Gains capping at 1,500

Market Review

Malaysia:. The FBM KLCI (+0.4%) rebounded towards the 1,500 level after hovering largely in the positive territory as the positive sentiment were in tandem with regional peers. The lower liners also rebounded, while the broader market closed mostly positive, led by the transportation & logistics sector (+1.3%).

Global markets:. Wall Street endured another volatile session as the Dow (-0.9%) retreated, dragged by selloff in technology shares on concern over lofty valuations. European stock markets erased all their intraday gains to close lower, while Asia stock markets ended mixed.

The Day Ahead

The FBM KLCI outperformed the mixed regional markets as the key index inched higher, mirroring the positive performance on Wall Street overnight. While the market players may focus on the window dressing activities in the near future, investors are likely to remain cautious ahead of the interest rate decision and monetary policies outcome from the US Federal Reserve, Bank of England, European Central Bank and Bank of Japan which is scheduled to be released this week. Meanwhile, the CPO prices stayed above RM4,700, while the crude oil hovered above the USD74 per barrel mark.

Sector focus:. Tracking the negative sentiment on Wall Street, profit taking activities may emerge on the local front. However, we believe market players may continue to scoop up technology stocks given the sturdy earnings visibility going forward. Besides, traders may focus on recovery theme sector such as consumer as the R-naught of the Covid-19 cases in Malaysia is gradually declining.

FBMKLCI Technical Outlook

The FBM KLCI finished on a positive note, but remains below the 1,500 significant psychological level. Technical indicators remained mixed as the Histogram is in the positive region, while the RSI is hovering below the 50 level. Support is located around 1,485, while the resistance is envisaged along 1,520-1,535.

Company Brief

Ramssol Group Bhd’s wholly-owned subsidiary, RAMS Solutions Sdn Bhd (RAMS) has entered into a two-year agreement with ELMU V Sdn Bhd to exclusively market training courses conducted by ELMU Education Group Sdn Bhd (EEG) and the Malaysia Anti-Corruption Academy (MACA). RAMS will pay RM1.5m to ELMU V, which is a subsidiary of EEG, for the marketing rights for the courses on Legal Framework, Corporate Liability, Corruption Risk Management and Organisational Anti-Corruption Plan Course. (The Star)

Straits Energy Resources Bhd's 70.0%-owned subsidiary Tumpuan Megah Development Sdn Bhd has signed a call-off contract with PetroVietnam Technical Services Corporation for the supply of diesel for PM3-CAA field. The proposed contract with no specific value assigned as the supply of diesel will on a call basis is for the period from 6th December 2021 to 4th June 2025. (The Star)

Serba Dinamik Holdings Bhd has yet to receive any notice of default in response to its outstanding US$222.0m sukuk. This was responding to a query from Bursa Securities that Serba Dinamik's subsidiary had defaulted on the US$7.0m (RM29.5m) semi-annual coupon payment on the outstanding senior Islamic bond. (The Edge)

Sapura Energy Bhd’s 3QFY22 net loss stood at RM669.3m vs. a net profit of RM17.2m recorded in the previous corresponding quarterm as three of four of its business segments reported losses, while its only profitable segment saw earnings halved. Revenue for the quarter, however, grew 9.8% YoY to RM1.46bn. (The Edge)

Bermaz Auto Bhd (BAuto)’s 2QFY22 net profit grew 5.0% YoY to RM26.0m, on better management in operational costs. Revenue for the quarter, however, declined 19.3% YoY to RM483.8m. A second interim dividend of 1.5 sen per share, payable on 4th February 2022 was declared. (The Edge)

Evergreen Fibreboard Bhd has reported that a fire broke out at its wholly-owned subsidiary's wood fibre storage bin in Segamat, Johor on 11th December 2021, which killed two people. The cause of the 7.00am is still being investigated by the Fire and Rescue Department’s forensic unit. (The Edge)

Petronas Dagangan Bhd (PDB) has signed a heads of agreement with Petroleum Sarawak Bhd (PETROS) to mark the strategic partnership between the two parties in the liquefied petroleum gas (LPG) business in Sarawak. The partnership includes the divestment of PDB’s LPG business in Sarawak to PetrosNiaga Sdn Bhd (PNiaga), a fully-owned subsidiary of PETROS, and a subscription of shares in PNiaga by PDB. (The Edge)

Pertama Digital Bhd has inked a memorandum of understanding with CGS-CIMB Securities Sdn Bhd to develop and bring to market, digital financial services that empower investors in post-pandemic Malaysia. Pertama Digital and CGS-CIMB will combine their respective strengths to create dependable products with a hyper focus on the needs of retail customers, in support of the Capital Market Masterplan 3, launched by the Securities Commission on 21st September 2021. (The Edge)

Source: Mplus Research - 14 Dec 2021