Market Review

Malaysia:. The FBM KLCI (-0.7%) endured a knee jerk sell-off before recovering some of its intraday losses on the back of bargain hunting in selected index heavyweights as the key index slipped 1.3% MoM. The lower liners extended their losses, while only the healthcare (+2.9%), technology (+0.4%) and transportation & logistics (+0.3%) sectors outperformed the negative broader market.

Global markets:. The US stockmarkets were closed in conjunction with the Memorial Day public holiday. European stockmarkets ended mostly lower, while Asia stockmarkets finished mixed after China’s Purchasing Managers’ Index for May 2021 came in at 51.0, below market expectations of 51.1.

The Day Ahead

Bucking the trend in most regional markets, the FBM KLCI kicked off the week on a dour note as market sentiment was dampened by the imposition of full lockdown nationwide amid spiking Covid-19 confirmed cases. However, we believe market sentiment might be lifted by the PEMERKASA+ stimulus package that was unveiled yesterday prior to the full lockdown. Meanwhile, investors may see buying interest in essential sectors that are able to operate during the lockdown. Commodities wise, the CPO price fell below RM4,000 level, while the oil price climbed above USD 69.

Sector focus:. As the nationwide lockdowns start today, traders may focus on sectors such as transportation & logistics, packaging, and essential consumer stocks. Besides, traders may see bargain hunting in the energy sector amid higher oil price following heavy selldown yesterday. Also, vaccine theme could be catching up as the government is looking to expedite the vaccination progress.

The FBM KLCI snapped four consecutive sessions of gains to close below the 1,590 level. The MACD Histogram has turned red, while the RSI is below 50. We reckon the index should trade within 1,580-1,600 over the near term, with support set at 1,555-1,565, while the resistance is envisaged around 1,600.

Company Brief

AMMB Holdings Bhd’s (AmBank Group) 1QFY21 net loss stood at RM4.69bn vs. a net profit of RM247.5m recorded in the previous corresponding quarter, due to the one-off exceptional items of RM4.76bn related to the settlement with the Ministry of Finance of RM2.83bn, goodwill impairment of RM1.79bn and REIT Impairment of RM147.8m. Revenue for the quarter dipped 10.6% YoY to RM1.97bn. (The Star)

Mah Sing Group Bhd’s 1QFY21 net profit rose 40.3% YoY to RM40.3m, underpinned by strong revenue growth due to strong demand for its affordable property units in strategic locations. Revenue for the quarter gained 11.4% YoY to RM413.3m. (The Star)

Sedania Innovator Bhd’s 1QFY21 net profit stood at RM4.2m vs. a net loss of RM1.8m recorded in the previous corresponding quarter, on significant proliferation in the operating verticals essentially through GreenTech and HealthTech segments. Revenue for the quarter surged 515.9% YoY to RM17.1m. (The Star)

Alliance Bank Malaysia Bhd's 4QFY21 net profit fell 48.9% YoY to RM50.1m, mainly due to higher operating expenses and credit costs. Revenue for the quarter, however, grew 2.6% YoY to RM445.8m. A dividend of 5.79 sen per share, payable on 30th June 2021 was declared. (The Edge)

CIMB Group Holdings Bhd’s 1QFY21 net profit surged 384.3% YoY to RM2.46bn, due to a one-off revaluation gain of RM1.16bn from the de-consolidation of TNG Digital. Revenue for the quarter increased 43.8% YoY to RM5.96bn. (The Edge)

IHH Healthcare Bhd’s 1QFY21 net profit stood at RM375.6m, from a net loss of RM319.8m recorded in the previous corresponding quarter, largely due to Covid-19- related services rendered and higher share of profits from joint ventures and associates. Revenue for the quarter rose 11.0% YoY to RM3.95bn. (The Edge)

Boustead Holdings Bhd’s 1QFY21 net profit stood at RM43.1m vs. a net loss of RM73.1m recorded in the previous corresponding quarter, on lower operational costs. Revenue for the quarter, however, fell 7.7% YoY to RM2.09bn. (The Edge)

Boustead Heavy Industries Corp Bhd’s (BHIC) 1QFY21 net loss shrank to RM0.9m, from a net profit of RM20.4m recorded in the previous corresponding quarter, on weaker revenue. Revenue for the quarter contracted 57.0% YoY to RM18.9m. (The Edge)

Velesto Energy Bhd’s 1QFY21 net loss stood at RM60.5m, from a net profit of RM16.3m registered in the corresponding quarter, as its drilling rig utilisation slumped. Revenue for the quarter sank 75.1% YoY to RM43.9m. (The Edge)

DRB-Hicom Bhd’s 1QFY21 net loss narrowed to RM17.0m, compared with a net loss of RM173.3m recorded in the previous corresponding quarter, on the back of a better performance by its automotive and services sectors. Revenue for the quarter rose 28.1% YoY to RM3.51bn. (The Edge)

British American Tobacco (Malaysia) Bhd's (BAT) 1QFY21 net profit grew 24.3% YoY to RM63.1m, supported by growth in the group's domestic volume. Revenue for the quarter increased 17.8% YoY to RM566.6m. A first interim dividend of 21 sen per share, payable on 30th June 2021 was declared. (The Edge)

MY EG Services Bhd's (MYEG) 1QFY21 net profit increased 29.7% YoY to RM76.3m, due to higher contributions from its new concession services, namely the online renewal of motorcycle insurance and road tax, as well as online renewal of Competent Driving License. Revenue for the quarter increased 40.8% YoY to RM171.5m. (The Edge)

Malaysian Resources Corp Bhd's (MRCB) 1QFY21 net profit fell 67.7% YoY to RM5.2m, due to the suspension of work on several projects following the detection of Covid-19 infections at construction sites. Revenue for the quarter decreased 46.8% YoY to RM226.7m. (The Edge)

Supermax Corp Bhd has reported that it adhered to labour laws on treatment of migrant workers, after a report that the United States was investigating a unit over forced labour allegations. Supermax and its subsidiaries are committed to combating forced labour and adhering to labour law regulations, adding that it followed laws on recruitment of migrant workers. (The Edge)

ViTrox Corp Bhd unit is buying land worth RM48.3m in Penang to execute its 10- year expansion master plan, which will be fully completed by 2030. Its whollyowned subsidiary ViTrox Technologies Sdn Bhd entered into a sale and purchase agreement with Penang Development Corp for the plot of land measuring 21.0-ac. (The Edge)

Source: Mplus Research - 1 Jun 2021