Seeking for rebound

Market Review

Malaysia:. The FBM KLCI (-1.2%) trended lower and slipped below the 1,500 level again with more than two thirds of the key index components ended in the red. The lower liners extended their slide, while all 13 major sectors on the broader market finished in the red with the healthcare sector (-3.0%) taking the biggest hit.

Global markets:. US stockmarkets rebounded as the Dow (+1.9%) recovered all its previous session losses as concern over the Covid-19 Omicron variant eased on reports that South Africa hospitals have yet to be overwhelmed. European stockmarkets also advanced, but Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI surrendered gains from the previous session as sentiment remained weak, in line with negative performances on the regional bourses. However, Wall Street has rebounded strongly overnight with the view that the Covid-19 Omicron variant may cause milder illness than earlier strains; this may provide buying support to the local equities. Closer to home, we should expect some rebound on the key index as investors may be repositioning into value stocks or heavyweights moving into the year-end window dressing period. On commodity markets, crude oil prices settled 4.6% higher at USD73 per barrel after Saudi Arabia raised prices for its crude sold to Asia and the US, while the CPO price saw slight rebound.

Sector focus:. Moving towards year end, we believe investors may focus on value stocks and KLCI heavyweights with the idea of window dressing activities. Besides, the firmer crude oil price may support the energy stocks at least for the near term.

FBMKLCI Technical Outlook

The FBM KLCI retreated to close at intraday low as the key index fell below the key 1,500 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI is oversold below 30. The next support level is located at 1,480, while the resistance is pegged along 1,500-1,520.

Company Brief

Kerjaya Prospek Property Bhd's unit Pixel Valley Sdn Bhd has entered into a purchase and development agreement with Aspen Vision City Sdn Bhd to acquire a tract of freehold land measuring about 2.0-ha in Seberang Perai Selatan in Pulau Pinang for RM27.6m. The property will serve as landbank for Pixel Valley's proposed for a mixed-use development comprising serviced apartments and some commercial and retail lots. The proposed acquisition of the land is expected to be completed by July 2022. (The Star)

VSTECS Bhd's unit has been appointed the official distributor of automation vendor Puppet Inc as it aims to capitalise on the growing need for compliance across all sectors. Puppet is the industry standard for IT automation and helps enterprises modernise and manage their infrastructure with the solutions to automate anywhere, reliably scale, and integrate compliance and security across hybrid infrastructure. (The Star)

Mah Sing Group Bhd's healthcare business unit Mah Sing Healthcare Sdn Bhd has received approval from the US Food and Drug Administration (FDA) to market nitrile examination gloves in the US market. (The Edge)

Yinson Holdings Bhd will issue RM1.00bn worth of five-year Islamic medium-term notes on Tuesday, which will pay an annual profit rate of 5.6% under the oil and gas support services provider's Wakalah Islamic bond scheme. The issuance will be used for shariah-compliant purposes including Yinson's working capital and refinancing of the company's existing borrowings. (The Edge)

Jade Marvel Group Bhd has inked an agreement with YHL Foods Sdn Bhd (YHLF) and YHL Jadem Frozen Sdn Bhd (YHLJF) to provide services linked to frozen seafood processing and cold storage facilities, as well as sales. Under the agreement, Jade Marvel will hold 60.0% of YHLJF, while YHLF shall hold 40.0% of YHLJF shares. (The Edge)

Dagang NeXchange Bhd (DNeX) has appointed Muhammad Radhi Azizan and Tun Noor Shahya Tun Abdul Razak to its board of directors. Muhammad Radhi will serve as non-independent non-executive director, while Tun Noor Shahya will serve as independent non-executive director. (The Edge)

Ireka Corp Bhd is disposing of its remaining 31.4% stake in Mobilus Sdn Bhd to Hungary-based Greenway Urban Traffic (Europe) Co Ltd (GUTE) for RM1.8m. The group had earlier on 30th November 2021 announced the sale of 19.6% of its then 51.0% stake in Mobilus to related party Eccaz Sdn Bhd. (The Edge)

Bintai Kinden Corp Bhd has proposed to undertake a private placement of up to 20.0% of its existing issued shares to raise RM35.0m, mainly to repay borrowings. The placement will involve the issuance of up to 111.0m Bintai Kinden shares, to be placed out to independent third party investors to be identified later at an issue price to be determined later. (The Edge)

T7 Global Bhd has secured three letters of appointment and awards worth a combined value of RM300.0m under its energy division for the operations and maintenance segment and specialist products segment. The contracts were awarded by Petronas, Carigali Hess Operating Company Sdn Bhd and Repsol Oil & Gas Malaysia Ltd. (The Edge)

KNM Group Bhd has been granted Practice Note 17 (PN17) relief measures in relation to the issuance of Thai bonds, resulting in the company triggering suspended criteria and will not be classified as PN17 affected listed issuer. On 3rd December 2021, KNM triggered an event of default on the principal payment of the bonds issued in Thailand amounting to 2.78bn baht (RM351.4m) which had matured on 18th November 2021. (The Edge)

Kelington Group Bhd’s wholly-owned subsidiary Kelington Engineering (S) Pte Ltd had has received an estimated RM85.0m contract from a customer who is a global leader in engineering and project management of high-technology facilities. Kelington Group however did not specify the names of the customer and the world leader in innovative memory solutions. (The Edge)

Source: Mplus Research - 7 Dec 2021