Market Review

Malaysia:. The FBM KLCI (-0.5%) was under pressured for the third straight session after languishing in the negative territory for the entire trading session, mirroring the weakness on Wall Street overnight. The lower liners extended their losses, while the broader market ended mostly lower.

Global markets:. The US stockmarkets closed mostly lower as the Dow and S&P 500 shed 0.8% and 0.04% respectively, but the Nasdaq added 0.9% after investors shifted their focus away from cyclical stocks. European stockmarkets closed mixed, while Asia stockmarkets finished mostly lower.

The Day Ahead

Taking cues from most of the regional markets, the FBM KLCI was firmly lower in the negative territory after the US Federal Reserve brought forward its outlook for the interest rate hike. The market may continue to trade sideways to negative bias tone with mild bargain hunting activities as investors mulled on the four-phase National Recovery plan. However, we believe the positive performance on Nasdaq may spillover to tech stocks on the local front. Commodities wise, oil price slipped as the USD strengthened, while the CPO price extended its losses.

Sector focus:. Investors may see trading interest in some recovery theme stocks such as consumer, property and construction as well as shipping companies. Meanwhile, traders may put green energy related stocks on radar as the market may expect more foreign investment on the sector moving forward. Also, tech stocks could be focused, taking cues from Nasdaq overnight performance.

The FBM KLCI logged a third session decline as the key index once again closed below the SMA200 level. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level. We believe the key index may trade just sideways or in a negative tone without fresh catalysts. The resistance is set at 1,600-1,615, while the next support level is located around 1,555 if the key index closed below the 1,565 level.

Company Brief

Euro Holdings Bhd has terminated a bonus issue plan following recent sell-off. In March 2021, the furniture maker has proposed to issue four new free shares for every one share held by shareholders. Earlier this week, the stock hit limit for two consecutive days, on Tuesday and Wednesday. (The Star)

Advancecon Holdings Bhd has announced a deal to a acquire majority stake in a loss making quarry operator for RM30.4m. Under the deal, Advancecon will pay RM15.2m cash and issue 33.0m new shares to Fook Hua Holdings Sdn Bhd for a 51.0% stake in Spring Energy Resources Bhd (SERB). The new shares will be issued at 46 sen each. In the long run, the proposed acquisition is expected to improve the earnings of the enlarged Advancecon Group given that the Board and management of SERB have outlined a turnaround plan. (The Star)

Malaysia Building Society Bhd (MBSB) expects to increase its revenue by 3-4% this year, driven by selective bright spots in the consumer retail and trade financing segment. There was also a steady outlook in personal financing to civil servants amid the continued uncertainties due to the Covid-19 pandemic. (The Star)

MSM Malaysia Holdings Bhd will remain as a listed entity even if the Federal Land Development Authority (FELDA) takes over its 51.0% parent FGV Holdings Bhd as reported at the virtual press conference of the sugar refiner’s annual general meeting (AGM). The group is also upbeat on its profitability path this year, despite expecting to miss its full-year production target of 1.3m tonnes by a small margin. (The Edge)

NPC Resources Bhd will have no suspension of trading of the group’s shares on 23rd June 2021 as the group has submitted its annual report for the financial year ended 31st December 2020 to Bursa Malaysia for public release. Meanwhile, the external auditor of the group has issued a qualified opinion with material uncertainty on NPC's ability to continue as a going concern. (The Edge)

Ipmuda Bhd’s share trade has been suspended since 12:21pm yesterday pending a material announcement. Prior to the suspension, shares in Ipmuda were traded 18 sen or 10.7% higher at RM1.87, which values the company at about RM153.5m. (The Edge)

Genetec Technology Bhd has secured new orders worth approximately RM47.9m from existing customers who are global players in the segments of electric vehicle and battery and hard disk drive, electronics and semiconductor. (The Edge)

MQ Technology Bhd has proposed a private placement of up to 182.8m new shares, representing not more than 20.0% of its share capital. Based on an indicative issue price of 6.0 sen, the placement is expected to raise gross proceeds of up to RM8.9m and RM11.0m under the minimum scenario and maximum scenario, respectively. The proceeds from the placement will be used to renovate its factory, repay unsecured loan, and for working capital. (The Edge)

LKL International Bhd has decided to conduct its private placement of 30.0% of its issued share capital before its one-for-one bonus issue. This means the placement will now entail the issuance of up to 177.5m shares. LKL wanted to raise RM56.8 m from the placement, of which RM54.2m will be used to set up a new business in trading of rubber gloves and personal protective equipment. (The Edge)

Apollo Food Holdings Bhd has announced a temporary manufacturing stoppage for the second time this month to prevent the spread of Covid-19. The affected manufacturing facility this time is run by wholly-owned subsidiary Apollo Food Industries (M) Sdn Bhd, which was ordered by the Ministry of Health (MoH) yesterday to close for seven days until 22nd June 2021 to disinfect its premises. (The Edge)

Source: Mplus Research - 18 Jun 2021