly-owned BDB Synergy Sdn Bhd by the Kedah state government. The three-year contract commences on 20th May 2021. (The Edge)

Careplus Group Bhd is acquiring a piece of land measuring 40,680 sqm (10.1-ac) in Oakland Industrial Park, Seremban for RM35.5m cash from Rapid Synergy Bhd. The acquisition is in line with its immediate plans to increase its existing manufacturing capacity by commissioning new production lines for gloves. The property will be earmarked for warehousing, gloves packing as well as Careplus' future operational needs. (The Edge)

Media Chinese International Ltd (MCIL) expects to record a net profit of not less than US$1.7m (RM7.0m) for 4QFY21 ended 31st March 2021, against a net loss of US$1.8m (RM7.4m) recorded in the previous corresponding quarter. This was mainly attributable to the gradual improvement in business conditions in Hong Kong as well as cost savings across all the group's business operations. (The Edge)

Genting Bhd's biotechnology arm Celularity Inc has reported that US-listed software company Palantir Technologies Inc will make an investment in the company under the planned Celularity-Palantir multi-year strategic partnership. The move comes following Celularity's planned business combination with US-listed GX Acquisition Corp, a special purpose acquisition corporation. (The Edge)

JF Technology Bhd's 3QFY21 net profit jumped 115.3% YoY to RM3.7m, underpinned by sustained robust demand from its customers amid the Covid-19 pandemic. Revenue for the quarter gained 55.9% YoY to RM9.6m. (The Edge)

Source: Mplus Research - 12 May 2021