Extended profit taking

Market Review

Malaysia:. The FBM KLCI (-0.5%) extended its losses as profit taking remain evident in Petronas-related and gloves heavyweights yesterday. The lower liners, however, marched higher on a positive market undertone, while the broader market closed mostly positive, led by the energy and utilities sector that added 0.6% each.

Global markets:. The US stockmarkets ended mixed as the Dow (+0.6%) continues to charge higher, but the Nasdaq (-1.3%) was dragged down by selling pressure in technology shares. The European stockmarkets trended higher, while Asia stockmarkets were mostly upbeat.

The Day Ahead

The FBM KLCI dipped for the second consecutive session as investors shifted their focus to lower liners in view to search for alpha investment during the early days. Whilst the local exchange may extend its positive sentiment, the upside may be limited tracking the mixed sentiment on Wall Street. Also, investors may stay cautious given that the multiple rate hikes in 2022 are on the cards. On the commodities market, the crude oil price hovered around USD80 per barrel mark as OPEC+ decided to stick to its planned increase of oil output in February eased the concern over a surplus in 1Q22. Meanwhile, the CPO price trended firmly above RM4,900 level.

Sector focus:. We reckon the firmer crude oil and CPO prices will continue to drive the energy and plantation counters on the back of higher expectation in the upcoming reporting season. Besides, investors may put the plastic manufacturers on radar as ASP may stay elevated on the back of higher oil prices.

FBMKLCI Technical Outlook

The FBM KLCI (-0.5%) pulled back for the second session and the key index remained below the SMA200 level. Technical indicators, however were positive as the MACD Histogram has extended a positive bar, while the RSI is above 50. The support level is located at 1,530, while the resistance is pegged along 1,560.

Company Brief

Ranhill Utilities Bhd’s indirect wholly-owned subsidiary, Ranhill Water Services Sdn Bhd (RWS), has secured a two-year contract worth RM156.8m for non-revenue water (NRW) reduction in Johor. The contract starts immediately in January 2022, is expected to be completed by 31st December 2023. (The Star)

G3 Global Bhd has appointed civil service veteran Datuk Seri Alias Ahmad as independent non-executive director and chairman with effect from 4th January 2022. Alias, who served as the secretary-general of the Ministry of Education (MOE) before retiring on 22nd May 2018, succeeds Datuk Wan Khalik Wan Muhammad as director of the company and executive chairman of the board. (The Star)

Aneka Jaringan Holdings Bhd has bagged a RM16.1m contract to undertake foundation works for an apartment project in Bukit Jalil. The project located in Taman Mutiara Bukit Jalil comprising two blocks of apartments (748 units) and a podium. The contract duration is from 5th January 2022 to 4th October 2022. (The Edge)

SC Estate Builder Bhd (SCBuild) has appointed the Kedah palace's head of ceremony, Datuk Bijaya Indera Datuk Paduka Syed Unan Mashri Syed Abdullah, as an independent and non-executive director of the group with effect from 4th January 2022. (The Edge)

Source: Mplus Research - 5 Jan 2022