Back to lower gear

Market Review

Malaysia:. The FBM KLCI (-0.5%) started off the week on a softer note, dragged down by quick profit-taking activities with more than half of the key index components finished in the red yesterday. The lower liners edged lower, while the healthcare sector (+0.3%) was the only bright spot on the negative broader market.

Global markets:. Wall Street remained downbeat as the Dow (-1.2%) slipped on concern over the surge in Omicron variant cases that may potentially derail the economic recovery progress. The European stock markets extended their losses, while the Asia stock markets were painted in red.

The Day Ahead

The FBM KLCI retreated in tandem with regional bourses amid concerns over the spread of the Covid-19 Omicron variant, which has dampened the sentiment. Tracking the overnight negative performance on Wall Street, selling pressure may extend towards stocks on the local bourse. Although data suggested that Omicron is not as deadly as Delta variant, government across the world could be monitoring for further actions such as lockdown and tighter quarantining SOPs to be deployed it the near term. However, on the local front, we may still anticipate mild window dressing activities towards year-end. On the commodity markets, the crude oil price declined, but hovering above USD71, while the CPO traded around RM4,300.

Sector focus:. Given the resurfacing of Omicron fears, we expect traders to participate in the healthcare sector at least for the near term. Meanwhile, bargain hunting activities may emerge and pick up heavyweights towards year-end.

FBMKLCI Technical Outlook

The FBM KLCI snapped its three-session winning streak to break below the key 1,500 level, closing near the daily EMA9 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 1,475, while the resistance is pegged along 1,505-1,535.

Company Brief

Tomypak Holdings Bhd has reiterated that its wholly-owned subsidiary, Tomypak Flexible Packaging Sdn Bhd (TFPSB), has adequate insurance coverage of up to RM271.0m for property damage and stock in trade and RM80.0m for business interruption of up to 24 months. This is in reference to the fire outbreak at its Senai manufacturing plant in Johor Bahru which happened at approximately 12.30 pm on 19th December 2021 and was contained at approximately 7.00 am on 20th December 2021. (The Star)

Heitech Padu Bhd has accepted a contract for the installation of network infrastructure for the new office of Permodalan Nasional Bhd at Merdeka 118. The contract valued at RM21.7mis for a period of 42 months at an as-yet undetermined date. (The Star)

Less than one month into the role, Serba Dinamik Holdings Bhd’s chairman Datuk Seri Mohamed Farid Abu Hassan has stepped down, citing biased regulatory prosecution aimed towards Serba Dinamik as the reason behind his resignation. Following Farid’s resignation, non-independent non-executive director Datuk Abdul Kadier Sahib is re-designated as its new chairman effective 20th December 2021. (The Edge)

Datuk Md Arif Mahmood has resigned as non-independent non-executive chairman of Petronas Chemicals Group Bhd (PetChem) on 18th December 2021, as well as Petronas Dagangan Bhd (PetDag) on 20th December 2021. Petchem announced that its non-independent non-executive director Datuk Dr Abdul Rahim Hashim will be redesignated as its new chairman. Meanwhile, Datuk Anuar Ahmad, currently the non-independent non-executive director PetDag will be redesignated as the group’s chairman. (The Edge)

Country Heights Holdings Bhd has announced changes to the asset injection exercise from executive chairman and controlling shareholder Tan Sri Lee Kim Yew's private investment holdings that was first announced in October 2021. Notably, Country Heights has downsized the asset acquisition to a total of RM517.0m, from RM544.0m previously. (The Edge)

Yinson Holdings Bhd has bagged a contract worth US$505.0m (about RM2.14bn) from Enauta Energia SA for the provision, operation and maintenance of a floating, production, storage and offloading (FPSO) asset in the Atlanta Field located in the Santos Basin, offshore Brazil. Separately, Yinson also proposed a bonus issue of shares of up to 1.11bn shares on a one-for-one basis. It also proposed a renounceable rights issue together with free detachable warrants to raise gross proceeds of up to RM1.22bn. (The Edge)

