Market Review

Malaysia:. The FBM KLCI (-0.2%) retreated, weighed down by the political uncertainties as the Parliament sitting was postponed several times at the later part of the day. The lower liners closed mostly lower, while the plantation (+0.4%) and energy (+0.4%) sectors outperformed the negative broader market.

Global markets:. The US stockmarkets turned upbeat as the Dow gained 0.4% despite the weaker-than-expected jobs and 2Q21 GDP data that expanded 6.5% YoY, which will re-inforce the US Feds stance on accommodative policies. European stockmarkets extended their gains, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI edged lower amid uncertainties surrounding the recent political developments, as well as the Covid-19 pandemic, contributing to the investors staying sidelines. This would result in heightened volatility in the market and traders should turn more cautious over the near term in selecting stocks to trade. On a side note, China’s move to raise export tariffs on some steel materials, and removed rebates on cold-rolled products may exert pressure on the commodities prices as demand continues to rise over the past year.

Sector focus:. Investors may see some buying interest in the electric vehicle related stocks following the solid result from GENETEC. Also, the gains in Nasdaq may further spill over to the local technology sector. Meanwhile, given the rise in crude oil and crude palm oil prices, we expect trading interest to increase in plantation and O&G sectors.

The FBM KLCI erased its gains in the afternoon trading session, closing below the daily EMA9 level. Technical indicators remained negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level. We expect the key index to move between the support of 1,500 and resistance of 1,530-1,550 within the sideways drift.

Company Brief

CTOS Digital Bhd is buying a 4.6% stake in rating agency RAM Holdings Bhd from CIMB Bank Bhd for RM10.1m. It had entered into a share purchase agreement with CIMB to buy the stake, comprising 462,500 shares. The exercise is expected to be completed on the same day as the agreement. (The Star)

MRCB George Kent Sdn Bhd, a joint venture between Malaysian Resources Corporation Bhd (MRCB) and George Kent (M) Bhd has issued a stop work order to one of its contractors, following the collapse of a scaffolding at a LRT project site in Klang, killing one construction worker and injuring three others. The company said it will be cooperating with all authorities to investigate the accident and will also appoint an independent consultant to investigate its root cause. (The Edge)

Sime Darby Bhd, which has appointed CGS-CIMB Securities Sdn Bhd as the stockbroker to facilitate the diversified group’s share buyback believes there is value in the company's shares and that the share buyback will provide some support to its share price. Once Sime Darby buys its shares on the open market and convert them into treasury securities, the treasury shares can be given out as dividends to reward shareholders. (The Edge)

Frontken Corp Bhd's 2QFY21 net profit rose 21.7% YoY to RM24.7m, on improved contributions from subsidiaries in Taiwan, Malaysia and Singapore. Revenue for the quarter increased 24.0% YoY to RM108.6m. (The Edge)

T7 Global Bhd's Bayan mobile offshore gas production unit has reached its second construction milestone, with the keel laying at a shipyard in Qingdao, China. It is set to be installed offshore Sarawak for Petronas Carigali Sdn Bhd's Bayan Gas Redevelopment Project Phase 2 to boost gas production in the Bayan field upon completion in 2022. (The Edge)

Nextgreen Global Bhd has proposed to undertake a private placement of 5.3% of its total number of issued shares to raise up to RM21.1m, based on an illustrative issue price of 57 sen per placement share for its tissue paper mill joint venture. The private placement of up to 37.0m shares will be issued to third-party investors to be identified later and at an issue price to be determined later. (The Edge)

Genetec Technology Bhd’s 1QFY22 net profit stood at RM8.2m vs. a net loss of RM2.1m recorded in the previous corresponding quarter, underpinned by higher sales volume and improved operational efficiency. Revenue for the quarter jumped 224.1% YoY to RM40.3m. (The Edge)

KIP Real Estate Investment Trust (KIP REIT)’s 4QFY21 net property income rose 13.9% YoY to RM15.1m, on improved average occupancy rate across its six malls, coupled with better promotional area income. Revenue for the quarter increased 14.8% YoY to RM19.4m. A final income distribution per unit of 2.1 sen, payable on 27th August 2021 was declared. (The Edge)

LYC Healthcare Bhd's wholly-owned LYC Mother & Child Centre Sdn Bhd has suspended its confinement centre in Bukit Jalil, Kuala Lumpur for 14 days till Aug 11, following the discovery of seven Covid-19 infections there. LYC’s subsidiary had on 27th July 2021 conducted Covid-19 screening tests on all its employees and customers. (The Edge)

EcoFirst Consolidated Bhd’s 4QFY21 net profit soared a 646.1% YoY to RM15.9m boosted by a fair value gain of RM13.7m. Revenue for the quarter, however, fell 41.7% YoY to RM14.0m. (The Edge)

Source: Mplus Research - 30 Jul 2021