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Mplus Market Pulse - 13 Aug 2021

Publish date: Fri, 13 Aug 2021, 09:06 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Market Review

Malaysia:. The FBM KLCI (-0.3%) was traded in a choppy manner, owing to the lingering political uncertainty, coupled with the rising Covid-19 cases. The lower liners were also downbeat, while the energy sector (+0.4%) was the sole outperformer in the negative broader market.

Global markets:. The US stockmarkets inched higher after recovering from their intraday losses as the Dow added 0.04%, lifted by gains in healthcare and technology stocks. European stockmarkets closed mostly higher, while Asia stockmarkets ended mostly downbeat.

The Day Ahead

The FBM KLCI retreated on the back of rising Covid-19 cases and investors continue to the recent political developments. Meanwhile, investors are eyeing on the 2Q2021 GDP data which will be released today. Commodities wise, both the CPO and crude oil prices saw a decline, while the metal commodities rose amid booming demand on the global front, coupled with the fresh logistics disruptions in China due to the partial shutdown of the world’s third-busiest container port due to Covid-19 infection.

Sector focus:. Taking cues from the overnight performance on Nasdaq, we believe there might be bargain hunting activities emerging in the technology sector. Besides, with the rising metal prices, investors are likely to focus on building material sectors, especially in the aluminium companies today.

The FBM KLCI drifted lower but managed to hold above the key 1,500 level, still closing above the daily EMA 9 level. Technical indicators remained mixed as the MACD Histogram has extended a green bar, while the RSI hovered below the 50 level. Investors may continue to monitor the 1,500 level, with next resistance envisaged at 1,520, while the support is set around 1,480-1,500.

Company Brief

IJM Corp Bhd's unit IJM Construction Sdn Bhd has secured a RM258.0m contract from China Communications Construction (ECRL) Sdn Bhd for the East Coast Rail Link project in Temerloh, Pahang. IJM Construction’s scope of work under the contract includes the construction of substructure works and partial superstructure works for the Sungai Pahang bridge, as well as T-Beam fabrication and installation of this bridge as well as other bridges in Section 6 of the rail link. Construction work on the project is scheduled to start end-August 2021 and is due for completion in 24 months from the commencement date. (The Star)

Pos Malaysia Bhd will terminate the outsourced Pos Riders agents’ contract, affecting 262 agents, in the Klang Valley with effect on 1st September 2021 as volumes have continued to fall significantly. This was under phase two of the rationalisation of the Pos Rider outsourced programme which was created in 2019. (The Star)

Ge-Shan Corp Bhd’s 2QFY21 net profit surged 652.0% YoY to RM3.7m, on increased orders from clients. Revenue for the quarter jumped 114.8% YoY to RM65.5m. (The Star)

Pharmaniaga Bhd has secured a Letter of Acceptance (LoA) from the Ministry of Health to supply an additional 6.0m doses of the Sinovac Covid-19 vaccine. The LoA requires the group to start supplying the vaccines immediately and complete by the end-August 2021. (The Edge)

Genting Malaysia Bhd's (GenM) outdoor theme park Genting SkyWorlds is said to be in its final stage of development. GenM, however, did not disclose a specific date of the park's opening. (The Edge)

Datuk Dr Teo Tong Kooi has resigned as Rubberex Corporation (M) Bhd chairman effective yesterday to pursue personal interests. The glove manufacturer announced the appointment of YKGI Holdings Bhd chairman Chong Jee Min @ Liew Jee Min as its new chairman. (The Edge)

RCE Capital Bhd’s 1QFY22 net profit gained 55.0% YoY to RM35.4m, on the back of higher early settlement, net fee income, as well as lower allowances for impairment loss on receivables. Revenue for the quarter rose 20.6% YoY to RM78.0m. (The Edge)

Ta Ann Holdings Bhd is optimistic of an improved performance from its timber segment for 2021. This is mainly due to a shortage of raw materials and increase in housing demand in Australia, the US and other timber-consuming countries. (The Edge)

Ornapaper Bhd has announced the temporary closure of the packaging manufacturer’s factory within Melaka’s Batu Berendam Industrial Area from 6th August 2021 to 20th August 2021 after 11 employees of the company’s whollyowned subsidiary Quantum Rhythm Sdn Bhd tested positive for Covid-19. (The Edge)

Fintec Global Bhd has proposed a private placement to raise up to RM19.2 m for the construction of a factory for its glove business. The placement will involve the issuance of up to 855.0m shares, representing 20.0% of the total number of issued shares. (The Edge)

Apollo Food Holdings Bhd has announced the temporary manufacturing stoppage of a Johor Bahru manufacturing facility, as a measure to prevent the spread of Covid-19. The affected manufacturing facility, run by wholly-owned subsidiary Apollo Food Industries (M) Sdn Bhd, was ordered by the Ministry of Health yesterday to stop its operations for seven days until 17th August 2021 and disinfect its premises. (The Edge)

Jade Marvel Group Bhd has entered into a Memorandum of Understanding with Tenaga Era Baru Sdn Bhd for the establishment of a collaboration between the parties in securing development or construction projects such as land reclamation. The two companies aim to work together to tender and undertake the projects which have been mutually agreed by the parties. (The Edge)

Tri-Mode System (M) Bhd is acquiring a parcel of land measuring 234,432 sqf for RM15.9m from Central Spectrum (M) Sdn Bhd to expand its warehouse in Pulau Indah Industrial Park. (The Edge)

Source: Mplus Research - 13 Aug 2021

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