Market Review

Malaysia: The FBM KLCI (+0.03%) recovered all its intraday losses to record its fourth day winning streak on the back of sustained buying momentum in selected banking heavyweights. The lower liners, however, retreated, while the broader market finished mostly lower with the technology sector (-2.3%) underperformed.

Global markets: The US stockmarkets marched higher as the Dow (+0.2%) registered small gains, boosted by optimism over the massive budget proposal from US President Joe Biden. European stockmarkets were upbeat, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI closed marginally higher after erasing all its intraday losses last Friday despite the gains in TM and selected index-linked banking stocks, marking its fourth straight session of gains. However, the local stocks may face selling pressure today following the National Security Council’s (MKN) decision to implement a total lockdown nationwide from 1st June 2021 on the back of spiking Covid-19 cases. Meanwhile, the CPO price climbed above RM4,000 while the oil price is hovering around USD68-69 level.

Sector focus: We expect a negative bias tone on the broader market over the total lockdown. However, investors may focus on vaccine or pharmaceutical related stocks amid the ongoing vaccination programme. Besides, sectors such as technology and shipping that are linked globally as well as PPE-related should continue to be operational under the FMCO and should get traders attention

FBMKLCI Technical Outlook

The FBM KLCI climbed for the fourth straight session and closed above the 1,590 resistance level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI was hovering above the 50 level. Resistance is set around 1,600-1,610, while support is pegged along 1,550-1,555.

Company Brief

PPB Group Bhd’s 1QFY21 net profit jumped 114.8% YoY to RM402.2m, mainly due to higher contribution from Wilmar International Limited and higher profit from the grains and agribusiness segment. Revenue for the quarter increased 5.0% YoY to RM1.12bn. (The Star)

Malaysian Pacific Industries Bhd’s (MPI) 3QFY21 net profit surged 238.2% YoY to RM74.4m, as the global chip shortage pushed prices higher. Revenue for the quarter gained 40.0% YoY to RM526.6m. (The Star)

Leon Fuat Bhd’s 1QFY21 net profit soared 36.1x YoY to RM36.1m, following recent surge of steel prices to multi-year highs. Revenue for the quarter added 75.8% YoY to RM211.0m. (The Star)

Ann Joo Resources Bhd’s 1QFy21 net profit stood at RM73.6m vs. a net loss of RM30.6m recorded in the previous corresponding quarter, thanks to rising steel prices and stronger export demand. Revenue for the quarter increased 29.5% YoY to RM577.0m. (The Star)

Serba Dinamik Holdings Bhd has announced that major shareholder and director is calling for an EGM to replace KPMG PLT, two days after the company's external auditors raised concerns related to statutory audit. Non-independent and non executive Datuk Abdul Kadier Sahib, who owns a 16.0% stake in the company, has proposed the company to appoint BDO PLT as new auditors for the financial year ending 30th June 2021. A Circular to Shareholders containing details of the Proposals together with the Notice of EGM will be despatched to the shareholders of the Company in due course. (The Star)

AirAsia Group Bhd has provided financial assistance to some subsidiaries and associates amounting to around RM48.3m. It had provided US$400,000, or the equivalent of RM1.7m, in advances to its online financial services subsidiary Big Pay Pte Ltd through its unit AirAsia Digital Sdn Bhd on 31st March 2021. (The Edge)

Malaysia Airports Holdings Bhd’s (MAHB) 1QFY21 net loss widened to RM221.3m vs. a net loss of RM20.4m recorded in the previous corresponding quarter, attributed to the significant contraction in passenger movements due to the prolonged Movement Control Order (MCO) and interstate travel ban. Revenue for the quarter sank 63.9% YoY to RM336.9m. (The Edge)

Rubberex Corp (M) Bhd's 1QFY21 net profit soared 834.9% YoY to RM86.6m, on higher demand for glove products and higher average glove selling prices. Revenue for the quarter jumped 163.8% YoY to RM175.2m. (The Edge)

Malayan Flour Mills Bhd's (MFM) 1QFY21 net profit stood at RM17.7m vs. a net loss of RM16.8m recorded in the previous corresponding quarter, amid improvements in both its flour and grains trading, and poultry integration segments. Revenue for the quarter rose 8.3% YoY to RM708.8m. (The Edge)

Jakel Group managing director Datuk Mohamed Faroz Mohamed Jakel has emerged as a substantial shareholder in Sedania Innovator Bhd, after acquiring 43.5m shares or a 12.6% YoY stake in the group. Mohamed Faroz had acquired the shares via a private placement. (The Edge)

Source: Mplus Research - 31 May 2021