Market Review

Malaysia:. The FBM KLCI (-0.6%) finished at its lowest level since 9th November 2020 as market sentiment was dampened by softer Malaysia economic growth projection from World Bank to 4.5% (earlier projected 6.0%) for 2021. The lower liners extended their losses, while the financial services sector (+0.2%) was the only bright spot on the broader market.

Global markets:. The US stockmarkets rebounded as the Dow gained 1.0% after US President Joe Biden’s struck a USD579.0bn infrastructure plan with a bipartisan group of senators, whilst the final reading of 1Q21 GDP was unchanged at +6.4% YoY. European stockmarkets rebounded, while Asia stockmarkets closed mixed.

The Day Ahead

The unabated Covid-19 spread in the country which may lead to further pressure on the economy, coupled with the concerns over the revised nation’s growth projection by World Bank have sent the FBM KLCI lower. Following a heavy selldown, we might anticipate bargain hunting activities to emerge on the local bourse. On a side note, the government has approved the licence and incentives for Risen Energy Co Ltd to manufacture solar cells and solar modules in Malaysia amounting to RM42.2bn, which would make Malaysia an integrated production hub for solar products.

Sector focus:. We expect the development of the solar modules in Malaysia and the increasing demand for green energy would shine a light on the solar-related counters. Besides, investors may put the oil & gas stocks on radar as the oil price stood firmly above USD75.

The FBM KLCI has broken the immediate support level at 1,565. Technical indicators remained negative as the MACD Histogram extended another red bar, while the RSI hovered below the 50 level. With the support level broken, investors might see bargain hunting activities emerging. The resistance is set at 1,580, while the next support level is set around 1,550.

Company Brief

Astro Holdings Bhd and Netflix have entered into a partnership that will see the streaming service brought on to Astro's platform. The content providers announced in a joint statement that Astro customers will soon be able to access Netflix on their connected Ultra Boxes, first at launch, and subsequently on Ulti Boxes. (The Star)

Messrs KPMG PLT has resigned as external auditors for Serba Dinamik Holdings Bhd with immediate effect yesterday in the latest development after KPMG had late last month raised concerns on some of the company’s past sales transactions and trade receivables. Serba Dinamik said it was currently identifying the new auditors under the Companies Act 2016 and will make an immediate announcement to this effect immediately upon the finalisation of appointment of the new auditors. (The Star)

Dagang Nexchange Bhd (DNeX) has signed a memorandum of understanding with Universiti Teknologi MARA (UiTM) to collaborate on the development of digital solutions in data analytics, artificial intelligence (AI) and cybersecurity. Both parties will also explore the application of these technologies in key industries in Malaysia and create opportunities for further collaboration in such commercialisation efforts. (The Star)

Gamuda Bhd's 3QFY21 net profit shot up 252.5% YoY to RM141.8m, as the pace of construction and property projects and traffic on the expressways returned to preMovement Control Order levels. Revenue for the quarter added 76.6% YoY to RM971.2m. (The Edge)

Eco World Development Group Bhd’s 2QFY21 net profit surged 172.2% YoY to RM42.3m, on higher sales. Revenue for the quarter increased 21.7% YoY to RM420.5m. An interim single-tier dividend of 2.0 sen per share, payable on 23rd July 2021 was declared. (The Edge)

Eco World International Bhd’s (EWI) 2QFY21 net profit fell 43.7% YoY to RM11.3m, due to higher finance cost, administrative and general expenses and marketing expenses. Revenue for the quarter, however, leapt 951.9x YoY to RM107.6m. A special dividend of 5.0 sen per share, payable on 23rd July 2021 was declared. (The Edge)

United Malacca Bhd’s 4QFY21 net loss stood at RM11.5m vs. a net profit of RM13.7m recorded in the previous corresponding quarter, mainly due to its Indonesian operations in Kalimantan, which recorded a plantation loss of RM0.8m. Revenue for the quarter fell marginally by 0.6% YoY to RM106.4m. A second interim dividend of 7.0 sen per share, payable on 16th August 2021 was declared. (The Edge)

Malakoff Corp Bhd has appointed Solarvest Holdings Bhd as its solar photovoltaic (PV) systems contractor to accelerate its solar power purchase deals with several logistic players in the country. The partnership aims to assist businesses in Malaysia achieve its environmental goals through solar PV solutions. (The Edge)

Handal Energy Bhd has won a five-year contract from ExxonMobil Exploration and Production Malaysia Inc to provide crane operation and maintenance services. The contract, to run from 15th June 2021 till 14th June 2026, does not carry a specified value as it is on a call-out basis. (The Edge)

Bursa Malaysia Securities Bhd has publicly reprimanded Xin Hwa Holdings Bhd and two of its former directors for breaching Main Market listing requirements and imposed fines totalling RM150,000. This is in regard to advances and payments made on behalf of its wholly-owned subsidiary Xin Hwa Trading & Transport Sdn Bhd between 1st January 2017 and 31st December 2018. (The Edge)

Source: Mplus Research - 25 Jun 2021