Market Review

Malaysia:. The FBM KLCI (-0.4%) reversed all its previous session gains, dragged down by weakness in selected telco and banking heavyweights and the key index extended its weekly losses by -0.3% WoW. The lower liners extended their marginal gains, while the broader market finished mostly upbeat.

Global markets:. The US stockmarkets marched higher as the Dow added 0.4%, boosted by the robust jobs data as unemployment rate in July 2021 fell to 5.4%; the lowest level since March 2020. European stockmarkets finished on a positive note, while Asia stockmarkets ended mostly negative.

The Day Ahead

In line with the regional downtrend, the FBM KLCI finished the volatile week in a sour note amid selling in selected heavyweights on the key index. Tracking the recovery in the US and the announcement from the Prime Minister over the weekend on SOP relaxations for fully vaccinated citizens will be positive for the market, especially on the recovery theme sectors. Meanwhile, Malaysia’s 2Q21 GDP growth rate which will be released on the coming Friday may draw attention.

Sector focus:. Investors may focus on recovery theme such as the building material, domestic tourism and aviation related stocks as market is looking ahead for the relaxation of SOP for those who are fully vaccinated. Besides, the technology sector should remain resilient amid expectation for their solid earnings.

The FBM KLCI staged a pullback as the key index continued hovering below the daily EMA9 level. Technical indicators turned negative as the MACD Histogram has turned into a red bar, while the RSI hovered below the 50 level. Investors may trade in a cautious mode with focus on the recovery theme sector. Resistance is envisaged around 1,500-1,520, while the support level is located at 1,450-1,480.

Company Brief

Inari Amertron Bhd’s 4QFY21 net profit jumped 149.1% YoY to RM88.4m, driven by growth across all business segments with the radio frequency (RF) business segment continuing to be the key contributor to revenue growth. Revenue for the quarter added 54.8% YoY to RM361.3m. (The Star)

Tiong Nam Logistics Holdings Bhd's unit, Tiong Nam Logistics Solutions Sdn Bhd (TNLS) has signed two sale and purchase agreements with Senai Airport City Sdn Bhd to acquire two plots of vacant land for RM136.4m. The land spanning some 20.2-ha is located within the Free Commercial Zone in Senai Airport City in Johor Bahru, Johor. The land will be used for the construction of a warehouse with a built-up area of about 1.1m sqf with warehouse construction cost is estimated at RM200.02 m. (The Star)

CTOS Digital Bhd has raised its stake in Thailand-based associate firm Business Online Public Company Ltd (BOL) to 22.7%, from 20.0%. CTOS Digital bought an additional 21.7m shares in BOL via a direct business transfer on the Thai stock exchange. (The Star)

South Korea's SK Group will invest up to US$100.0m in the financial technology unit of AirAsia Group Bhd, the Malaysian budget carrier. BigPay, a unit of AirAsia's digital arm, offers a prepaid debit card, local and international money transfers, micro-insurance, bill payments and a budgeting tool. BigPay has also applied for a digital banking licence in Malaysia as part of a consortium with Malaysian Industrial Development Finance Berhad and private equity firm Ikhlas Capital. (The Star)

MyEG Services Bhd will be introducing decentralised finance (DeFi) products in Malaysia to provide cryptocurrency services to users of digital asset exchanges which are licensed as recognised market operators locally and abroad. The service will enable holders of cryptocurrency to enter into smart contracts for the purposes of borrowing cryptocurrency or lending against their cryptocurrency assets. (The Edge)

Sabah UMNO Youth chief Abdul Aziz Julkarnain has resigned as an independent and non-executive director of Boustead Plantations Bhd. Abdul Aziz, 43, has quit to pursue other interests, marking less than one year's service since his appointment on 1st September 2020. (The Edge)

Cahya Mata Sarawak Bhd’s (CMS) non-independent and non-executive director Datuk Isaac Lugun is retiring effective 7th August 2021. (The Edge)

The Malaysian Arbitral Tribunal has dismissed Kebabangan Petroleum Operating Co Sdn Bhd's (KPOC) claim against Malaysia Marine and Heavy Engineering Holdings Bhd (MHB) for alleged loss of revenue totalling RM28.0m. However, in its final award, the Arbitral Tribunal ordered MHB to pay KPOC a higher sum of RM28.0m as damages for the cost expenses incurred by KPOC and for the latter's legal fees and expenses. (The Edge)

Scanwolf Corp Bhd has reported that its rights issue of Irredeemable Convertible Unsecured Loan Stocks (ICULS) with warrants at 10 sen per rights share was oversubscribed by 101.9% and has raised RM10.5m. The ICULS and warrants are expected to be listed and quoted on the Main Market of Bursa Securities on 9th August 2021. (The Edge)

Source: Mplus Research - 9 Aug 2021