Brushing off concerns over Omicron

Market Review

Malaysia:. The FBM KLCI (+0.5%) rebounded, tracking the regional gains following the overnight rallies on Wall Street as banking and glove heavyweights led gains. The lower liners closed mixed, while the healthcare sector (+1.9%) outperformed the broader market despite brushing off fears over Omicron.

Global markets:. The US stock markets posted gains for the second straight session as the Dow (+0.7%) reclaimed its uptrend on the back of improved consumer confidence that eased concerns over inflation caused by Covid-19 pandemic. Both the European and Asia stock markets trended higher.

The Day Ahead

Overall market conditions have improved on the local front and the FBMKLCI managed to secure above the 1,500 level with thanks to the glove heavyweights. Meanwhile, Wall Street gained momentum overnight, rebounding for the second consecutive day amid the fading concerns over Covid-19 Omicron variant given that the hospitalisation rate and symptoms are much milder as compared to Delta variant. Hence, we believe the buying interest would pick up further on our local equities generally. Also, we have noticed several stocks are undergoing window dressing activities which may last until year-end. On the commodity markets, the Brent crude oil (above USD75) and CPO (above RM4,500) prices gained traction.

Sector focus:. We believe investors may pick up on recovery theme stocks as well as financials on the back of fading Omicron fears as well as window dressing activities. Meanwhile, there might be trading interest on O&G sector amid firmer crude oil price.

FBMKLCI Technical Outlook

The FBM KLCI has secured above the key 1,500 psychological level. The technical indicators are suggesting that the momentum could be picking up with the Histogram extended another positive bar, while the RSI is approaching 50 level. The resistance is located around 1,510-1,530. Meanwhile, the support is envisaged around the 1,480 zone.

Company Brief

Kelington Group Bhd’s unit Kelington Engineering (S) Pte Ltd (KES), has secured a contract worth RM110.0m to provide Ultra High Purity (UHP) solutions for a wafer production facility in Singapore. The contract was from the customer who is a global leader in engineering and project management of high-technology facilities. (The Star)

Berjaya Food Bhd (BFood) has proposed to acquire two freehold commercial units at Berjaya Times Square for RM15.7m, or RM650 per sq ft. Its wholly-owned subsidiary Berjaya Starbucks Coffee Company Sdn Bhd had entered into two separate sale and purchase agreements with Berjaya Times Square Sdn Bhd, a wholly-owned subsidiary of Berjaya Assets Bhd. (The Star)

AirAsia Group Bhd will be suspending new Vaccinated Travel Lane (VTL) flight bookings for Kuala Lumpur-Singapore and Bangkok Don Mueang-Singapore between 23rd December 2021 and 20th January 2022. This comes after the announcement of the Singapore government regarding the temporary and immediate suspension of new flight bookings on the designated VTL flights into Singapore. (The Star)

Mohd Khairil Abdullah, the CEO of Axiata Digital Services, the digital services arm of Axiata Group Bhd, has resigned from the top position. Mohd Khairil will leave Axiata Digital on 14th February 2021 after a nine-year stint at Axiata Group. (The Edge)

FGV Holdings Bhd plans to raise RM500.0m by establishing a sukuk murabahah programme. The proceeds will be used by FGV to refinance its existing financing or borrowings. (The Edge)

KNM Group Bhd has proposed a slew of corporate exercises to improve its financial position, including disposing of its Thai and UK plants and listing Germany-based Borsig Group. This comes as the group is seeking to resolve its recent default on its 2.78bn baht (RM346.8m) Thai bonds, and unlock the sum-of the-parts value of KNM Group for its shareholders. (The Edge)

MyNews Holdings Bhd’s 4Q21 net loss widened to RM8.9m from RM5.8m recorded in the previous corresponding quarter due to the nationwide lockdown. Revenue for the quarter declined 9.7% YoY to RM104.1m. (The Edge)

Willowglen MSC Bhd has been awarded an RM13.5m contract by the Public Utilities Board of Singapore for the purpose of maintenance of existing supervisory control and data acquisition systems. (The Edge)

Gadang Holdings Bhd’s indirect 70%-owned subsidiary Nusantara Suriamas Sdn Bhd (NSSB) has signed a power purchase agreement for a large-scale solar energy project with Sabah Electricity Sdn Bhd (SESB). NSSB will design, construct and operate a solar photovoltaic energy generating facility with a capacity of 5.9 Megawatt alternating current in Tawau, for connection to SESB's medium voltage distribution network at PPU Sri Indah. (The Edge)

Malaysian Pacific Industries Bhd (MPI) has entered into an agreement to invest in land for its new plant in Suzhou, China. Under the agreement, the company will acquire a 16.47-ac land with a usage term of 50 years at a cost of around 22.4m yuan (RM14.8m) to build its new plant. (The Edge)

Pertama Digital Bhd is venturing into fibre broadband services. The firm is in advanced investment and collaboration negotiations with iFIBER Holdings Sdn Bhd that were formalised in a Memorandum of Understanding. Through this partnership, Pertama Digital and iFIBER seek to deliver gigabit speed internet connectivity at affordable rates. (The Edge)

Source: Mplus Research - 23 Dec 2021