Market Review

Malaysia:. The FBM KLCI (+0.5%) rebounded after lingering in the positive zone for the entire trading session, taking cue from the SOP relaxations for fully vaccinated individuals in several states. The lower liners continue to eke out marginal gains, while the broader market finished mostly higher.

Global markets:. The US stockmarkets endured a choppy trading session before closing mostly higher as the Dow and S&P 500 added 0.5% and 0.1% respectively as gains were limited owing to the decline in technology shares. European stockmarkets finished higher, while Asia stockmarkets ended mostly upbeat.

The Day Ahead

The FBM KLCI and broader market turned higher on Monday mainly boosted by gains in consumer-related and transportation & logistics sectors after the announcement on SOP relaxation for fully vaccinated individuals, as well as better than expected Malaysia’s Industrial Production Index (IPI) which rose 1.4% YoY in June. Despite an upward trending mode on Wall Street, the current Covid-19 and political developments in Malaysia may continue to supress buying interest on the local bourse. Meanwhile, CPO price eased as investors stayed on sidelines while awaiting for the August export data from the MPOB today, while the crude oil price climbed to close above the USD70 per barrel.

Sector focus:. Investors may remain upbeat on the recovery theme sectors such as consumers and building materials stocks as higher vaccination rates and gradual economic reopening are in focus. Besides, the technology sector is still under the limelight amid positive expectations for the August earnings season.

The FBM KLCI booked marginal gains prior to the public holiday with lower trading volume. Technical indicators turned mixed as the MACD Histogram has turned into a green bar, while the RSI hovered below the 50 level. The key index may continue to trade in a consolidation mode with resistance envisaged around 1,500-1,520, and the support level located at 1,450-1,480.

Company Brief

Majuperak Holdings Bhd has launched its SilverVax vaccination programme in Perak with 200,000 Covid-19 vaccine doses expected to be made available to targeted groups, namely the private sector and state government-linked companies (GLCs). Majuperak started its SilverVax vaccination programme on 2nd August 2021 and it received positive response as at to-date with about 300 private companies across the state having registered to procure and provide vaccines for their workforce and family members since applications were opened on 23rd July 2021. Majuperak was recently appointed by Pharmaniaga Bhd for the supply of the Sinovac Covid-19 vaccine in Perak. (The Star)

Dagang NeXchange Bhd's (DNeX) subsidiary PING Petroleum UK Ltd (PING UK) is acquiring the remaining 50.0% stake in the UK offshore Avalon Oilfield from Sumitomo for US$17.0m (RM71.7m) under a deal said to stem from the seller's intention to shift away from the fossil fuel business and the buyer's decision to avoid any potential conflicts which may arise should the 50.0% stake be sold to a third party. Meanwhile, DNeX unit, Innovation Associates Consulting Sdn Bhd has bagged a 45-month contract worth RM88.0m from the Ministry of Finance to maintain the Integrated Government Financial and Management System. (The Edge)

Uzma Bhd's unit Uzma Engineering Sdn Bhd has secured a RM29.0m work order from Petronas Carigali Sdn Bhd for the provision of a risk transfer incentive contract for idle well reactivations and production enhancement services. The three-year contract took effect on 13th July 2021 and will end on 14th July 2024. (The Edge)

Rentas Health Sdn Bhd, in which Pecca Group Bhd has proposed to acquire a 51.0% stake, has secured a RM25.2m contract to supply Covid-19 polymerase chain reaction (PCR) test kits to the Ministry of Health. Its South Koreanmanufactured PCR test kits will be used in 21 government hospitals nationwide, including Hospital Kuala Lumpur, Hospital Sungai Buloh and the Sarawak Heart Centre. The test kit venture is being undertaken in partnership with LG International Corp, with Rentas appointed the sole distributor in Malaysia. (The Edge)

Source: Mplus Research - 11 Aug 2021