Market Review

Malaysia:. The FBM KLCI (-0.8%) extended its losses, with more than two-third of the key index components finished lower ahead of the extended weekend break. The lower liners ended mixed, while the transportation & logistics sector (+3.9%) outperformed the mostly negative broader market.

Global markets:. The US stockmarkets closed mostly lower as the Dow fell 0.4% as the strong jobs data may curtail the Federal Reserve dovish stance on interest rate policy. Both the European and Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI finished lower, dragged by pervasive selldown in glove stocks as healthcare weightage in the FBM KLCI declined after SUPERMAX was deleted from the key index, coupled with the ongoing vaccination programme. Tracking the sideways tone on Wall Street, investors may stay sidelines while monitoring Malaysia’s industrial production index to be released on Friday, and European Central Bank’s interest rate decision on Thursday. Also, we might expect the sentiment to stay weak on technology stocks as Joe Biden expands the list of Chinese companies banned from US investment. Commodities wise, both CPO and Brent oil prices are seeing mild pullback.

Sector focus:. The transportation & logistics counters may continue to stay focus following a strong surge last Thursday and they should do well under the Covid-19 environment. Besides, we expect chemical related sector to remain attractive as their results have been on a growing trend. Also, with the subsiding Covid-19 cases, recovery theme stocks should be focused.

The FBM KLCI extended its losses for the second session as the key index closed below the EMA120 level. Technical indicators turned negative as the MACD Histogram turned into a red bar, while the RSI was hovering below the 50 level. We expect the key index to consolidate over the near term, with resistance located around 1,600-1,620, while the support is set at 1,555-1,565.

Company Brief

Iris Corp Bhd has announced a contract extension with Senegal’s Interior Ministry for the supply and production of 3.0m new biometric smart national identity and voter cards. The contract is valued at FCFA10.50bn (about RM80.4m) and set for a duration of two years commencing 3rd May 2021. (The Star)

Heineken Malaysia Bhd has suspended operations at its brewery in Sungai Way, Selangor after the government imposed mandatory halt on most businesses to curb the sharp rise in Covid-19 infection in the country. The company would make the necessary announcement on any material developments relating to the above matter, as and when appropriate. (The Star)

Jardine Cycle & Carriage Ltd’s (Jardine CCL) takeover offer for Cycle & Carriage Bintang Bhd has fallen through for the second time in two years. Jardine CCL only managed to raise its shareholding by 21.6% to 88.0% or 88.7m shares, from 66.5% on 7th April 2021. (The Edge)

Serba Dinamik Holdings Bhd’s second-largest shareholder, Datuk Abdul Kadier Sahib has continued to accumulate shares in the company. Abdul Kadier, who is also the non-independent non-executive director has bought an additional 3.0m shares in the open market. This raised his stake to 16.3% or 602.9m shares. (The Edge)

Top Glove Corp Bhd has reported that its annual glove production capacity had increased to about 100.00bn pieces as at June 2021 to meet strong demand for the product due to the Covid-19 pandemic. (The Edge)

Ekovest Bhd has aborted plans to purchase the 96.3-ac of freehold land in Pulai, Johor for RM944.6m from Iskandar Waterfront Holdings Sdn Bhd (IWH) for the second time. The rising Covid-19 cases and nationwide lockdown was cited as justification for the decision. (The Edge)

UEM Sunrise Bhd has announced that it had acquired 6.9-ac of prime freehold land in Cheras, Kuala Lumpur for RM197.0m. Its wholly-owned subsidiary UEM Land Bhd had signed a sale and purchase agreement (SPA) with Accolade Land Sdn Bhd. (The Edge)

Sarawak Oil Palms Bhd (SOP) is acquiring four parcels of land from Shin Yang Construction Sdn Bhd for RM14.0m to expand its landbank. SOP’s subsidiary Wawasan Asiamaju Sdn Bhd had entered into a sale and purchase agreement with Shin Yang to acquire the land in Kuching North Land District, measuring approximately 9.6-ha. (The Edge)

Ministry of Health (MoH)-backed ProtectHealth Corp Sdn Bhd has appointed IHH Healthcare Bhd to provide Covid-19 vaccination to the public at the Setia City Convention Centre in Shah Alam, Selangor, starting from 7th June 2021. The mega vaccination centre, set up by Malaysia's Covid-19 Immunisation Task Force, aims to vaccinate more people per day without the risk of overcrowding. (The Edge)

DPI Holdings Bhd has proposed to undertake a bonus issue of new shares on the basis of one bonus share for every two existing DPI shares. The entitlement date will be determined later. (The Edge)

Source: Mplus Research - 8 Jun 2021