Market Review

Malaysia:. The FBM KLCI (-0.1%) was traded in a lacklustre manner before succumbing to profit taking in the eleventh trading hour as the key index closed mildly lower yesterday. The lower liners ended mixed, while the broader market ended mostly higher, with the transportation & logistics sector (+1.2%) taking lead.

Global markets:. The US stockmarkets rebounded as the Dow added 0.1% after the US inflation data for May 2021 rose 5.0% YoY; the steepest increase since August 2008, as the Federal Reserve view that the rise is transitory and does not warrant tapering of monetary stimulus any time soon. European stockmarkets ended flat, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI closed marginally lower on the back of weaker sentiment amid some developments in the political scene. Despite a leap in the US inflation, Wall Street ended slightly higher as investors viewed the spike in consumer prices as a temporary effect of industries reopening following the lockdown. We reckon the positive sentiment on Wall Street, coupled with the climbing vaccination rate in the country should move the local stocks higher. Meanwhile, the oil price continued to stay above USD72.

Sector focus:. The technology sector may trend higher following the overnight gains on the Nasdaq Composite index. Besides, investors may shift their focus to recovery theme stocks amid improving vaccination rate. Also, the oil & gas sector may also see an upward move on the back of firmer oil price.

The FBM KLCI extended its losses for the second session, closing below the EMA20 level. Technical indicators remained negative as the MACD Histogram turned red, while the RSI hovered marginally below the 50 level. The key index may continue to stay in consolidation mode, with resistance envisaged around 1,600- 1,620, while the support is located at 1,555-1,565.

Company Brief

Kossan Rubber Industries Bhd will make the full payment of RM25.0m in remediation fees to its migrant workers by the end of this month. The payment was originally targeted to be completed in March 2022. Kossan has already paid RM29.0m under the programme, which was originally scheduled to be completed in 18 months. (The Star)

CB Industrial Product Holding Bhd’s (CBIP) 1QFY21 net profit grew 51.2% YoY to RM18.6m, boosted by increased revenue from its palm oil plantations and improved margin at its equipment and engineering business. Revenue for the quarter increased 45.6% YoY to RM157.3m. (The Star)

Serba Dinamik Holdings Bhd's co-founder Datuk Awang Daud Awang Putera has disposed of 8.5m shares in the group, which has been in the limelight since 25th May 2021 over some audit issues. Besides Awang Daud, the Employees Provident Fund (EPF) also disposed 1.4m of the group’s shares in the open market last week. Following these disposals, the provident fund's shareholding in Serba Dinamik shrank to 367.4m shares or a 9.9% stake. (The Edge)

IGB Commercial Real Estate Investment Trust (IGB Commercial REIT) has reported that its initial public offering (IPO) will involve the listing of 2.31bn units on Bursa Malaysia’s Main Market under a corporate exercise, which comprises a restricted offering of up to 945.0m units and an institutional offering of at least 282.0m units in the property trust. The property trust’s tentative listing date is on 30th July 2021. (The Edge)

Southern Cable Group Bhd has secured shareholders' approval for proposed amendments to the company's constitution, paving the way for its transfer from the ACE Market to the Main Market of Bursa Malaysia. It is aiming for the transfer listing to take place in 4Q21, pending approvals from the Securities Commission Malaysia and Bursa Malaysia Securities Bhd. (The Edge)

Prestar Resources Bhd has proposed to undertake a bonus issue of up to 135.5m shares on the basis of three bonus shares for five existing shares on an entitlement date to be determined later. (The Edge)

Microlink Solutions Bhd plans to undertake a bonus issue on the basis of three bonus shares for every one existing ordinary share on an entitlement date to be determined later. The proposed bonus issue will involve the issuance of up to 864.0m bonus shares. (The Edge)

Source: Mplus Research - 11 Jun 2021