Market Review

Malaysia:. The FBM KLCI (+0.4%) managed to recover most of its previous session losses after hovering in the positive region for the entire trading session, boosted by bargain hunting in gloves heavyweights. The lower liners edged mildly higher, while all 13 major sectors on the broader market ended fairly upbeat.

Global markets:. The US stockmarkets retreated from their all-time high levels as the Dow fell 0.3% on the back of concern over the impending US Federal Reserve asset tapering after June 2021 inflation rose 5.4% YoY. European stockmarkets ended marginally lower, while Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI rebounded from losses as the key index was buoyed by bargain hunting activities, coupled with positive sentiment in the regional market following upbeat China economic data. Nevertheless, we expect the buying interest may be limited as the daily Covid-19 cases in the country increased to record high as more Delta variant cases were detected. Meanwhile, International Energy Agency (IEA) warned of a tighter oil market as OPEC+ is set to keep output levels unchanged despite rising global demand underpinned by global economic growth amid rising vaccination rates; the crude oil is hovering above USD75, while CPO traded closer to RM4,000.

Sector focus:. With the oil prices sustaining above USD76, we expect further buying interest in the oil & gas counters. Besides, traders may look out for glove stocks for shorter-term trade amid the spike in local Covid-19 daily confirmed cases. Also, we noticed buying interest within technology stocks have been picking up and could continue over the near term.

The FBM KLCI staged a rebound from previous session’s losses as sideways trading mode continued. Technical indicators are starting to turn positive as the MACD Histogram has extended a green bar, while the RSI is gradually moving above the 30 level. The key index could be finding some stability above the 1,500 support level, with resistance set at 1,525-1,548.

Company Brief

Pelikan international Corporation Bhd (PICB) plans to use RM120.6m from the sale of its logistics centre in Germany to reward shareholders with a special dividend within six months. Based on the issued share of 608.1m shares, this would work out to 20 sen a share. Meanwhile, RM200.0m would be used to repay bank borrowings, RM41.3m as working capital, RM24.0m for internal reorganisation related costs and RM12.8m as estimated expenses. (The Star)

Malakoff Corporation Bhd’s subsidiary will develop rooftop solar energy systems for DRB-Hicom Group Bhd under a 25-year deal. Malakoff subsidiary, Malakoff Radiance Sdn Bhd had completed the signing of six solar power purchase agreements for the systems with companies under the DRB-Hicom group. Upon completion, these facilities are expected to generate 18,836MW/h of clean electricity per annum. (The Star)

G Capital Bhd (GCAP) will undertake a renounceable rights issue that entails the issuance of up to RM102.6m of 1.28bn redeemable convertible unsecured loan stocks (RCULS), mainly to part-finance projects involving renewable energy (RE) solutions. The proposed rights issue enables the group to fix funding cost for a period of five years, thereby reducing its exposure to interest rate fluctuations. GCAP group is also in the process of identifying suitable strategic partners to venture into non-RE sectors, particularly in liquefied petroleum gas and liquified natural gas business. (The Star)

Sedania Innovator Bhd's 51.0%-owned subsidiary Offspring Inc, which produces baby products including eco-friendly diapers and biodegradable wet wipes, is expanding into Thailand to further expand Offspring's global presence. Offspring will be made available on a dedicated web store designed specifically for Thailand in bilingual languages and products will also be available in top online shopping platforms such as Shopee and Lazada Thailand. (The Edge)

Sime Darby Plantation Bhd's June 2021 foreign shareholding fell to its lowest on record at 9.0%, from 9.1% in May 2021. The highest record was at 13.9% back in December 2017. (The Edge)

Boustead Plantations Bhd has yet to engage with any interested party over its plan to sell its Sarawak estates. This is in respond to an article in the latest issue of The Edge Malaysia weekly that the corporate entity is seeking prospects to unlock the values of their assets, including the estates in Sarawak. (The Edge)

Genetec Technology Bhd is unaware of any specific reason behind the unusual trading of its shares, besides its recent announcement on 17th June 2021 in relation to new orders it had secured. In response to Bursa Malaysia’s unusual market activity query, there has been no corporate development in relation to its business and affairs that have yet to be announced, including those in the stage of negotiation or discussion. (The Edge)

Source: Mplus Research - 14 Jul 2021