Market Review

Malaysia:.. The FBM KLCI (-0.1%) started off the week on a dour tone as the key index recorded its third day losing streak, dragged down by weakness in selected banking and gloves heavyweights. The lower liners finished mostly lower, while the technology sector (+2.8%) outperformed the mostly negative broader market.

Global markets:.. The US stockmarkets reverse their intraday gains to close mostly lower as the Dow fell 0.3% as the ISM Manufacturing PMI in July 2021 eased to 59.5; below consensus expectations of 60.9 amid supply chain constraints. European stockmarkets rebounded, while Asia stockmarkets ended mostly higher. The Day Ahead Bucking the regional uptrend, the FBM KLCI marked the third consecutive session of declines as investors again pulled back from the market amid continuing Covid- 19 woes and recent political developments. Investors are likely to be more cautious in selecting stocks given the heightened political uncertainties, but there might be some buying interest in companies with bright outlook amid the upcoming corporate earnings season. Commodities wise, both the CPO and crude oil prices declined.

Sector focus:.. As selected technology stocks have release stellar results recently, they may continue with their uptrend move respectively and could spillover to the rest of the technology sector including EMS players. Besides, building material segment may see improve trading interest after China lifted the export tariff last week.

The FBM KLCI pulled back further from the 1,500 level. Technical indicators remained negative as the MACD Histogram has extended another red bar, while the RSI hovered below the 50 level. Investors are likely to trade in a cautious mode, with the next support level set at 1,480, followed by 1,450, while the resistance is located at 1,500

Company Brief

Pecca Group Bhd is buying a majority stake in a supplier of face mask and Covid- 19 test kits for RM100.0m. The purchase of a 51.0% stake in Rentas Health Sdn Bhd from Teoh Zi Yuen, who is an executive director at Pecca, will be satisfied by RM50.0m cash and the issuance of RM50.0m worth of new Pecca shares. The 11.2m new Pecca shares will be issued at RM4.17 each. Rentas has provided a profit guarantee of no less than RM23.0m for FY22. (The Star)

Nestcon Bhd has secured a RM25.0m sub-contract for construction of access road to Sungai Pulai Bridge under the proposed Petrochemical & Marine Industry Centre development at Tanjung Bin, Pontian, Johor. The sub-contract was awarded by MMC Engineering Group Bhd. Nestcon has started work at the site on 2nd August 2021 and the sub-contract works are expected to be completed by 31st May 2022. (The Star)

Malayan Banking Bhd’s subsidiary Maybank Singapore Ltd has filed a suit against National Feedlot Corp Sdn Bhd (NFC) chairman Datuk Seri Dr Mohamad Salleh Ismail and his two children for defaulting on two housing loan facilities for properties in Singapore. Mohamad Salleh is the husband of former women, family and community development minister Tan Sri Shahrizat Abdul Jalil. (The Edge)

A consortium comprising Revenue Group Bhd, Sarawak State and Kenanga Investment Bank Bhd has submitted its application for a digital banking licence from Bank Negara Malaysia. SSG Digital Resources Bhd, a special purpose vehicle for the consortium, had submitted the application on 29th June 2021. (The Edge)

Freight Management Holdings Bhd is buying two pieces of vacant industrial land in Klang for RM56.8m or RM140/sqf. The freehold land, measuring a combined 405,979 sqf or 4.7-ac will be used for the expansion of its third-party logistics warehousing and distribution services, which include e-commerce fulfilment and parcel delivery services. (The Edge)

Cahya Mata Sarawak Bhd (CMS) has further extended the suspension of its group chief financial officer Syed Hizam Alsagoff until 31st August 2021, to accommodate the additional timeline required by independent consultant KPMG Management & Risk Consulting Sdn Bhd to carry out its work and report to the board. The results of the review are expected to be announced by the end-August 2021. (The Edge)

Dolphin International Bhd plans to raise about RM24.2m through a private placement; equivalent to 34.6% of its market capitalisation of RM70.0m to fund its food and beverage business, to repay borrowings and for the group's working capital. (The Edge)

Salutica Bhd plans to raise up to RM19.4m via a placement of 38.8m shares. The amount is equivalent to 10.0% of its issued share capital which is mainly to fund the expansion of the group's product range. (The Edge)

Ivory Properties Group Bhd has teamed up with ECK Development Sdn Bhd to jointly develop residential components at AirportCity and Aerotropolis in Kedah. It has entered into a binding term sheet with ECK for the venture, on a land measuring 135.0-ac. (The Edge)

Source: Mplus Research - 3 Aug 2021