Market Review

Malaysia: The FBM KLCI (-0.6%) failed to build onto its previous session gains, dragged down by political uncertainties, coupled with the rising Covid-19 cases. The lower liners ended downbeat, albeit recovering from their intraday lows, while the utilities sector (+0.2%) outperformed the negative broader market.

Global markets: The US stockmarkets retreated as the Dow slipped 0.9% after the ADP employment change data only added 330,000 jobs in July 2021; the weakest since February 2021. European stockmarkets extended their gains, while Asia stockmarkets ended mostly upbeat.

The Day Ahead

The FBM KLCI reversed previous session’s gains to close in the negative territory as investors recoiled following the record high Covid-19 daily confirmed cases and the ongoing political noises in the country. The local bourse witnessed outflow of foreign funds for nine continuous trading sessions on the back of the overall negative market stance. Nevertheless, the Prime Minister’s announcement on the resumption of Parliament sitting next month as well as the increasing vaccination rate could reduce the uncertainties in the market.

Sector focus: The utilities sector, being viewed as steady and defensive may continue to take the spotlight amid the overall negative market sentiment. Besides, the technology sector may trend higher, tracking the overnight gains in Nasdaq.

The FBM KLCI surrendered its gains in the previous session, falling below the critical 1,500 level. Technical indicators remained negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level. As the 1,500 level gave ways, investors may watch for the next support level at 1,480, while the resistance is located at 1,500.

Company Brief

Serba Dinamik Holdings Bhd has announced that Nexia SSY PLT has been appointed as its new external auditors after receiving professional clearance from KPMG PLT in accordance to Section 320 By-Law of the Malaysia Institute of Accountants. KPMG has resigned as Serba Dinamik's external auditor on 24th June 2021 after Serba Dinamik filed a court action against KPMG. (The Star)

Fraser & Neave Bhd’s 3QFY21 net profit improved 2.4% YoY to RM96.2m on higher sales. Revenue for the quarter grew 15.0% YoY to RM1.06bn. (The Star)

Impiana Hotels Bhd’s wholly-own subsidiary, Impiana Hotels & Resorts Management Sdn Bhd (IHRM) has secured a five-year contract to manage the Petronas Leadership Centre in Bangi, Selangor. The contract was awarded by the Petronas Management Training Sdn Bhd (PMTSB), a wholly-owned subsidiary of national oil and gas company Petroliam Nasional Bhd. The contract, which commenced on 1st August 2021, is expected to allow Petronas to bring a premium hospitality experience into the centre’s learning facilities which are catered for its approximately 50,000 global employees. (The Star)

Dagang NeXchange Bhd through its recently acquired business unit SilTerra Malaysia Sdn Bhd, has entered into a long-term multi-year wafer supply and purchase agreement with ChipOne Technology (Beijing) Co Ltd worth over USD400.0m (RM1.69bn). SilTerra will supply wafers which are used in the production of semiconductor devices to ChipOne. (The Edge)

Solarvest Holdings Bhd’s subsidiary Atlantic Blue Sdn Bhd has secured an RM66.0m contract from Grooveland Sdn Bhd as the main engineering, procurement, construction and commissioning contractor for the development of a large-scale solar photovoltaic plant in Perak. (The Edge)

Lay Hong Bhd has cautioned that record high prices of poultry feed ingredients soybean meal and corn may affect the chicken product and egg producer’s profitability in the coming years. It is also exposed to foreign exchange risk as it transacts corn and soybean in USD, while 15.0% of the company’s sales are done in SGD. (The Edge)

Asia Media Group Bhd’s external auditor CAS Malaysia PLT was unable to express an opinion on the group’s financial statements for the financial period ended 31st March 2021 due to insufficient audit evidence. Its auditor highlighted that there are material uncertainties that may cast significant doubt on the group's ability to continue as a going concern. (The Edge)

Ge-Shen Corp Bhd’s wholly-owned subsidiary Polyplas Sdn Bhd has received an official notice from the Ministry of Health to stop its operations for a few days beginning yesterday to sanitise its premises as part of Covid-19 prevention measures. The temporary closure is expected to delay deliveries for several orders. (The Edge)

Source: Mplus Research - 5 Aug 2021