Market Review

Malaysia:. The FBM KLCI (-0.7%) extended its losses alongside with the weakness across regional peers after languishing in the negative zone for most off the trading session. The lower liners also retreated, while all 13 major sectors on the broader market finished lower with the healthcare sector (-2.1%) underperformed.

Global markets:. The US stockmarkets recovered from their intraday losses to extend their gain as the Dow climbed 0.2%, boosted by optimism over the recent bath of strong corporate earnings. European closed mixed, while Asia stockmarkets finished mostly lower.

The Day Ahead

Investors started off the week on a softer note as both the FBM KLCI and the broader market slumped, in line with the negative performances in China and Hong Kong shares amid concerns over tightening regulations on selected sectors. However, we expect bargain hunting activities to emerge on the local bourse after the selldown as market players might have priced in news from China or Hong Kong. Meanwhile, investors should focus on vaccination rate instead of ongoing high number of daily Covid-19 cases as government will be looking on reopening of business activities going forward. Commodities wise, both the CPO and crude oil prices extended their gains.

Sector focus:. After the heavy selldown yesterday, we expect to see buying interest in plantation and oil & gas stocks amid rising commodities prices. Also, technology stocks could expect higher buying interest after some selldown yesterday.

The FBM KLCI slipped into the negative territory shortly after the market opened and closed below the daily EMA9 level. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level. Given the technical readings are still negative, the key index may continue to consolidate above the support around 1,500, while the resistance is located at 1,530

Company Brief

Dagang Nexchange Bhd (DNeX) has completed the acquisition of a 60.0% stake in SilTerra Malaysia Sdn Bhd from Khazanah Nasional Bhd, making DNeX the majority shareholder of SilTerra. DNeX’s acquisition of the 60.0% stake in SilTerra was valued at RM168.3m, while CGP Fund owns the remaining 40.0% in the nation’s largest chipmaker. (The Star)

ES Ceramics Technology Bhd’s 4QFY21 net profit stood at RM14.5m vs. a net loss of RM0.3m recorded in the previous corresponding quarter, on strong demand and higher selling prices. Revenue for the quarter surged 404.6% YoY to RM42.8m. (The Star)

Serba Dinamik Holdings Bhd has nominated Nexia SSY PLT as its new external auditors for the financial year ending 30th June 2021. Nexia is ranked among the top ten global accounting firms. Nexia SSY PLT to fill in the vacancy for the new statutory auditors of the company in accordance with the Companies Act 2016 for the financial year ended 30th June 2021, subject to amongst others, professional clearance from KPMG PLT in accordance to Section 320 By-Law of the Malaysian Institute of Accountants. (The Star)

KPMG PLT has resigned from its role as the external auditor of Sarawak Consolidated Industries Bhd (SCIB), the largest maker of precast concrete products in Sarawak, effective immediately. SCIB had received a notice in writing dated 23rd July 2021 from KPMG on its resignation as the auditor. (The Edge)

CIMB Group Holdings Bhd's subsidiary CIMB Bank Bhd has proposed to issue HK$640.0m (about RM348.0m) worth of bonds under CIMB Bank’s US$5.00bn Euro Medium Term Note (EMTN) programme. The bond scheme pays investors an interest rate of 1.1% a year will be issued on 27th July 2021 and will mature on 17th July 2026. (The Edge)

Unisem (M) Bhd has temporarily suspended the operations of its Ipoh plant in Kawasan Perindustrian Pulai Jaya from 25th July 2021, in line with the implementation of the Enhanced Movement Control Order (EMCO) by the government. On 24th July 2021, the National Security Council had imposed EMCO on Bandar Pulai Jaya from 26th July 2021 to 8th August 2021, in which Unisem’s plant is situated. (The Edge)

Energy solutions provider T7 Global Bhd has bagged a contract to provide mini remotely operated vehicle (ROV) underwater services for Pan-Malaysia underwater services for petroleum arrangement contractors – Package B. The value of the award is based on the prices stipulated in the award. The contract is effective from 12th July 2021 until completion of the platform inspection campaign by the end of 2022. (The Edge)

AirAsia Group Bhd’s application to extend the deadline of its private placement by five months has been approved by Bursa Malaysia following the submission of the application on 19th July 2021. AirAsia is now seeking the extension to complete the private placement of the remaining 198.2m shares. (The Edge)

UMW Holdings Bhd is expecting minimal sales for both UMW Toyota Motor (UMWT) and Perodua in July 2021, amid the prolonged lockdown. The ongoing Full Movement Control Order 3.0 has adversely impacted the domestic automotive sector, with only 1,921 units sold in June 2021. (The Edge)

Kejuruteraan Asastera Bhd (KAB)’s wholly-owned subsidiary KAB Smart Solar Energy Sdn Bhd (KSSE) has received a letter of award (LoA) from Mydin Wholesale Emporium Sdn Bhd and inked a principal term sheet agreement with FT Hose & Hose Sdn Bhd to install a total of 4,971-kWp solar systems for Mydin Mall Tunjong in Kelantan. (The Edge)

Majuperak Holdings Bhd will be leading the purchase of vaccines for the Perak Vaccine Programme (PVP) for Perak State Development Corp (PSDC), which has been granted the authority to lead the purchase of vaccines for the PVP by the Perak state government. Majuperak is taking the lead to ensure a consistent and authorised supply of the vaccines to address the need for a greater supply for the state, following the federal government's recent approval for state governments and the private sector to purchase vaccines. (The Edge)

BCM Alliance Bhd is teaming up with Hong Kong-based rLoop Ltd to manufacture and assemble virus attenuation devices using photon-mediated electrons and emitters under rLoop’s own brand name “rGuard”. BCM Alliance wholly-owned subsidiary BC Medicare Sdn Bhd has entered into a memorandum of understanding with rLoop on the proposed project. (The Edge)

YBS International Bhd has reported that its annual report for the financial year ended 31st March 2021 (FY21) will be issued one month later, that is, by 31st August 2021. The extension of time for the issuance of its FY21 annual report is due to disruption in the operations of its service provider, that is, the printer and mailer for the distribution of its annual report, and pending engagement of the service provider for its virtual annual general meeting. (The Edge)

Source: Mplus Research - 27 Jul 2021