Market Review

Malaysia:. The FBM KLCI (-0.5%) was bogged down by concerns over the pace of the economic recovery with daily Covid-19 cases stood at five digits over the past 2 days. The lower liners also ended flat, while the technology (+3.2%) and healthcare (+0.6%) sector outperformed the negative broader market.

Global markets:. The US stockmarkets rose as the Dow added 0.1% after the US Federal Reserve Chairman Jerome Powell tipped that the US economic recovery has yet to reach the levels to scale back asset re-purchases. European stockmarkets closed mostly flat, while Asia stockmarkets finished mostly lower.

The Day Ahead

The FBM KLCI trended lower on the back of the alarming rise in Covid-19 daily cases, overshadowing optimism on the improving vaccination rates in the country. We reckon the local bourse should continue to trade in consolidation mode until Malaysia could transition into Phase 2 in the National Recovery Plan. Meanwhile, the market may watch a series of China’s economic data which will be released today. Commodities wise, the CPO price climbed above the RM4,000 level in line with soybean futures, while the crude oil price staged a pullback.

Sector focus:. We noticed the breakout in technology index yesterday, hence we expect the buying interest to sustain at least for the near term. Meanwhile, the firmer CPO price would bode well for some plantation counters. Besides, the healthcare sector is likely to anticipate short term rebound trade on the back of the unabated Covid-19 cases in the country.

The FBM KLCI slid amid continuous jittery sentiment as the key index consolidated above the 1,500 level. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was hovering closer to the 30 level. With investors staying on the sidelines, we expect the key index to trade within resistance set at 1,525-1,548 and the support at 1,500.

Company Brief

Pharmaniaga LifeScience Sdn Bhd (PLS), a subsidiary company of Pharmaniaga Bhd (Pharmaniaga), is expected to deliver 12.4m doses of the Sinovac Covid-19 vaccine to the government by next week, instead of November 2021 under the original agreement. The supply was being hastened by four months following the surge in cases since April 2021 while PLS was operating 24 hours each day in order to achieve the target. To-date, PLS had delivered 11.5m doses or 92.7% of the Sinovac vaccine, comprising 3.6m doses through fill and finish manufacturing and 7.9m doses of the finished product that was imported. (The Star)

WCT Holdings Bhd wholly-owned subsidiary WCT Bhd (WCTB) and Meydan Group LLC have entered into a settlement agreement under which Meydan will pay WCTB 726.6m United Arab Emirates dirham (RM828.3m) in a full settlement linked to the Nad Al Sheba Dubai Racecourse contract dispute between both parties. The settlement amount is equivalent to 65.0% of the principal sum of 1.15bn dirham awarded to WCTB earlier by Dubai’s Arbitral Tribunal under the final award in relation to the dispute. (The Edge)

Kejuruteraan Asastera Bhd (KAB) is partnering with the Philippines-based LCS Holdings Inc and ATS Venture Group Sdn Bhd to build and operate a telecommunication tower project in the Philippines. KAB has entered into a tripartite Memorandum of Understanding with LCS and ATS. (The Edge)

GDEX Bhd has reported that there has been a recent cybersecurity breach to its financial server and that it has activated its Data Recovery and Security Mitigation Plan. Investigations so far have shown there is no indication of leakage of confidential information, including customers' data. (The Edge)

Zhulian Corporation Bhd’s 2QFY21 net profit fell 9.4% YoY to RM10.3m, as Covid19 caused severe social and economic disruptions and uncertainties, including in markets where the group operates. Revenue for the quarter slipped 3.9% YoY to RM37.9m. A second interim dividend of 3.0sen per share, payable on 1st September 2021 was declared. (The Edge)

Sand Nisko Capital Bhd (SNC) has secured RM34.5m worth of construction projects from related party DPS Resources Bhd (DPS). Its wholly-owned subsidiary Len Cheong Industries Sdn Bhd has accepted seven letters of awards (LOAs) on various property development projects in Melaka from Shantawood Sdn Bhd, a wholly-owned subsidiary of DPS. (The Edge)

IHH Healthcare Bhd has signed new long-term master lease agreements for three hospitals in Singapore with Parkway Life Real Estate Investment Trust (PLife REIT). The 20Y extension to end-2042, with a 10-year option, involves Mount Elizabeth Hospital, Gleneagles Hospital and Parkway East Hospital. The deal also comes with a commitment from PLife REIT to invest S$150.0m in capital expenditure to revamp the hospitals over three years. (The Edge)

Two experts (migrant rights activist Andy Hall and human rights lawyer Justine Nolan) on Sime Darby Plantation Bhd's human rights commission had resigned, effective today from the panel due to lack of transparency, in a potential setback for the company's efforts to overturn a US import ban. The palm oil giant established the commission in March 2021, after the United States imposed a ban on imports from the firm over accusations of forced labour. (The Edge)

LKL International Bhd’s 4QFY21 net loss stood at RM3.8m, from a net profit of RM3.2m recorded in the previous corresponding quarter, underpinned by a less favourable product mix and higher administrative expenses. Revenue for the quarter declined 56.0% YoY to RM9.4m. (The Edge)

One of the conditions precedents in Hibiscus Petroleum Bhd's acquisition of upstream oil and gas assets from Spanish oil major Repsol has been fulfilled, which brings the oil explorer one step closer to concluding its acquisition of the latter's upstream assets in Malaysia and Vietnam. The waiver and/or expiry of preexemption rights held by Petronas Carigali Sdn Bhd and PetroVietnam Exploration Production Corp under each of the relevant joint operation agreement for the assets had been satisfied. (The Edge)

Nestcon Bhd has bagged a RM31.3m contract to carry out rock stabilisation works at a mixed development on a 61.0-ac site in Damansara Perdana. The development includes construction of 20 blocks of office towers, five blocks of serviced apartments and SoHo, six blocks of serviced apartments and affordable homes business spaces, hotel and private school. (The Edge)

Source: Mplus Research - 15 Jul 2021