Market Review

Malaysia:. The FBM KLCI (-0.3%) retreated on the back of quick profit taking activities with more than two-third of the key index constituents closed in the red. The lower liners, however, extended their upsides, while the broader market ended mostly lower with the transportation & logistics sector (-0.5%) underperformed.

Global markets:. The US stockmarkets recorded another winning streak as the Dow gained 0.7%, fuelled by solid corporate earnings releases with approximately 87.0% of results that have been released topped estimates. European stockmarkets extended their gains, while Asia stockmarkets closed mostly lower.

The Day Ahead

The FBM KLCI finished the week on a negative note, in line with the mixed regional performances due to resurgence of Covid-19 infections globally. While the local bourse has been trading in upward bias consolidation mode last week, investors may remain cautious with the five-day special Parliament sitting this week. Nevertheless, we expect investors to shift their attention from the daily Covid-19 infection rates to the current ongoing vaccination rate, which is above the 400k doses per day; this should provide some booster in stabilising the market sentiment and focus on recovery theme stocks. Meanwhile, both the CPO and Brent oil price surged last week.

Sector focus:. The positive developments on Nasdaq may continue to shine a light on the local technology stocks. Besides, the plantation counters may extend its gains in line with the surge in CPO price amid concerns over weaker output. Recovery theme stocks may expect buying interest going forward.

The FBM KLCI staged a pullback to close just above the daily EMA9. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI was still hovering below the 50 level. While the key index is struggling to climb towards its resistance at 1,530-1,550, the FBM KLCI may trade sideways. The support level is envisaged around 1,500.

Company Brief

British American Tobacco (M) Bhd’s 2QFY21 net profit expanded 31.1% YoY to RM71.6m, driven by improvement in domestic sales volume. Revenue for the quarter added 9.0% YoY RM595.0m. A second interim dividend of 24 sen a share, payable on 20th August 2021 was declared. (The Star)

NTPM Holdings Bhd’s 4QFY21 net profit rose 37.3% YoY to RM5.6m on lower operating cost. Revenue for the quarter, however, fell 6.5% YoY to RM188.5m. (The Star)

IOI Corp Bhd has engaged BSR, a global non-profit organisation and sustainability consultancy to facilitate a recently-held sustainability consultation forum (SCF) to gather feedback from external stakeholders on systemic labour challenges faced by the oil palm sector in Malaysia. (The Edge)

Hextar Global Bhd, which has joined the race for a digital banking licence is buying a 49.0% stake in ENRA Kimia for RM24.5m cash. ENRA Kimia is a wholly-owned indirect subsidiary of ENRA Group Bhd, is one of the largest distributors of specialty chemicals and catalyst for the oil and gas industry in Malaysia. (The Edge)

Pertama Digital Bhd is raising its stake in govtech software company, Dapat Vista (M) Sdn Bhd, by exercising its contractual option to buy an additional 24.0% equity in the software company. Pertama Digital’s subsidiary, Television Airtime Services Sdn Bhd, will be acquiring the stake from HeiTech Padu Bhd. Upon completion of the transaction, Pertama Digital's stake in Dapat will increase to 80.0%, while HeiTech holds 20.0%. (The Edge)

Seni Jaya Corp Bhd, which recently proposed a private share placement, has announced a proposal to undertake the bonus issue of warrants on the basis of one bonus warrant for every two existing ordinary shares. The exercise entails the issuance of up to 24.3m warrants under the maximum scenario, which assumes the completion of the private placement prior to the entitlement date of the warrants. This means that investors who take up the share placement would be entitled to the bonus issue. (The Edge)

One day after the news of its 51.0%-owned unit securing an RM112.0m one-year contract to supply Covid-19 test kits to the Ministry of Health, Hong Seng Consolidated Bhd has announced that it is also venturing into distributing Covid-19 antibody testing kits. Hong Seng is acquiring 51.0% stake in Covid-19 antibody testing distributor RZAC Immunesafe Sdn Bhd for RM40.3m. RZAC is currently the sole distributor of the Biochip Test Kits which have been approved for use by the Medical Device Authority. (The Edge)

Source: Mplus Research - 26 Jul 2021