Heads turned to the US Fed

Market Review

Malaysia:. The FBM KLCI (-0.9%) sank and closed at its lowest level year-to-date with more than two-thirds of the key index components finished lower, taking cue from the weakness on Wall Street overnight. The lower liners retreated, while all the 13 major sectors on the broader market were splashed in red.

Global markets:. Wall Street remained downbeat as the Dow (-0.3%) extended its losses, dragged down by the selling pressure in technology shares ahead of the US Federal Reserve monetary policy meeting. European stock markets extended their decline, while Asia stock markets finished mostly negative.

The Day Ahead

The FBM KLCI slipped from Monday’s rebound, in tandem with the global stock markets performances. We believe the local market will remain tepid as investors may stay cautious ahead of the FOMC meeting, where market players might be anticipating tighter monetary policy going forward as well as concerns over the Covid-19 Omicron variant in the UK. Also, investors are likely to remain cautious amid inflationary pressure and take a pause ahead of the Sarawak state election. On the commodity markets, both the CPO and crude oil price staged a pullback, while the steel price is on its uptrend move.

Sector focus:. The stabilising steel price may benefit the building material companies but this might hit construction players. Besides, investors may look out for blue chips this month in the anticipation of window dressing activities.

FBMKLCI Technical Outlook

The FBM KLCI struggled as the key index slipped further from the 1,485 support level. Technical indicators remained mixed as the MACD Histogram has extended a positive bar, while the RSI hovered below the 50 level. The next support level is located at 1,450, while the next resistance is pegged along 1,485-1,500.

Company Brief

Sime Darby Motors (SDM) Malaysia, a subsidiary of Sime Darby Bhd and Tenaga Nasional Bhd (TNB) have formalised a memorandum of understanding to explore various initiatives to accelerate the adoption of electric vehicles (EV) in Malaysia. The parties also aim to look into other energy-efficient and renewable energy initiatives to optimise the cost of EV charging infrastructure and to reduce carbon emissions. (The Star)

Malaysia Airports Holdings Bhd (MAHB) is calling for an open tender exercise for 226 commercial lots following the recent improvement in air traffic movements as a result of the easing of air travel restrictions. Their airports nationwide have a total of 808 commercial outlets currently, whereby about 70.0% have been tendered out previously and a majority of this had been awarded. (The Star)

ATA IMS Bhd has asked for charges that it violated labour laws to be dropped, outlining that any infractions were caused by challenges presented during the Covid-19 pandemic. ATA was charged with four violations of laws relating to minimum standards for worker accommodation. (The Edge)

KPower Bhd’s group managing director and CEO Datuk Dr Mohd Abdul Karim Abdullah has resigned as its non-independent non-executive chairman. The resignation is effective immediately and following his resignation, Mustakim Mat Nun, the group’s deputy chairman, will assume the chairman’s position temporarily. (The Edge)

Careplus Group Bhd has announced that the Securities Commission Malaysia has approved of its proposed transfer from Bursa Malaysia's ACE Market to the Main Market. (The Edge)

Hong Seng Consolidated Bhd has announced the resignation of Datuk Seri Dr Chen Chaw Min as its independent non-executive chairman, just over six months since his appointment. The retired government officer resigned to concentrate on his other careers. (The Edge)

Sapura Energy Bhd’s CEO Datuk Mohd Anuar Taib has reported that the group's asset divestment strategy is progressing well and is confident that the group will benefit from the exercise. Anuar, however, did not elaborate further on the details of the asset divestment strategy. (The Edge)

Dataprep Holdings Bhd collaborative partner Asia Coding Centre Sdn Bhd has received notification from the Ministry of Health to commence a trial run and deployment of Covid-19 screening RT-PCR molecular testing at the ministry’s existing sites. The operations of the Covid-19 screening will be performed jointly under its subsidiary Dataprep Asia Sdn Bhd. (The Edge)

Bintai Kinden Corp Bhd has inked a deal to explore and pursue an engineering, procurement, construction and commissioning contract for the power import project by Malaysia LNG Sdn Bhd in Sarawak. Kejuruteraan Bintai Kindenko Sdn Bhd is teaming up with Kejuruteraan Gemilang Jaya Sdn Bhd to jointly explore and pursue the EPCC contract. (The Edge)

Poh Kong Holdings Bhd’s 1QFY22 net profit dropped 63.0% YoY to RM5.4m, on lower revenue due the lockdown. Revenue for the quarter fell 21.0% YoY to RM175.3m. (The Edge)

Ireka Corp Bhd has secured an affordable and mixed housing development of 9.8- ha. on government land in Terengganu, with the provisional sum of the project amounting to RM58.3m. Its subsidiary Ireka Development (Terengganu) Sdn Bhd has accepted a letter of award by Koperasi Permodalan Sahabat Terengganu Bhd to develop the project in Kampung Baru Kuala Abang in Dungun district. (The Edge)

Source: Mplus Research - 15 Dec 2021