Market Review

Malaysia: The FBM KLCI (+0.5%) recorded its third straight winning streak with more than two-third of the key index components finished higher alongside with the positive sentiment across regional peers. The lower liners rebounded, while all 13 major sectors on the broader market advanced, led by the Energy sector (+3.9%) as crude oil prices marched higher.

Global markets: The US stockmarkets extended their losses as the Dow fell 0.8%, as investors ponder on the latest minutes from the US Federal Reserve meeting today that may bring some clue on future interest rate direction. European stockmarkets closed mostly lower, while Asia stockmarkets were upbeat.

The Day Ahead

The FBM KLCI tracked regional uptrend to close at intraday high on bargain hunting following the selldown on broader market in the previous session, as well as the global commodities rally. CPO price surged close to 5.0% to end above RM4,450 in tandem with the rise in soybean oil on estimation of weaker output in Malaysia. Nevertheless, the commodities-fuelled rally may consolidate over the near term if concerns over stricter lockdown persist amid high Covid-19 infection rate in the country.

Sector focus: Investors may look at plantation stocks given the sharp rise in CPO price. Besides, we expect to see some technical rebound in the technology sector ahead of the reporting season as the stocks might be oversold after the recent selldown.

The FBM KLCI extended its gains for the third straight session, pointing towards the 1,600 psychological level. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was hovering below the 50 level. To confirm an uptrend, the key index should cross and stay above the 1,600 psychological level, support is located around 1,555-1,565.

Company Brief

Carlsberg Brewery Malaysia Bhd’s 1QFY21 net profit fell 8.9% YoY to RM66.5m, on the back of lower sales in Malaysia. Revenue for the quarter declined 9.8% YoY to RM532.0m. (The Star)

Censof Holdings Bhd’s 4QFY21 net profit stood at RM12.7m vs. a net loss of RM74.0m recorded in the previous corresponding quarter, due fair value adjustment on short-term investment of about RM16.2m and fast track of project deliverables and contracts awarded. Revenue for the quarter improved marginally by 0.6% YoY to RM32.7m. It announced a dividend of 0.75 sen a share, payable on 25th June 2021. (The Star)

Tuju Setia Bhd’s wholly owned subsidiary Pembinaan Tuju Setia Sdn Bhd has accepted the letter of award (LOA) from Enso Development Sdn Bhd for the construction of a high-rise construction project in Seri Kembangan, Selangor. The contract valued at RM189.0m is for a duration of 38 months commencing on 1st June 2021 and to be completed by 31st July 2024. (The Star)

GDB Holdings Bhd (GDB) 1QFY21 net profit rose 53.7% YoY to RM8.8m, as construction for certain projects that were in advanced stages of construction, as well as contribution from completed projects. Revenue for the quarter improved 11.2% YoY to RM111.1m. (The Star)

Dagang NeXchange Bhd (DNeX) has announced that its Indonesian consortium has bagged a three-year contract, with an option to extend for a further three years, to supply installation and maintenance support services of submarine cable communications system via the group's vessel. With an assumption of 65.0% vessel utilisation rate in a year, estimated total revenue per year including standby charge is 215.0bn Rupiah (RM62.0m). (The Edge)

Sarawak Consolidated Industries Bhd's unit SCIB Properties Sdn Bhd has secured an estimated RM120.0m contract to build high-rise residential units within Sering district in Kota Bharu, Kelantan under the PR1MA Corp Malaysia affordable homes scheme. (The Edge)

Econpile Holdings Bhd's unit Econpile (M) Sdn Bhd has secured a foundation and structure works contract worth RM27.1 m from Satin Magic Sdn Bhd, to undertake the work package which includes demolition, site clearance, earthworks, site works and reinforced concrete works for a luxurious seven-storey apartment building located in Bukit Damansara, Kuala Lumpur. (The Edge)

Green Packet Bhd plans to raise up to RM328.4m through a rights issue with free detachable warrants, to fund the expansion of its digital services business and for general working capital. The exercise will entail an indicative issuance of up to 965.8m rights shares together with up to 643.9m warrants, based on an indicative entitlement basis of three rights shares for every five existing shares held, together with two free detachable warrants for every three rights shares subscribed. The gross proceeds to be raised from rights issue with warrants are based on an indicative issue price of 34 sen per rights share. (The Edge)

Media Prima Bhd group managing director Datuk Iskandar Mizal Mahmood has resigned from the position with immediate effect, four months ahead of the end of his contract on 30th September 2021. The group's operations will be led by group executive director Rafiq Razali until further notice. (The Edge)

GHL Systems Bhd announced that PayLater by Grab will be made available to selected online GHL merchants that are utilising the eGHL Payment Gateway. PayLater is a payment option piloted by Grab to provide users with a convenient way to pay for their online purchases and manage their monthly cash flow. The move also removes the burden of relying on other payment methods such as credit cards, which normally come with additional charges of annual fees, and late repayment fees plus interests. (The Edge)

AirAsia Group Bhd has appointed Amanda Woo as the chief executive officer of airasia super app, previously known as airasia.com, with effect on 19th May 2021. In her new role, Woo will be reporting to Aireen Omar, president (AirAsia Digital), AirAsia Group. (The Edge)

Jardine Cycle & Carriage Ltd (Jardine CCL) is further extending for one last time on the deadline of its takeover offer for Cycle & Carriage Bintang Bhd shares it does not already own. The deadline for the acceptances of the offer is now extended from 21st May 2021 to 4th June 2021. As of 18th May 2021, the total number of shares held by Jardine CCL stands at 76.2m, representing a 75.6% stake. (The Edge)

Minetech Resources Bhd has disposed of its 60.0% stake in quarry operator Bertam Capital Sdn Bhd for RM10.2m. Minetech expects to receive an estimated one-off gain of RM1.6m after taking into consideration the estimated expenses of RM70,000 in relation to the disposal. The net cash proceeds from the disposal received will be mainly used for working capital and/or for investments in its existing businesses, defraying estimated expenses in relation to the disposal, as well as further repayment of borrowings. (The Edge)

Source: Mplus Research - 19 May 2021