Volatility still a feature

Market Review

Malaysia:. The FBM KLCI (-0.9%) extended its decline as selling pressure remain unabated after more than two-thirds of the key index components closed in the red. The lower liners ended mostly lower, but the technology (+0.5%) and construction sector (+0.2%) outperformed the negative broader market.

Global markets:. Wall Street remained downbeat as the Dow (-1.5%) slumped on concern over the possibility of sooner-than-expected interest rate hike to guide inflation lower. The European stockmarkets ended in red, while Asia stockmarkets finished mostly lower.

The Day Ahead

The FBM KLCI sank for another session on Monday as investors took profit in selected heavyweights prior to the Thaipusam holiday, despite a positive cue from China’s stronger-than-expected economic growth in 2021. However, we think the volatility may continue in the market over the near term while investors monitor for new developments of interest rate movement in the US. Meanwhile the technology counters might see another slump following the overnight tumble in Nasdaq. Commodities wise, the CPO price back above RM5,000, while the crude oil price climbed above USD87/bbl mark.

Sector focus:. Investors may see buying interest in banking counters following the selloff in the previous session on the back ahead of the Bank Negara’s MPC meeting. Besides, the plantation and oil & gas counters may gain traction as the commodities price continued their uptrend move.

FBMKLCI Technical Outlook

The FBM KLCI extended losses and closed below the SMA200 and daily EMA9 level. Technical indicators, however, remained positive as the MACD Histogram has extended a positive bar, while the RSI hovered above the 50 level. Investors may watch the support set at 1,530, while the resistance is located at 1,580.

Company Brief

A consortium, comprising SMTrack Bhd along with five other listed companies, Country Heights Holdings Bhd, Jiankun International Bhd, Sersol Bhd, Techna-X Bhd and MQ Technology Bhd have signed a Heads of Agreement (HoA) with 5G Infra Tech Solution Sdn Bhd to undertake a series of corporate exercises. The corporate exercises targets to raise funds and finance 5G and fibre optics-related projects by Digital National Bhd (DNB) and Malaysian Communications and Multimedia Commission (MCMC). (The Star)

Sarawak Consolidated Industries Bhd’s (SCIB) shares will be resumed trading on 19th January 2022 following the release of its annual report 2021. The company has been suspended since 9th November 2021 after it failed to issue its annual report for the financial year ended 30th June 2021 (FY21) by 8th November 2021. (The Star)

KPower Bhd has redesignated Mustakim Mat Nun from deputy chairman to executive chairman with immediate effect. In his role as executive chairman, Mustakim will be responsible for leading KPower’s board of directors and overseeing the group’s business. He is also currently the group’s managing director. In addition, the group has also appointed Ahmad Riza Mohd Saian, a Fellow Chartered Accountant of Chartered Accountants Australia & New Zealand (AANZ) as an independent non-executive director. (The Star)

Eco World Development Group Bhd (EcoWorld) has proposed a bonus issue in the form of 1 warrant for every 5 existing shares. The property developer plans to issue between 588.9-694.0m warrants on a date to be announced later. The exercise price of the warrants will also be determined later. (The Edge)

GFM Services Bhd (GFM) is partnering Majuperak Holdings Bhd to jointly develop and operate a rest and service area (RSA) at Hulu Bernam, Perak, along the North South Expressway. (The Edge)

Fraser & Neave Holdings Bhd (F&N) is expecting market conditions in FY22 to remain tough due to the lingering effects of the Covid-19 pandemic, while commodity prices are anticipated to rise further. As such, F&N would prioritise improving and managing its costs in 2022, particularly its cost of goods sold. (The Edge)

Sunway Bhd’s property arm, Sunway Property Bhd is eyeing RM2.20bn in sales and RM2.30bn in launches for 2022, after seeing its highest ever sales of RM2.55bn in 2021 despite the Covid-19 pandemic. The record performance was mainly attributed to its sales in Singapore. The group's RM4.00bn in unbilled sales will provide earnings visibility for the next 2-3 years. (The Edge)

Ancom Bhd’s 2QFY22 net profit jumped 95.1% YoY to RM12.1m, due to higher revenue and stronger demand for its agricultural and industrial chemical products in the ASEAN region. Revenue for the quarter rose 49.2% YoY to RM532.9m. (The Edge)

Monthly passenger movements for the Malaysia Airports Holdings Bhd (MAHB) group of airports have crossed the 5.0m mark in December 2021. For Malaysia, the growth was driven mostly by domestic traffic which registered 2.8m (+29.6% MoM), arising from the long year-end festive holidays. (The Edge)

The Employees Provident Fund's 65.4%-owned subsidiary Malaysia Building Society Bhd's (MBSB) wholly-owned subsidiary MBSB Bank Bhd has proposed to issue RM5.00bn worth of Islamic bonds or sukuk under the wakalah principle to raise money to finance the financial services provider’s operations. (The Edge)

NWP Holdings Bhd new management has sued its managing director Datuk Seri Kee Soon Ling and independent non-executive director Yew Onn Chong over alleged fraudulent transactions from 2016 to 2021, which had caused NWP and its subsidiaries to suffer losses and damages. The group is seeking RM6.5m in damages from Kee and Yew, as well as an order to bar the two men from being directors of the group for five years, and restrain them from exercising the voting rights attached to the ordinary shares of the group. (The Edge)

Source: Mplus Research - 19 Jan 2022