Market Review

Malaysia: The FBM KLCI (-0.8%) trended lower for the third straight session as sentiment remain beleaguered by fear over potentially stricter lockdown measures. The lower liners also closed in the red, albeit recovering most of their intraday losses, while the Technology (+0.03%) outperformed the negative broader market.

Global markets: The US stockmarkets ended mixed as the Dow (+0.4%) extended its gains, but the S&P 500 and Nasdaq shed 0.1% and 0.5% respectively, dragged down by weakness in technology stocks. European stockmarkets closed mostly higher, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI finished lower for the third straight session as investors’ sentiment remains tilted to the downside amid record high Covid-19 confirmed cases. With the enhanced movement control order (EMCO) being implemented in wider areas in the country, we expect weaker trading sentiment for this week (do note that market will be closed for Wesak Day on Wednesday). Meanwhile, the selldown in technology stocks may continue following overnight declines in Nasdaq. Investors may focus on high earning certainties stocks amid reporting season.

Sector focus: Given the strong set of results from steel related companies, traders may focus on steel counters today. Meanwhile, the recent spike in Covid-19 cases and double face mask recommendations may allow some of the healthcare counters to trade actively. On the stay at home trend, we believe demand for online shopping might be on the rise, that may boost demand for payment gateway, courier service, plastic packaging as well as home entertainment segments.

The FBM KLCI ended in the negative territory, crossing below the 1,565 support level. Technical indicators remained negative as the MACD Histogram has turned red, while the RSI was hovering below the 30 level. Volatility trading is expected with the next support level located at 1,545, while the resistance is pegged at 1,590-1,600.

Company Brief

Inari Amertron Bhd’s 3QFY21 net profit grew 33.7% YoY to RM81.9m, amid strong demand for 5G devices. Revenue for the quarter added 41.3% YoY to RM342.9m. An interim dividend of 4 sen a share, payable 8th July 2021 was declared. (The Star)

Choo Bee Metal Industries Bhd’s 1QFY21 net profit swelled 7.6x YoY to RM27.3m as the shortage of raw materials pushed up steel prices higher. Revenue for the quarter climbed 80.3% YoY to RM135.9m. (The Star)

Pharmaniaga Bhd has reported that revenue from its Sinovac Covid-19 concession business to recognise from the June 2021 quarter onwards. The distribution of the first batch of 290,480 doses of the vaccine to the market has commenced on 11th May 2021. (The Star)

Widad Group Bhd has secured a RM129.4m contract from the Kedah Government to upgrade the Bukit Selambau water treatment plant in Kuala Muda. The contract period shall be 130 weeks commencing from 6th June 2021 to 2nd December 2023. (The Star)

IOI Corp Bhd's 3QFY21 net profit skyrocketed to RM401.3m, from RM100,000 reported in the previous corresponding quarter, mainly due to higher crude palm oil (CPO) and palm kernel prices. Revenue for the quarter grew 40.6% YoY to RM2.86bn. (The Edge)

Pecca Group Bhd's 3QFY21 net profit leapt 23.6x YoY to RM8.1m, on stronger contributions from automotive leather car seat cover sales and a growing healthcare segment. Revenue for the quarter jumped 83.2% YoY to RM42.5m. (The Edge)

Alam Maritim Resources Bhd and its wholly-owned subsidiary Alam Maritim (M) Sdn Bhd has secured the required court orders to facilitate the group's restructuring plan by way of a scheme of arrangement with its creditors. The orders were granted pursuant to Section 366 of the Companies Act 2016, which is a statutory mechanism that provides relief for companies to propose a compromise with its creditors instead of being wound up. (The Edge)

JAKS Resources Bhd’s 1QFY21 net profit stood at RM19.8m vs. a net loss of RM6.2m recorded in the corresponding quarter on the back of the recognition from the Vietnam power plant project. Revenue for the quarter, however, plunged 76.8% YoY to RM17.5m. (The Edge)

ATA IMS Bhd has reiterated its claim that it does not practise any form of forced labour in its operations, after a prominent migrant worker rights specialist said the US authorities would investigate the company regarding the matter. As of today, it has not received any communication from the US Customs and Border Protection, or any other similar government authority, on the forced labour allegation. (The Edge)

PIE Industrial Bhd’s 1QFY21 net profit stood at RM11.7m vs. a net loss of RM3.6m recorded in the previous corresponding quarter, mainly attributable to higher revenue and income from scrap sales. Revenue for the quarter jumped 161.3% YoY to RM263.2m. (The Edge)

Source: Mplus Research - 24 May 2021