Market Review

Malaysia:. The FBM KLCI (-0.2%) extended its losses, mirroring the weakness across regional peers as the key index recorded its third straight monthly decline, falling 2.5% MoM. The lower liners extended their losses, but the technology (+0.4%) and healthcare (+0.4%) sectors outperformed the negative broader market.

Global markets:. The US stockmarkets retreated as the Dow fell 0.4% on concern over weakening economic growth and lofty valuations. Meanwhile, both the European and Asia stockmarkets also closed lower, as China intensifies the crackdown on technology, education and property sectors.

The Day Ahead

The FBM KLCI tumbled on Friday as investors grew wary of the pace of the economic following the spike in the daily Covid-19 confirmed cases as well as recent political developments. Market sentiment dimmed, leading to the selling from foreign funds over the past five trading days. We expect the weakness to continue for this week without any fresh catalyst. Meanwhile, the CPO price dropped despite concerns over lowering output, while the crude oil price stood above the USD76 per barrel level.

Sector focus:. Investors may focus on the oil and gas counters as the crude oil price remains high. Besides, investors might see some trading interest in the healthcare sector on the back of high Covid-19 daily cases as earnings season is starting. Also, building material segment may continue to stay focus following the raising of export tariffs by China last week.

The FBM KLCI finished the week on a negative note as the key index broken below the 1,500 support level. Technical indicators turned negative as the MACD Histogram has turned lower, while the RSI hovered below the 50 level. Downside risks may continue for the week while investors may monitor for the next support level at 1,480 if the key index could not cross above the 1,500 level.

Company Brief

Maxis Bhd’s 2QFY21 net profit grew 5.3% YoY to RM360.0m, on stronger core mobile and home broadband businesses. Revenue for the quarter increased 5.2% YoY to RM2.26bn. A four sen dividend per share, payable on 30th September 2021 was declared. (The Star)

Westports Holdings Bhd’s 2QFY21 net profit gained 32.8% YoY to RM178.0m, driven by higher container volume. Revenue for the quarter climbed 17.2% YoY to RM505.0m. (The Star)

Unisem Bhd’s 2QFY21 net profit rose 60.9% YoY to RM54.6m, on strong demand that pushed up sales. Revenue for the quarter rose 29.7% YoY to RM402.2m. An interim dividend of 2.0 sen per share, payable on 3rd September 2021 was declared. The company has also proposed a one-for-one bonus issue. (The Star)

Malaysia Marine and Heavy Engineering Holdings Bhd’s (MMHE) 2QFY21 net loss narrowed to RM34.4m vs. a net loss of RM397.0m recorded in the previous corresponding quarter, on the back of better performance from the heavy engineering and marine segments. Revenue for the quarter jumped 94.7% YoY to RM302.5m. (The Star)

IOI Corp Bhd is restructuring its US$600.0m (RM2.54bn) bond, a move which may include new issuance of notes and securing term loans from banks as the oil palm plantation company eyes mergers and acquisitions (M&A) for growth. The US$600.0m bond, which is due in June 2022, represented around half of IOI Corp's reported borrowings as of 31st March 2021. (The Edge)

Kerjaya Prospek Group Bhd has accepted a letter of award from Damansara Peak Sdn Bhd, an indirect subsidiary of Eastern & Oriental Bhd (E&O), worth RM139.0m. This is its fourth contract secured in 2021, bringing its year-to-date contract wins to RM523.5m and its total outstanding order book to RM3.40bn. (The Edge)

AYS Ventures Bhd is disposing of a piece of freehold land and properties in Selangor for RM10.8m measuring 8,809-sqm together with a single-storey opensided detached warehouse and an annexed double-storey office block, to OCH Land Sdn Bhd. The land sale is expected to result in a loss of approximately RM1.2m. (The Edge)

Mi Technovation Bhd’s 2QFY21 net profit increased 43.6% YoY to RM26.1m, underpinned by higher sales thanks to strong demand for semiconductor equipment. Revenue for the quarter grew 89.4% YoY to RM117.3m. (The Edge)

Leon Fuat Bhd is acquiring a piece of leasehold industrial land in Port Klang for RM20.4m to expand its welded steel pipe manufacturing activities. The 27,108- sqm piece of land is located less than 500 metres from the group’s existing welded steel pipe manufacturing plant in Kawasan Perusahaan Bandar Suleiman. (The Edge)

Axiata Group Bhd has proposed the acquisition of a 66.3% stake in PT Link Net Tbk, an internet service and cable television provider in Indonesia. Axiata and its 66.5%-owned Indonesian unit PT XL Axiata Tbk have signed a non-binding term sheet with Indonesia’s PT First Media Tbk and Asia Link Dewa Pte Ltd to initiate negotiations for a potential acquisition of the Link Net stake. (The Edge)

YTL Hospitality REIT’s 4QFY21 net property income (NPI) rose 23.4% YoY to RM54.7m, amid a higher hotel and property rental contribution. Revenue for the quarter increased 30.0% YoY to RM89.4m. A distribution of 2.35 sen per unit for the quarter, payable on 30th August 2021 was declared. (The Edge)

Kein Hing International Bhd’s 4QFY21 net profit stood at RM3.0m vs. a net loss of RM0.1m recorded in the previous corresponding quarter, underpinned by higher revenue from both its Malaysian and Vietnam operations and ongoing cost-savings efforts. Revenue for the quarter added 84.3% YoY to RM66.7m. (The Edge)

Pos Malaysia Bhd has appointed Charles Brewer, who spent 34 years in DHL group, as its new group CEO. Brewer, 56, will be its fourth CEO in five years. (The Edge)

Chin Teck Plantations Bhd’s 3QFY21 net profit jumped 101.3% YoY to RM22.5m, fuelled by amid significant increases in its average selling price fresh fruit bunches, crude palm oil and palm kennel. Revenue for the quarter gained 45.8% YoY to RM49.1m. A special dividend of 11 sen per share, in addition to a second interim dividend of 8.0 sen per share, both payable on 30th August 2021 was declared.

Malakoff Corp Bhd has signed a Memorandum of Understanding with Koperasi Polis Diraja Malaysia Bhd for studying the feasibility of jointly developing rooftop solar projects at selected Royal Malaysia Police (PDRM) building premises. The collaboration is part of the Net Energy Metering 3.0 scheme or for selfconsumption, whereby the electricity generated via solar energy will be supplied to PDRM under a long-term power purchase agreement. (The Edge)

Source: Mplus Research - 2 Aug 2021