Minor profit taking

Market Review

Malaysia:. The FBM KLCI (-1.2%) erased most of its previous session gains, dragged by pullback in Petronas-related, telco and gloves heavyweights yesterday. The lower liner, however, extended their lead, while the broader market ended mixed with the plantation sector (+1.7%) leading the pack.

Global markets:. The US stockmarkets turned upbeat as the Dow (+0.7%) recovered all its previous two session losses to close at fresh record high level, mainly driven by gains in Tesla and Apple. The European stockmarkets were mostly upbeat, while Asia stock closed mixed.

The Day Ahead

The FBM KLCI declined in the first trading session of 2022 on the back of profit taking activities after the year-end window dressing move. However, we believe market sentiment may turn positive tracking the overnight solid performance on Wall Street, as well as the IHS Market Malaysia PMI which has increased 0.5 MoM to 52.8 in December 2021 that suggested an improving condition in the manufacturing sector. Nevertheless, investors should continue monitoring the global inflation, interest rate and any unpredicted risk arising from Covid-19 variants. On the commodities market, the CPO price rose above RM4,800, while the crude oil price is hovering above USD78 per barrel mark.

Sector focus:. We expect the overnight gains in Nasdaq may spillover to technology stocks on the local front. Besides, traders could focus on the oil & gas and plantation stocks amid firmer CPO and crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI staged a pullback after a strong rally in the previous session to return below the SMA200 level. Technical indicators were mixed as the MACD Histogram has extended a positive bar, while the RSI hovered above the oversold 70 level. Investors may find support at 1,530, while the resistance is pegged along 1,560.

Company Brief

AirAsia Group Bhd is proposing to change its name to Capital A Bhd. The proposed change of name is subject to the approval of the shareholders of the company at a general meeting to be convened at a date to be announced later. (The Star)

Advancecon Holdings Bhd's 30.0%-owned Advancecon Sarawak Sdn Bhd has accepted a contract from Yayasan Sarawak for a proposed development on Lot 501 Salak Land District in Kuching, Sarawak, for RM32.4m. The contract will be for a period of 12 months from the date of possession of the site. (The Star)

Malayan Banking Bhd's (Maybank) group president and chief executive officer (CEO) Datuk Seri Abdul Farid Alias has indicated that he will not be seeking a renewal of his contract when it expires on 1st August 2022. The board is currently undertaking a robust review and assessment process to identify a suitable replacement for Abdul Farid, which includes assessing internal and external candidates. (The Edge)

Serba Dinamik Holdings Bhd, which had missed the deadline to submit its annual report for FY21, is now expecting to issue the report on 6th January 2022. Separately, in its civil suit against the oil and gas engineering company, Bursa Malaysia Securities Sdn Bhd said Serba Dinamik wanted to stop the disclosure of the factual findings update (FFU) on its special independent review partly because it referred to documents and evidence which seized by the Securities Commission Malaysia during its raid on the company was not admissible. (The Edge)

Yinson Holdings Bhd has received a 6-month extension for the bareboat charter contract for its FPSO PTSC Lam Son. The value of the contract extension is estimated at US$9.0m (RM37.5m). The extension was secured through its joint venture company PTSC Asia Pacific Pte Ltd, 49.0% of which is held by Yinson and the remaining 51.0% by PetroVietnam Technical Services Corp. (The Edge)

Poh Kong Holdings Bhd expects a better performance in FY22, on the back of strong demand for gold jewellery and investments. Poh Kong expects gold prices will continue to rise in tandem with demand, and are likely to reach an average of US$2,000 (about RM8,344) per ounce in 2022. (The Edge)

Hap Seng Consolidated Bhd is buying a parcel of vacant commercial land in Jalan Duta for RM868.8m to build a mixed development with an estimated gross development value of RM8.70bn. Its wholly-owned Sierra Positive Sdn Bhd has inked an agreement with Naza TTDI Sdn Bhd's unit TTDI KL Metropolis Sdn Bhd, to buy the land known as Met 3, Plot 7A, KL Metropolis, measuring 668,212.8 sqf. (The Edge)

Opcom Holdings Bhd's subsidiary Opcom Engineering Services Sdn Bhd has accepted a 2-year contract from Celcom Networks Sdn Bhd worth up to RM26.0m. The job involves the survey, construction and implementation of civil infrastructure, fibre optic cabling system and related works of fibre optic infrastructure. (The Edge)

Pantech Group Holdings Bhd has acquired a metal precision machining, engineering and turnkey solutions company that serves the oil and gas and other industries. The acquisition of Unity Precision Engineering Sdn Bhd for RM13.0m will contribute towards Pantech becoming a high value-added manufacturing group. (The Edge)

Supermax Corp Bhd, which has been prohibited from exporting goods to the US following allegations of forced labour, has rolled out a new and comprehensive foreign worker management policy including adopting an equal pay and benefit structure for foreign workers in Malaysia after the US import ban. This would mean both local and foreign workers, including workers of on-site vendors, are now on an equal footing when receiving pay and benefits, which would further eliminate any discriminatory practices. (The Edge)

Source: Mplus Research - 4 Jan 2022