Market Review

Malaysia: The FBM KLCI (+0.5%) snapped a three-day losing streak to claw its way back above 1,500 level, lifted by bargain hunting activities in selected banking and plantation heavyweights. The lower liners ended mixed, while the broader market finished mostly higher, anchored by the plantation sector (+1.3%).

Global markets: The US stockmarkets staged a strong rebound as the Dow and S&P 500 added 0.8% each, boosted by the recent batch of robust corporate earnings from Ralph Lauren, Gartner and Under Armour. European stockmarkets finished mostly higher, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI snapped a three-day losing streak to close in the positive territory, bucking the regional downtrend. However, sentiment may remain cautious amid heightened uncertainties surrounding the recent political developments. Meanwhile, the move of three more states into Phase Three of the National Recovery Plan starting from today, coupled with the earning season may lift market sentiment. Commodities wise, crude oil price declined amid the spread of the delta virus variant which may pose a risk to oil demand.

Sector focus: Given the strong result from DUFU, coupled with the overnight gains in Nasdaq, the buying interest should emerge within the technology counters for this session. Besides, we expect the rebound in solar and plastic manufacturing sectors may persist over the near term.

The FBM KLCI climbed back above the 1,500 level after bargain hunting activities emerged in the final trading hour. Technical indicators turned slightly positive as the MACD Histogram has turned green, while the RSI rebounded above 30 level. However, investors may continue to trade in a cautious mode, with support set at 1,480, while the resistance is located at 1,520 if the key index stays above 1,500.

Company Brief

Hartalega Holdings Bhd's 1QFY22 net profit leapt 928.3% YoY to RM2.26bn, due to higher sales volume as well as an increase in average selling price (ASP). Revenue for the current quarter surged 324.2% YoY to RM3.90bn. (The Star)

Dufu Technology Bhd’s 2QFY21 net profit grew 60.9% YoY to RM15.9m, boosted by strong volume loading by its customers. Revenue for the quarter improved 20.2% YoY to RM88.2m. A first interim dividend of 3.75 sen per share, payable on 24th September 2021 was declared. (The Star)

HB Global Ltd recently-acquired telecommunication unit, Forward Resources and Construction Sdn Bhd has secured a contract from Axiata Group Bhd’s subsidiary to provide full turnkey fibre implementation work. The RM10.0m contract was awarded by wireless telecommunications services provider On Site Services Sdn Bhd. (The Edge)

HPP Holdings Bhd is temporarily ceasing operations for two weeks from yesterday until 17th August 2021 to carry out deep sanitisation and disinfection work at its factories and office, after detecting eight Covid-19 cases among its factory employees. The Covid-19 cases were found at four of its manufacturing facilities located at Taman Teknologi Cheng in Melaka. (The Edge)

Kanger International Bhd is confident of returning to the black in FY22, driven by the group’s new construction division, as it has secured projects with total order book of RM1.00bn. The group will expand its construction business by undertaking building construction, civil engineering and project management contracts as a main contractor or sub-contractor, moving forward. (The Edge)

Berjaya Land Bhd (BLand) has disposed of an aggregate of 6.7m shares, representing a 1.9% stake in Berjaya Food Bhd (BFood), between 15th June 2021 and 30th July 2021. The disposals were carried out via direct business transactions for RM12.6m at an average price of RM1.87 per share. Post disposals, BLand now holds a total of 4.9m BFood shares, representing a stake of 1.4%. (The Edge)

Source: Mplus Research - 4 Aug 2021