Market Review

Malaysia:. The FBM KLCI (-0.1%) extended its losses to close flat again in view of the lack of fresh leads, coupled with quick profit taking activities. The lower liners, however, extended their gains, while the financial services sector (-0.3%) underperformed the positive broader market.

Global markets:. The US stockmarkets snapped their recent streak of gains as the Dow fell 0.6% after the 10Y treasury yields sank to the lowest level since February 2021 amid concern over the impending Fed tapering. European stockmarkets also retreated, while Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI posted a mild decline as investors remained cautious while awaiting for the release of minutes from the US Fed Reserve June’s meeting for more clarity on the monetary policy. With the Covid-19 cases spiking above 7,000 mark per day despite the improvement in vaccination rate, the local bourse is likely to stay wary, while monitoring Malaysia’s Bank Negara interest rate decision tomorrow. Meanwhile, oil prices dropped after talks between OPEC and the rally was unable to sustain following failure to agree on production policy.

Sector focus:. We opine the spike in Covid-19 daily confirmed cases may shift investors’ focus to the glove sector, albeit just a short term trade. Nevertheless, the plans to set up more than 30 large-scale vaccination centres by 19th July may speed up the vaccination rate, thus benefiting the recovery theme sector such as essential consumer stocks. Meanwhile, technology stocks are still favourable to trend higher amid positive Nasdaq moves.

The FBM KLCI settled lower for the third consecutive session as the key index traded sideways. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI is hovering below the 30 level. The key index may trade in a tight range moving forward with resistance set at 1,560-1,680, while the support level is envisaged around 1,500-1,520.

Company Brief

TSH Resources Bhd has entered into a deal with a private company Sharikat Keratong Sdn Bhd to sell two oil palm estates measuring 7,431-ac and a mill in Kinabatangan, Sabah. The proposed disposal the group to pare down its borrowings at RM1.13bn as of end-2020. (The Star)

AEON Credit Service (M) Bhd's 1QFY22 net profit surged 520.6% YoY to RM163.1m on higher total transaction and financing volume. Revenue for the quarter increased 5.4% YoY to RM411.0m. (The Star)

Top Glove Corp Bhd and Kossan Rubber Insdustries Bhd are temporarily halting the operations of its medical glove factories in Klang following the imposition of the Enhanced Movement Control Order (EMCO) in the district. Hartalega Holdings Bhd has also initiated a full shutdown of its entire glove manufacturing facilities in Bestari Jaya and Sepang because of EMCO. (The Edge)

CB Industrial Product Holding Bhd (CBIP) wholly-owned subsidiary PalmitEco Engineering Sdn Bhd (PESB) had resumed manufacturing operations at its Telok Panglima Garang plant after it received an approval letter from the Ministry of Health on 2nd July 2021, but closed again after the EMCO was imposed the next day. PESB has temporarily stopped operations after the tighter restrictions were announced for 3rd July 2021 to 16th July 2021. (The Edge)

Serba Dinamik Holdings Bhd is expecting to appoint a new auditor by the end of the month, as its former external auditor KPMG PLT resigned last month after the oil & gas engineering firm filed a lawsuit against the latter. Serba Dinamik also has requested a meeting with the Companies Commission of Malaysia for a consultation in relation to the appointment of external auditor pursuant to Section 272 of the Companies Act 2016. (The Edge)

Hubline Bhd's subsidiary Layang Layang Aerospace Sdn Bhd has been awarded a RM29.0m contract to provide inspection and calibration services for the Civil Aviation Authority of Malaysia. The contract is for duration of 60 months from 1st January 2022 to 31st December 2026. (The Edge)

Source: Mplus Research - 7 Jul 2021