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Mplus Market Pulse - 15 Jun 2021

Publish date: Tue, 15 Jun 2021, 10:27 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Market Review

Malaysia:. The FBM KLCI (+0.5%) started off the week on a firmer footing as the key index snapped a three-day losing streak, boosted by gains in gloves and banking heavyweights. The lower liners also advanced, while the energy sector (+4.2%) rallied on the broader market, supported by the higher crude oil prices.

Global markets:. The US stockmarkets closed mixed as the Dow fell 0.3%, but the S&P 500 and Nasdaq added 0.2% and 0.7% respectively ahead of the US-Europe summit meeting at Brussels today. Both the European and Asia stockmarkets closed mostly upbeat.

The Day Ahead

Mirroring the overnight gains at Wall Street and advances in regional markets, the FBM KLCI recouped losses from previous sessions as the key index witnessed signs of bargain hunting after recent selldown. There might be some portfolio rebalancing activities by index-linked funds towards the end of the week before the June semi-annual review of the FBM Index Series taking effect after coming Friday. Commodities wise, the CPO price has seen a pullback in line with the weakness in soybean oil as well as concerns over higher production and stock level, while Brent oil steadied above USD70 at this juncture.

Sector focus:. Investors may focus on technology stocks following the overnight gains on Nasdaq (which is nearing all-time-high zone). Besides, the current MCO situation may continue to bode well for sectors such as transportations & logistics, as well as packaging and selected consumer stocks. Also, the building material segment may continue to shine amid firm commodity prices.

The FBM KLCI started the week on a positive tone as the key index managed to hold above its immediate resistance level at 1,565. Technical indicators turned positive as the MACD Histogram has turned into a green bar, while the RSI hovered above the 50 level. Mild bargain hunting activities may lift the key index higher, with resistance set at 1,600, while the support level is envisaged around 1,555-1,565.

Company Brief

Kawan Food Bhd has been instructed by the Ministry of Health to suspend its operations for a week from 14th June 2021 to 21st June 2021, after 78 of its workers were tested positive for Covid-19 infection. The workers at wholly owned Kawan Food Manufacturing Sdn Bhd were tested positive on 11th June 2021. (The Star)

Powerwell Holdings Bhd has secured a US$2.1m (RM8.8m) supply contract from a solar power company in Bangladesh. The purchase order by Intraco Solar Power Ltd was for the supply of low voltage switchboards and medium voltage switchgear panels using 33 kilovolt (KV) gas insulated switchgear. The delivery of the Supply Contract is expected to be completed by end of December 2021. (The Star)

Serba Dinamik Holdings Bhd’s board had agreed in principle to appoint Ernst & Young Advisory Services Sdn Bhd as its independent reviewer to assess veracity and accuracy of the matters highlighted by external auditors KPMG PLT. An updated announcement will be made upon the finalisation of terms and conditions of the said appointment. Separately, the group also announced that it was appointing Datuk Mohamed Ilyas Pakeer Mohamed, Masleena Zaid and Johan Mohamed Ishak to its board as independent and non-executive directors. (The Edge)

KPower Bhd's chairman and largest shareholder Datuk Dr Mohd Abdul Karim Abdullah has disposed of 2.9m company warrants. The warrants were sold at 28.91 sen apiece or a total of RM843,401 on 11th June 2021, leaving Mohd Karim with 3.3m warrants or 2.2%. (The Edge)

Privasia Technology Bhd has appointed the former CEO of Malaysian Investment Development Authority (MIDA), Datuk Azman Mahmud, as its new chairman. This comes after Azman was roped in as Privasia's independent and non-executive director on 10th May 2021. (The Edge)

Hextar Global Bhd has executed an RM89.0m Islamic financing facility from OCBC Al-Amin Bank Bhd to finance its purchase of Alpha Aim (M) Sdn Bhd and Chempro Technology (M) Sdn Bhd (Chempro business), which provides specialty chemical products for the cleaning, hygiene and food industry, as well as the rubber glove industry in Southeast Asia. The facility will be secured by way of corporate guarantee by its wholly-owned subsidiary Hextar Chemicals Sdn Bhd. (The Edge)

Green Ocean Corp Bhd, which jumped on the rubber glove bandwagon in October 2020, has proposed to raise an additional RM13.0m from a private placement to fund the capital expenditure for its new glove business. This follows two recent two fundraising exercises comprising a private placement of 30.0% of the then existing total issued shares and a rights issue involving the issuance of 828.6m new shares, which had raised a combined RM94.6m, but short of the expected total proceeds of RM122.4m. (The Edge)

Permaju Industries Bhd has emerged as a substantial shareholder of MTouche Technology Bhd (MTB) after acquiring 185.1m rights shares, together with 92.5m free warrants in the mobile telecommunications group. The shares, representing 20.0% of the existing total number of issued shares in MTB, were acquired via its wholly-owned subsidiary IconWorld Resources Sdn Bhd for RM18.5m. (The Edge)

Unitholders of CapitaLand Malaysia Mall Trust (CMMT) has voted in favour for the real estate investment trust's (REIT) proposal to expand its asset classes to include business parks, logistics facilities, warehouses, distribution centres, data centres and integrated developments. Upon obtaining the necessary regulatory approvals, the investment mandate expansion is expected to be completed by the 3Q21. (The Edge)

Malayan Cement Bhd's private placement of 85.0m new shares was oversubscribed by more than 1.1x. The issue price of the private placement shares was fixed at RM2.79 per share, reflecting a discount of 9.9% on the five-day volume weighted average price of RM3.10 per share, raising RM237.2m. (The Edge)

Pekat Group Bhd, a solar photovoltaic, earthing and lightning protection specialist, saw 32.2m of its shares under the public portion of its initial public offering oversubscribed by 76.0x ahead of its listing on the ACE Market of Bursa Malaysia. Pekat has received 34,964 applications for 2.50bn shares during the public subscription period from 2nd June 2021 to 10th June 2021. (The Edge)

Sedania Innovator Bhd subsidiary has received RM1.5m as settlement of a long overdue debt. Sedania Technologies Sdn Bhd sued Professional Science Technologies Sdn Bhd and its director Muzir Md Zanib over the debt in November 2019, and won the case in August 2020. (The Edge)

Source: Mplus Research - 15 Jun 2021

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