Panasonic Manufacturing Malaysia Bhd has announced that its plant in Seksyen 23, Shah Alam (SA2) was affected by the flood over the weekend. The production of fan and vacuum cleaners is disrupted for the time being and the company will need a week to assess the conditions of the machines and equipment that were affected by the flood waters. (The Edge)

Notion VTec Bhd's factory in Klang has been affected by the flood due to the continuous heavy rain. The factory is for the production of gloves and computer numerical control machining under the automotive segment. The company is unable to ascertain the full financial and operational impacts at this juncture due to current inaccessibility to the factory. (The Edge)

YTL Power International Bhd has completed the acquisition of Dodid Pte Ltd, the owner of a 12.5-MW tier-three data centre in Singapore. This marks the group's first foray into the data centre industry outside Malaysia, and its first step towards establishing a regional data centre platform in Southeast Asia. (The Edge)

Westports Holdings Bhd has reported that while Port Klang and some parts of the Klang Valley were affected by flooding after continuous heavy rainfall, the container and conventional facilities were not impacted. Some of its staff were unable to report to work due to travel difficulties which has adversely affected productivity and added some berthing delays. (The Edge)

Paragon Union Bhd announced that two of its main factories in Balakong, Cheras have been badly affected by the flood caused by continuous heavy rain over the weekend. The estimated downtime of the factories will be approximately two weeks and thus, production and delivery to customers will be delayed accordingly. (The Edge)

Pharmaniaga Bhd has assured that all its warehouses and logistics operations are safe and unaffected, and will continue to operate as usual despite the severe impact of the flood that occurred in the Klang Valley over the weekend. An emergency plan has been activated and although some roads might not be accessible due to the flood, alternative routes have been identified to ensure all orders for pharmaceutical products by clinics and hospitals will be delivered accordingly. (The Edge)

Hong Seng Consolidated Bhd has been appointed by the state of Johor to provide medical screening of Covid-19 tests for on-arrival testing for Vaccinated Travel Lane (VTL) at all domestic international gateways. Hong Seng’s unit HS Bio Sdn Bhd’s 60.0%-owned subsidiary Neogenix Sdn Bhd had received a letter of appointment (LOA) from the office of Johor Menteri Besar to provide the screening tests. (The Edge)

The external auditor of China Automobile Parts Holdings Ltd (CAP), CAS Malaysia PLT has expressed a disclaimer of opinion in the group’s financial statements for the FY18. CAS Malaysia PLT could not obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on FY18 financial statements. CAP has submitted an appeal on 20th December 2021, against Bursa Securities’ decision to de-list the group and remove its securities from the official list on 27th December 2021. (The Edge)

Oriental Interest Bhd’s (OIB) 70.0%-owned subsidiary Myra Land Sdn Bhd has proposed to buy a 2.1-ha piece of leasehold land in Pekan Baru Subang, Selangor, from Teguh Majuria Sdn Bhd for RM36.4m cash. The proposed acquisition was in line with the group’s strategic planning to leverage on its strengths in property development and construction to develop the property complementary to the existing development in the Klang Valley. (The Edge)

Kretam Holdings Bhd (KHB) has secured RM21.0m of banking facilities from Alliance Bank Malaysia Bhd. Its wholly-owned subsidiary Syarikat Kretam Plantations Sdn Bhd, which cultivates oil palms, has accepted the facilities to finance the purchase of two pieces of agricultural land planted with oil palms in Sabah from NPC Resources Bhd. (The Edge)

Haily Group Bhd has secured an RM40.7m contract from RDC Arkitek Sdn Bhd on behalf of Austin Senibong Development Sdn Bhd to build 99 units of three-storey shop offices, together with several power substations in Johor Bahru, Johor. (The Edge)

Source: Mplus Research - 21 Dec 2021