Market Review

Malaysia:. The FBM KLCI (-0.2%) closed in the negative territory prior to the midweek break, dragged down by the eleventh-hour selling pressure in Petronasrelated heavyweights. The lower liners, however, extended their gains on rotational play, while the broader market ended mixed.

Global markets:. The US stockmarkets staged a sharp recovery from the previous session selloff as the Dow gained 1.6% as investors brushed off the concern over Covid-19 and focuses on the on-going batch of corporate earnings. European stockmarkets also rebounded, while Asia stockmarkets closed mostly lower.

The Day Ahead

The FBM KLCI retreated on Monday due to last minute profit taking activities prior to the Hari Raya Haji public holiday, mirroring the weakness across the regional markets. Nevertheless, buying interest emerged in selected recovery theme sectors after the EMCO was lifted in Selangor and Kuala Lumpur. Despite the rebound on Wall Street, we expect some initial selling activities on the local bourse before recovering for the session, but upside is likely to be capped amid the high number of daily Covid-19 cases, which may be a concern that could dampen the pace of the economic recovery.

Sector focus:. Meanwhile, with the recovery in Nasdaq, we reckon the technology stocks may gain traction for the week. Besides, there might be follow through buying interest emerging in sectors such as consumer, construction and property as EMCO was lifted in several localities.

The FBM KLCI erased all its intraday gains to close lower as the key index dipped into the negative territory in the final hour. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level. We expect the sideways trading pattern to continue, with resistance set at 1,525-1,548, while the support level is envisaged around 1,500.

Company Brief

Latitude Tree Holdings Bhd factory operations in Kuala Trengganu have been temporarily suspended due to Covid-19 infection among its workers. Meanwhile, operations at two of its factories in Vietnam were also halted for six days from 19th July 2021 to 24th July 2021 to comply with local Covid-19 regulations. (The Star)

AMMB Holdings Bhd 51.0%-owned AmGeneral Holdings Bhd will be disposing of its entire 100.0% stake in AmGeneral Insurance Bhd to Liberty Insurance Bhd (LIB) for RM2.29bn, to be satisfied via cash and a 30.0% stake in LIB. The price tag of RM2.29bn is subject to adjustments. (The Edge)

Touch 'n Go Group and Mr DIY Group (M) Bhd has announced several strategic collaborations to enhance customer experience across online and offline channels, while working on a more relevant approach to marketing through personalisation of offers using data and analytics capabilities. The strategic partnership allows Touch 'n Go eWallet users to seamlessly browse Mr DIY's catalogue, order and pay for the items they want, and have the purchases delivered, or ready for pickup at their store of choice, and will be launched in 3Q21. (The Edge)

Kanger International Bhd unit, Kanger Medical International Sdn Bhd has entered into a deal with Sparmak Medical Equipment Trading LLC for the purchase of 5.0m doses of Sinopharm Covid-19 vaccine for distribution in Malaysia. Sparmak Medical is an authorised partner of G42 Medications Trading LLC to purchase Sinopharm Covid-19 vaccine manufactured in the United Arab Emirates under the Hayat-Vax brand. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) has asserted that procurement processes for all its tenders were conducted in strict compliance with the procurement standard operating procedures, with the Anti-Bribery Management System serving as an additional safeguard to provide another layer of control within the company's processes. These controls were placed at both human and process levels and would act as an intervention to close any possible gap. (The Edge)

Malayan Banking Bhd (Maybank) is committed to allocating RM50.0bn in sustainable financing as part of its sustainability policy which is embarked in its five-year strategic plan that runs until 2025. The commitment covers direct lending or investment, and services related to arranging, syndicating, fundraising or underwriting as well as advisory, all of which will integrate environmental, social and governance criteria. (The Edge)

Tenaga Nasional Bhd (TNB) which is eyeing a leading role in the development of electric vehicle (EV) charging infrastructure nationwide, wants to collaborate with partners to drive EV adoption in Malaysia. In Malaysia, EV adoption is seen as a way to reduce carbon emissions but studies have shown that infrastructure is among top considerations influencing adoption. (The Edge)

Boustead Heavy Industries Corp Bhd (BHIC) has received a one-year contract extension for the provision of In-Service Support for Prime Minister's Class Submarines for the Royal Malaysian Navy for RM159.2m. The contract extension was awarded by the Ministry of Defence to BHIC's 60.0%-indirect unit Boustead DCNS Naval Corp Sdn Bhd. The contract is effective from 1st January 2021 to 31st December 2021. (The Edge)

MSM Malaysia Holdings Bhd will evaluate the interest in MSM Johor by any party with the prerequisite of an offtake guarantee. The sugar refiner was responding to an article in the latest issue of The Edge Malaysia weekly that Singapore-based Wilmar International Ltd might be looking to invest in an underutilised refinery in Johor owned by the group. (The Edge)

Konsortium Transnasional Bhd and six other companies linked to the group have succeeded in their lawsuit to get Tan Chong Motor Holdings Bhd to return all buses repossessed from them and to repay a sum of RM22.7m. The High Court has also ordered the return of a land acquisition compensation sum of RM0.9m by its wholly-owned unit, Tan Chong Industrial Equipment Sdn Bhd, to the seven companies. (The Edge)

Source: Mplus Research - 21 Jul 2021