Recovery trend resume

Market Review

Malaysia:. The FBM KLCI (+0.4%) managed to recover most of its previous session losses, boosted by gains in selected gloves, telco and banking heavyweights yesterday. The lower liners extended their winning streak, while the broader market ended mostly higher, led by the healthcare sector (+1.9%).

Global markets:. The US stockmarkets pullback as the Dow (-1.1%) sank on the US Federal Reserve hawkish remarks over the possibility of earlier and faster interest rate hikes, while the 10-Year treasury yield rose to 1.7%; the highest since April 2021. Both the European and Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI rebounded from its two-day decline as investors were buying the dip, especially in healthcare heavyweights on the back of concerns over emergence of Covid-19 IHU variant. However, the local sentiment may turned cautious, tracking the negative performance on Wall Street overnight following the December US Federal Reserve meeting minutes, which suggested the tone is more hawkish and market may anticipate faster rate hikes and quicker tapering progress. Meanwhile, the CPO price hovered around RM5,000, while the crude oil price rose above the USD80 per barrel mark.

Sector focus:. We believe the advanced CPO price on the back of concerns over supply disruption due to flooding will continue to lend support to the plantation stocks. Besides, the oil & gas counters may be under the limelight as the crude oil price trended higher above USD80 per barrel mark. Also, traders might move back to value stocks with the Fed turning more hawkish.

FBMKLCI Technical Outlook

The FBM KLCI snapped a two-day losing streak and stayed above the EMA9 level. Technical indicators were positive as the MACD Histogram has extended a positive bar, while the RSI hovered above the 50 level. The support level is pegged along 1,530, while the resistance is set at 1,560.

Company Brief

Wah Seong Corp Bhd is disposing of a leasehold estate in Singapore to Swee Joo (Pte) Ltd for S$13.0m. Wah Seong indirect wholly-owned subsidiary, WS Engineering & Fabrication Pte Ltd was selling the 13,734-sqm land together with buildings erected on it. The proceeds will also be used to expand the group’s fabrication facilities in Batam, Indonesia. (The Star)

LBS Bina Group Bhd (LBS) planned to launch 14 new projects in 2022 that will cover Klang Valley, Johor, Pahang and Perak amounting to 3,733 units with a gross development value (GDV) of RM1.77bn. As of 31st December 2021, LBS’s future landbank stood at approximately 2,744-ac, projected to keep the group busy for 10- 15 years to come. (The Star)

APB Resources Bhd has secured a RM10.4m contract to undertake works involving mechanical engineering, procurement and construction of pressure vessels, columns and heat exchangers. The scope of works is estimated to be completed within 8 months. (The Star)

IHH Healthcare Bhd intends to file a motion to dismiss the amended complaint by Emqore Envesecure Private Capital Trust for the lawsuit involving damages in excess of US$6.50bn. IHH Healthcare has strong grounds for seeking dismissal of Emqore Envesecure’s claims on three principal grounds, namely lack of personal jurisdiction, forum non-conveniens and failure to state a claim for relief. (The Edge)

The High Court has set 9th February 2022 to hear the applications from Axiata Group Bhd to strike out a lawsuit by three Tune Talk Sdn Bhd shareholders, who are seeking to block the inclusion of a stake in Tune Talk in the proposed Celcom-Digi.com Bhd merger. The three plaintiffs, who collectively own 30.0% in Tune Talk, have applied to be prohibited from including 5.3m Tune Talk shares representing a 35.0% stake in the proposed merger with Digi. (The Edge)

Source: Mplus Research - 6 Jan 2022