Market Review

Malaysia:. The FBM KLCI (+0.1%) crawled into the positive territory in the final trading hour, lifted by bargain hunting activities in selected index heavyweights. The lower liners extended their gains, while the healthcare (-1.8%) and transportation & logistics (-0.1%) sector underperformed the broader market.

Global markets:. The US stockmarkets retreated as the Dow slipped 0.9% on concern over the inflationary pressure towards the sustainability of economic recovery, coupled with the rising Covid-19 delta variant. European stockmarkets extended their losses, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI registered modest gains for the week on the back of bargain hunting activities after a recent downtrend move, but daily Covid-19 cases which remained above the 10k mark continued to weigh on market sentiment. Nevertheless, the new immunisation target set by the government to fully vaccinate 100 percent of the adult population by October 2021 is expected to boost investors’ confidence towards the path of economic recovery. On a side note, OPEC+ has agreed to increase oil production beginning in August amid improving demand, which may ease the pressure on the supplies as well as oil prices.

Sector focus:. With the improved Covid-19 vaccination progress, investors may shift their focus to recent bashed-down stocks from the recovery theme sectors such as consumer, property and construction as well as building material segment. Also, buying interest in the technology stocks could sustain this week.

The FBM KLCI extended its gains for the second session on technical rebound, but remained struggling to close above the 1,525 resistance level. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level. Investors may keep an eye at the 1,525 resistance level for further upside, while the 1,500 will serve as the support.

Company Brief

Digi.com Bhd’s 2QFY21 net profit declined 2.8% YoY to RM280.0m, due to higher depreciation and amortisation costs for increased right-of-use (ROU) assets. Revenue for the quarter, however, improved 11.4% YoY to RM1.62bn. A second interim dividend of 3.6 sen a share, payable on 24th September 2021 was declared. (The Star)

Privasia Sdn Bhd (PSB), a wholly-owned subsidiary of Privasia Technology Bhd, has secured two contracts from Westports Malaysia Sdn Bhd worth RM46.4m. Both contracts commenced on 1st July 2021 were for the provision of information technology (IT) network, security and internet outsourcing and managed services for one year worth RM6.4m, as well as IT outsourcing and managed services for five years, worth RM40.1m. (The Star)

Kim Loong Resources Bhd’s 1QFY22 net profit rose 23.9% YoY to RM28.4m, mainly due to higher average selling prices of fresh fruit bunches (FFB) and crude palm oil (CPO). Revenue for the quarter gained 55.2% YoY to RM312.5m. (The Star)

Malaysia Airport Holdings Bhd’s Istanbul Sabiha Gokcen International Airport (SGIA) in Turkey has moved towards normalisation. The SGIA registered 2.2m passengers last month following the easing border restrictions on 10th June 2021. Back in Malaysia, MAHB’s airports saw 187,000 passengers in June 2021, down 57.1% YoY, amid declines in both KLIA and the other local airports MAHB operates. (The Edge)

The High Court has fixed 27th October 2021 for the hearing of AirAsia X Bhd and AAX Leasing Ltd's application to set aside the foreign judgement obtained by its creditor BOC Aviation Ltd in the UK against the airlines to pay US$23.4m (RM96.8m) that is enforced in the Malaysian courts. (The Edge)

Pos Malaysia Bhd has enhanced its E-commerce Fulfilment Solution (EFS) to meet the needs of the rapid change in the e-commerce landscape, and the high expectations and demands from customers. Pos Malaysia said EFS customers can benefit from the end-to-end service that is offered by the company, as the service simplifies the overall e-commerce process for customers. (The Edge)

Amid news reports on the government's plan to stop administering Sinovac Covid19 vaccines in Malaysia once its supplies end, Pharmaniaga Bhd clarified that the discontinuation is actually due to the company meeting its obligation to supply a total of 12.0m doses. Pharmaniaga contractual obligation with the government is to supply 12.0m doses of the vaccine by Pharmaniaga LifeScience Sdn Bhd (PLS), between May 2021 and November 2021. The group will continue with the supply of Sinovac vaccines to State governments, government agencies and the private sector. (The Edge)

Scope Industries Bhd has reported that its one-for two rights issue at 17.5 sen per rights share was oversubscribed by 33.7%. The rights shares will be listed on 27th July 2021. (The Edge)

Willowglen MSC Bhd has secured a three-year contract worth about RM41.6m from Singapore's Public Utilities Board for the Security System and Facility Enhancement at various PUB Waterworks and Desalination Plants. The contract will span from 26th July 2021 to 25th July 2024. (The Edge)

Berjaya Corp Bhd (BCorp) has reported that the strategic plans mentioned by its chief executive officer Abdul Jalil Rasheed at a virtual event recently were merely personal ideas and strategies, and that its board is not aware of them and has not deliberated on any of them. BCorp has mandated Jalil to relook at the BCorp structure, as well as improve synergies and efficiency, streamline the various group businesses and transform the group into a high performing organisation. The board of directors will deliberate on the finalised proposals which will be tabled for consideration and decision. (The Edge)

Source: Mplus Research - 19 Jul 2021