Breaking above 1,500

Market Review

Malaysia:. The FBM KLCI (+1.2%) was lifted sharply higher in the final trading hour to close above the 1,500 level and the key index snapped an 8-week losing streak. The lower liners, however, ended mixed, while the broader market finished mostly positive with the healthcare sector (+2.5%) taking the lead.

Global markets:. Wall Street extended its losses as the Dow (-1.5%) fell on the back of concerns over the US Federal Reserve hawkish tone on the monetary policy, coupled with the rising Covid-19 cases. European stock markets turned lower, while Asia stock markets ended mostly in red.

The Day Ahead

The FBM KLCI extended its gains for the third session as selected heavyweights were lifted on the back of FTSE rebalancing activities. However, given the Wall Street has fallen significantly last Friday over the concerns on the rising Covid-19 Omicron cases as well as more hawkish monetary policies going forward, we could expect some pullback on the local equities. Meanwhile, investors may keep an eye on Malaysia’s inflation rate which was scheduled to be released this week. Commodities wise, the crude oil price declined but hovered above the USD73 per barrel mark, while the CPO price is trading above RM4,400.

Sector focus:. Broadly speaking, we may anticipate heavyweights to be traded higher on the back of window dressing activities that is expected to emerge. Besides, traders may stay defensive selecting utilities sector with the ongoing fight against the Omicron variant.

FBMKLCI Technical Outlook

The FBM KLCI rallied to close above the critical 1,500 level and the daily EMA9 level. Technical indicators have turned slightly positive as the MACD Histogram has extended a positive bar, while the RSI is spiking higher towards 50. The support level is located at 1,500, while the resistance is pegged along 1,520-1,535.

Company Brief

Yinson Holdings Bhd’s 3QFY22 net profit fell 3.0% YoY to RM98.0m, mainly due to the aforementioned lower progress from EPCIC business activities and net unfavourable foreign exchange movement of RM16.0m. Revenue for the quarter tumbled 63.8% YoY to RM820.0m. (The Star)

Destini Bhd has secured an engineering, procurement, construction and commissioning (EPCC) contract of solar photovoltaic systems at 1,177 Indah Water Konsortium Sdn Bhd (IWK) sewerage treatment plants across Malaysia. Destini will bear the EPCC cost of the solar PV systems. In return, IWK will buy the electricity generated from these systems from Destini, based on a fixed discounted tariff, for the next 20 years. (The Star)

Duopharma Biotech Bhd has secured a RM375.2m contract to supply insugen insulin recombinant human formulations to all Ministry of Health’s (MoH) hospitals, district health offices and clinics. The government has accepted the tender offer from the group’s wholly-owned subsidiary Duopharma Marketing Sdn Bhd by way of direct negotiation. (The Edge)

Optimax Holdings Bhd has inked a memorandum of understanding with Selgate Healthcare Sdn Bhd, an indirect wholly-owned unit of the Selangor State Development Corporation to manage and operate a full-service eye specialist centre at Selgate’s designated hospitals on an exclusive basis. Selgate would provide the facilities for its use and would procure the necessary approvals from the Health Ministry for the provision of the full-service eye specialist centre at the clinic by Optimax. (The Edge)

Gadang Holdings Bhd has been awarded a subcontract worth RM131.4m from Binary Vista Sdn Bhd to undertake geotechnical, drainage and structural works for Package 2 of the Central Spine Road. The new job secured via its wholly-owned Gadang Engineering (M) Sdn Bhd, will take 30 months and shall be completed by the 2Q24. (The Edge)

United Malacca Bhd’s 2QFY22 net profit soared 385.9% YoY to RM36.1m, mainly contributed by the group’s plantation segment in both Malaysia and Indonesia. Revenue for the quarter climbed 46.9% YoY to RM143.9m. A first interim single-tier dividend of 5.0 sen per share, payable on 21st January 2022 was declared. (The Edge)

NTPM Holdings Bhd’s 2QFY22 net profit sank 75.6% YoY to RM3.5m, underpinned by significant increase in raw materials and freight cost, foreign exchange loss, and higher selling and distribution expenses. Revenue for the quarter declined 4.2% YoY to RM180.8m. A second interim dividend of 0.8 sen per share, payable on 21st January 2022 was declared. (The Edge)

Malaysia Smelting Corp Bhd has reported that the force majeure that kicked in for the group since June 2021 due to the national Covid-19 lockdown will be lifted at midnight on 20th December 2021. Due to improving Covid-19 situation, the group is now looking forward to returning to normal operation. (The Edge)

Chin Hin Group Bhd has raised its stake in Solarvest Holdings Bhd to 27.5%, from 25.5% previously, after it mopped up additional 13.5m shares for RM16.1m cash, or RM1.19 per share. The share purchase was done on the open market from 24th November 2021 to 9th December 2021. (The Edge)

Supermax Corp Bhd's US-based subsidiary Maxter Healthcare Inc is planning a major manufacturing facility in Texas to expand glove production. The facility will be built in four phases, with the first one to start in 1Q22 and production to be possible from this phase by 4Q22. The investment identified for the first phase will total US$350.0m and comprise the group's North America manufacturing headquarters, a research and development centre, a training centre and an employee facility centre. (The Edge)

The external auditor of China Automobile Parts Holdings Ltd (CAP), CAS Malaysia PLT, has issued a disclaimer of opinion on the China-based group’s financial statements for FY17. Its auditor has not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the group's financial statements. (The Edge)

Source: Mplus Research - 20 Dec 2021