Market Review

Malaysia: The FBM KLCI (+0.3%) staged a mild rebound after lingering mostly in the positive territory, lifted by gains in selected telco and banking heavyweights. The lower liners edged marginally higher, while the broader market closed mixed with the technology sector (+1.3%) outperformed.

Global markets: The US stockmarkets staged a strong recovery as the Dow added 0.8%, boosted by a series of solid corporate earnings, while jobless claims continue to fall for the second straight week. European stockmarkets closed mostly upbeat, while Asia stockmarkets ended mixed.

The Day Ahead

Despite regional peers ending mixed, the FBM KLCI rebounded and booked modest gains on the back of bargain hunting activities. We believe the market sentiment should be recovering further with the Finance Minister stating that the hospitalisation rate will be used as a metric to ease curbs for states once they enter the second phase of the national recovery plan, instead of daily confirmed cases; that may boost a little on the recovery theme, in the near term. Commodities wise, the crude oil rebounded and hovers above UD70, while the CPO price retreated after a two-day rebound.

Sector focus: The positive sentiment in Nasdaq may continue to spill over to the local technology stocks. Besides, investors may pay more attention to the recovery theme as the relaxation of SOP for two-dose vaccinated citizens will be unveiled in the near term. We expect transportation & logistics, building materials, construction as well as services industries may observed higher trading interest.

The FBM KLCI registered marginal gains amid bargain hunting activities, but still hovering below the 1,500 level. Technical indicators turned slightly positive with the MACD Histogram turning green, while the RSI is recovering above 30. Bargain hunting activities might push the key index towards the 1,500 level, with the next resistance set at 1,520. Meanwhile, support level is located around 1,480.

Company Brief

MR DIY Group Bhd’s 2QFY21 net profit added 44.1% YoY to RM82.1m, on strong sales momentum. Revenue for the quarter climbed 47.1% YoY to RM759.8m. (The Star)

Comfort Gloves Bhd has reported that its facilities in Taiping, Perak have been placed under the enhanced movement control order (EMCO) effective 6th August 2021 until 19th August 2021. Comfort Rubber Gloves Industries Sdn Bhd (CRGISB) is temporarily halting operations during this period in compliance with the EMCO. The closure of the factories and hostel is to allow employees to undergo mass screening and mandatory quarantine," the glove maker said in a filing today. (The Star)

Pavilion Real Estate Investment Trust’s (REIT) 2QFY21 net property income added 21.9% YoY to RM47.6m, due to savings in property operating expenses. Revenue for the quarter, however, eased 1.3% YoY to RM124.8m. Distributable income per unit for 1HFY21 stood at 1.83 sen, payable on 10th September 2021. (The Star)

AirAsia Group Bhd has received US$56.8m (RM240.0m) in gross proceeds from the merger between Fly Leasing Ltd and Carlyle Aviation Partners. AirAsia held a 10.9% stake in Fly Leasing prior to the merger. The stake was acquired in August 2018 as part of a cash-in-kind consideration for the earlier divestment of AirAsia's aircraft leasing operations undertaken by Asia Aviation Capital Ltd to entities managed by BBAM Limited Partnership. (The Edge)

Omesti Bhd has redesignated Tunku Zain Al-’Abidin Ibni Tuanku Muhriz of the Negeri Sembilan royal family as the group's new chairman, from his previous role as independent non-executive director. The company also has redesignated businessman Datuk Seri Thong Kok Khee as deputy chairman, from non independent non-executive director. (The Edge)

Power Root Bhd has been instructed by the Ministry of Health to halt operations for six days from yesterday at its plant in Johor to conduct sanitisation work to prevent the spread of Covid-19. The factory in Taman Perindustrian Plentong, Masai is expected to resume its operations in stages on 12th August 2021 or earlier, subject to the approval of the relevant authorities. (The Edge)

Bursa Securities has rejected Focus Dynamics Group Bhd's proposed one-to-three share split, in view of the group's low adjusted share price of 1.5 sen. The group, which had 6.15bn issued shares at 29th December 2020, proposed in January 2021 to split each of its shares into three to improve its trading liquidity. (The Edge)

T7 Global Bhd’s 60.0% unit, T7 Kilgour Sdn Bhd has secured multiple purchase orders from overseas manufacturers to provide metal surface treatment services for aerospace parts. T7 Kilgour in July 2021 received the orders from Global Tek Fabrication Co Ltd and C.C.S. Advance Tech Co Ltd in relation to non-destructive testing, anodise, passivate, paint and part mark aerospace parts services. (The Edge)

Stella Holdings Bhd has secured an RM12.8m contract to provide operations and maintenance services at the leachate treatment plant in Taman Beringin, Kepong. The contract, awarded by the National Solid Waste Management Department, is for 6 years effective yesterday. (The Edge)

Mi Technovation Bhd has subscribed for a 45.0m Yuan (RM29.4m) to increase in the capital of Talentek Microelectronics (Hefei) Ltd, as part of its efforts to set its foothold in the semiconductor final test segment in China. The deal will see Mi Technovation, through its wholly-owned unit Suzhou Mi Equipment Co Ltd (Mi Equipment China), becoming a 22.6% shareholder in Talentek for 9.0m Yuan, whereas another 36.0m Yuan will be utilised as capital expenditure and working capital. (The Edge)

Sentral REIT’s 2QFY21 net property income fell 7.8% YoY to RM29.0m, on lower revenues generated from its properties. Revenues for the quarter dropped 4.8% YoY to RM38.2m. A distribution per unit of 3.43sen, payable on 21st September 2021 was declared. (The Edge)

LPI Capital Bhd’s 2QFY21 net profit added 8.4% YoY to RM83.9m, mainly contributed by the increase in the gross earned premiums of its wholly-owned insurance subsidiary Lonpac Insurance Bhd (Lonpac). Revenue for the quarter rose 5.3% YoY to RM420.0m. Afirst interim dividend of 29.0 sen per share, payable on 1st September 2021 was declared. (The Edge)

Source: Mplus Research - 6 Aug 2021