Market Review

Malaysia:. The FBM KLCI (+0.2%) staged a mild rebound, lifted by gains in gloves heavyweights amid rising concern over the Delta variant of Covid-19. The lower liners edged mildly higher, while the broader market was mostly upbeat, led by the healthcare sector (+1.9%).

Global markets:. The US stockmarkets finished marginally higher as the Dow added 0.03%, boosted by the stronger-than-expected consumer confidence data in April 2021 at 127.3 vs. consensus estimates at 119.0. European stockmarkets rebounded, but Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI rebounded from on the back of bargain hunting activities, but gains were capped as investors took cue from the weak sentiment in the regional markets. The bullish momentum, however, might not sustain on the back of the recent political developments as well as ongoing combat of Covid-19 pandemic; daily confirmed cases are still ranging between 5000-7000 levels. Meanwhile, technology stocks remain attractive with the ongoing developments on IoT,5G and electric vehicle. Commodities wise, both the CPO and oil prices moved a tad high.

Sector focus:. We believe the uptrend in the technology counters on the local front is still intact following the overnight gains in Nasdaq. Besides, the transportation & logistics sector should continue to bode well following recent selldown. With the Delta variant being a concern, trading interest might build up on glove stocks.

The FBM KLCI bounced from a year-to-date low level in the previous session but the key index was still traded below the SMA200 level. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered below the 50 level. The key index may trade within the resistance level set at 1,570-1,590, and the support level located around 1,540 given the pervasive cautious sentiment.

Company Brief

Sapura Energy Bhd’s 1QFY22 net loss stood at RM97.1m vs. a net profit of RM14.2m recorded in the previous corresponding quarter as the unfavourable USD exchange rate and one-time financial impact arising from its refinancing exercise offset the higher prices of crude oil which boosted its production and drilling businesses. Revenue for the quarter, however, gained 8.4% YoY to RM1.47bn. (The Star)

Green Packet Bhd has entered into a consortium with Zico Holdings Inc and M24 Tawreeq Sdn Bhd to jointly submit an application for one of the five digital banking licences to be issued by Bank Negara Malaysia. The application aimed at establishing an Islamic digital bank, which will include several other strategic partners that will further complement the products and value-added services to be offered by the consortium. (The Edge)

Sunway Bhd has teamed up with Tencent-backed Chinese fintech firm Linklogis Inc and Bangkok Bank PCL to also apply for a digital bank licence from BNM. Sunway will hold a majority stake in the venture. (The Edge)

KNM Group Bhd shareholders have rejected its proposed private placement of up to 987.5m new shares or 30.0% of its issued share capital to raise RM167.9m. This means that KNM will have to find other avenues to pare its debts, as well as to raise its working capital as underlined in the proposal. (The Edge)

Workers at palm oil company IOI Corp Bhd are mistreated by managers, face poor living conditions, and pay high recruitment fees, according to an upcoming report by human rights group Finnwatch. IOI Corp would comment on the report after its public release. (The Edge)

Hiap Teck Venture Bhd’s 3QFY21 net profit surged 119.4% YoY to RM65.9m, on higher steel prices, cost optimization efforts, and contribution from its joint venture entity. Revenue for the quarter, however, fell 7.4% YoY to RM329.6m. (The Edge)

Poh Huat Resources Holdings Bhd’s 2QFY21 net profit climbed 82.6% YoY to RM12.7m for the second quarter ended April 30, 2021, from RM6.95 m a year earlier, on higher revenue from furniture shipments in Malaysia and Vietnam. Quarterly revenue grew 36.6% to RM165.54 m, from RM121.18 m. (The Edge)

Source: Mplus Research - 30 Jun 2021