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Mplus Market Pulse - 1 Jul 2021

Publish date: Thu, 01 Jul 2021, 08:44 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 (-1.1%) turned lower as the key index (-5.8% YTD) came in as the worst regional performer amid the rising Covid-19 cases that may prolonged the transition into Phase 2 of National Recovery Plan. The lower liners were downbeat, while the REIT sector (+0.03%) outperformed the broader market.

Global markets:. The US stockmarkets closed mostly higher as the Dow and S&P 500 added 0.6% and 0.2% each on expectations over economic improvements may transpire to stronger corporate earnings. European stockmarkets retreated, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI wrapped up the first half of 2021 with a new year-to-date low as the high number of Covid-19 daily confirmed cases which stayed above the 6,000 mark, coupled with uncertainties in the recent political developments. However, we expect bargain hunting activities on the local bourse to emerge as Parliament may reconvened by August 2021, where MPs will be able to discuss and resolve issues revolving the nation going forward. Commodities wise, the oil prices rose on the report of lower US inventories. Market may monitor the decision on the next phase of production policy in the upcoming OPEC+ meeting amid demand recovery.

Sector focus:. Market might see mild bargain hunting activities within the healthcare sector amid unabated Covid-19 infections after a heavy selldown yesterday. Besides, trading interest might be noticed in the oil & gas counters ahead of the OPEC+ meeting.

The FBM KLCI has broken its immediate support level at 1,540, forming a new yearto-date low. Technical indicators remained mixed as the MACD Histogram has extended a red bar, but the RSI hovered slightly above the 30 level. With that, downward momentum may persist over the near term with resistance set at 1,560- 1,580, while the next support level is located at 1,520.

Company Brief

Mah Sing Group Bhd’s healthcare business has got off to a strong start after it secured long-term glove orders which takes up to four glove dipping lines’ production capacity. Meanwhile, Mah Sing is on track to meet the RM1.60bn sales target for 2021, with the group recording property sales of RM650.5m in January to May 2021, which was 40.7% of its sales target. (The Star)

AEON Credit Service (M) Bhd and its parent company AEON Financial Service Co Ltd (AFS) have submitted a joint application to Bank Negara Malaysia for a digital bank licence. AEON Credit and AFS will cooperate with each other by combining their expertise and resources to establish in Malaysia, a joint venture company to engage in the business of a digital bank upon obtaining a licence. (The Edge)

A consortium comprising Paramount Corp Bhd, Star Media Group Bhd, RCE Capital Bhd, Prosper Palm Oil Mill Sdn Bhd and a technology partner, has also submitted an application to Bank Negara Malaysia for a digital banking licence. (The Edge)

Ahmad Zaki Resources Bhd (AZRB) founder Tan Sri Wan Zaki Wan Muda will retire as the group’s executive vice chairman effective 1st July 2021. However, the 72- year-old major shareholder of the group will stay on as a board member of AZRB. (The Edge)

Chia Kee Foo has resigned as Cheetah Holdings Bhd’s chairman and managing director effective yesterday, to pursue his private interests. (The Edge)

Nestcon Bhd has bagged a RM230.0m contract to build serviced apartments in Sungai Buloh, Selangor. The project will start on 1st July 2021 and construction is expected to be completed within 40 months. (The Edge)

Boustead Heavy Industries Corp Bhd (BHIC) has received a one-year contract extension from the Ministry of Home Affairs effective 1st July 2021, with the revised value of RM96.0m. The contract, originally secured in October 2016, is for the provision of integrated maintenance and logistic support services for three units of the Malaysian Maritime Enforcement Agency’s Dauphin helicopters. (The Edge)

Sarawak Consolidated Industries Bhd’s (SCIB) shareholders have approved the group’s proposal to cancel RM40.0m worth of its issued share capital. The credit arising from the share capital reduction would be used to eliminate accumulated losses. (The Edge)

MAG Holdings Bhd has disposed of 20.9% of its 40.8% shareholding in associate Henan XingHe Oil and Fat Company Ltd (HXOF) for RM37.8m, to reduce its losses from the investment. Anyang Herun Oil Technical Service Company Ltd has entered into a share sale agreement with HXOF shareholder Huang YunLin to dispose of the stake. (The Edge)

Kronologi Asia Bhd is still looking for merger and acquisition plans to bring it up to the next level of growth. In line with its strategic growth plans for geographical expansion, the group has recently closed the deal to acquire the remaining 83.3% equity interest in Quantum China Ltd, to further expand its sales, marketing and customer coverage footprint to an enterprise data management (EDM) and cloud computing market. (The Edge)

Cypark Resources Bhd's 2QFY21 net profit slid 2.6% YoY to RM18.0m, as a slowdown in the consecution and engineering division offset the additional work progress recognised from its waste-to-energy projects. Revenue for the quarter, however, gained 13.5% YoY to RM86.0m. (The Edge)

AE Multi Holdings Bhd has secured a RM65.2m contract from Green Ocean Corp Bhd to design, install and commission eight double former dipping lines for rubber glove production. (The Edge)

Source: Mplus Research - 1 Jul 2021

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