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Mplus Market Pulse - 2 Jul 2021

Publish date: Fri, 02 Jul 2021, 08:51 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 (+0.1%) ended marginally higher, fuelled by improved Covid-19 vaccination efforts but was hampered by the rising Covid-19 cases. The lower liners delivered stronger performance, while the broader market ended mostly positive with the energy sector (+2.4%) taking the lead.

Global markets:. The US stockmarkets crept higher as the Dow added 0.4%, anchored by the solid Markit Manufacturing PMI data in June 2021 at 62.1; the highest since May 2007. European stockmarkets were upbeat after the Eurozone’s unemployment rate fell to 7.9% in June 2021; the lowest since May 2020, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI started off the second half of year 2021 with modest gains as bargain hunting activities emerged after the heavy selloff in the previous session. The imposition of EMCO in most areas in Selangor and Kuala Lumpur due to the continued high infection rates may further weigh on investors’ sentiment. Crude palm oil surged after India reduced import duty of CPO to 10%, while Brent oil price climbed mildly after OPEC+ postponed its decision on the oil production plan amid recovering demand for oil, while market participants are expecting an increase in oil production going forward.

Sector focus:. The oil & gas sector may trade actively given the firm Brent oil price at USD75 zone. Besides, bargain hunting activities may emerge in some basheddown counters in sectors such as essential consumer and transportation & logistics as well as technology stocks amid positive sentiment from Wall Street.

The FBM KLCI rebounded from the year’s low to close mildly higher, despite a pullback was noticed in the final trading hour. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered below the 50 level. The resistance will be located around 1,560-1,580 and the support level is envisaged around 1,520.

Company Brief

Samaiden Group Bhd’s wholly-owned subsidiary, Samaiden Sdn Bhd has secured a RM46.4m worth of contract from Greenviro Solutions Sdn Bhd to undertake, among others, the engineering, procurement, construction and commissioning (EPCC) works in Penang. The EPCC works, is in relation to the development of a 10.0-MW large scale solar photovoltaic (LSSPV) power plant at Lot 1478, Mukim 8, Nibong Tebal, Seberang Perai Selatan. (The Star)

T7 Global Bhd has entered into a business collaboration agreement with Siemens Logistics Pte Ltd to target opportunities in Malaysia. The collaboration with Siemens Logistics is expected to create more opportunities for T7 Global to venture into different market. (The Star)

Yinson Holdings Bhd’s floating production storage offloading (FPSO) vessel Lam Son has secured another extension for the charter offshore Vietnam for an estimated US$18.1m (RM75.2m). Its joint venture (JV) PTSC Asia Pacific Pte Ltd had entered into an addendum to extend the tenure of its bareboat charter contract with PetroVietnam Technical Services Corporation (PTSC). (The Edge)

Vivocom Intl Holdings Bhd has entered into a Heads of Agreement (HOA) with Strattner Alternative Credit Fund LP for the latter to invest up to US$350.0m (about RM1.45bn) for subscription to the former’s shares. (The Edge)

Power Root Bhd wholly-owned subsidiary Power Root (M) Sdn Bhd was instructed by the Health Ministry to temporarily suspend its operations at its factory located in Taman Perindustrian Plentong in Masai to conduct sanitisation work to prevent the spread of Covid-19. The move is expected to result in the deferment of shipment to its export customers. (The Edge)

Green Packet Bhd has called off its proposed 3-for-5 rights issue to raise RM328.4m, citing prevailing market conditions and its volatile share price since the proposal was announced. The group also proposed a private placement of not more than 20.0% of its issued share capital to raise between RM30.5m and RM49.0m which would be used for its payables, general expenses, staff benefits and marketing expenses. (The Edge)

Managepay Systems Bhd's wholly-owned subsidiary ManagePay Services Sdn Bhd (MPSB) has applied to Bank Negara Malaysia for a digital banking licence. It is supported by three local strategic partners, namely Bumiputera-controlled entities, which have expressed their interest in investing an aggregate of 45.0% in MPSB should the application be successful and prior regulatory approval. (The Edge)

PUC Bhd has announced that it has, via a consortium formed in collaboration with two state governments and a conglomerate, submitted an application to Bank Negara Malaysia for a digital bank licence in order to create banking solutions for the under-served customers. PUC, however, did not disclose the identity of any of its strategic partners. (The Edge)

Source: Mplus Research - 2 Jul 2021

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