No reprieve

Market Review

Malaysia:. The FBM KLCI (-0.3%) gapped down to finish lower again, dragged by weakness in banking and gloves heavyweights yesterday. The lower liners extended their decline, while the plantation sector (+0.4%) was the sole outperformer on the broader market.

Global markets:. Wall Street ended mildly higher as the Dow (+0.3%) managed to recoup all its intraday losses to snap a six-day losing streak, lifted by bargain hunting activities ahead of the two-day US FOMC meeting. The European stockmarkets extended their slide, while Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI slumped in line with the weaker performance across regional bourses as investors were trading cautiously ahead of the FOMC meeting, where the officials will discuss about the monetary policies such interest rate direction moving forward. Nevertheless, following the V-shape rebound on Wall Street as most of the stocks were significantly oversold, we expect bargain hunting activities to emerge on the local bourse today, especially within the technology sector. Meanwhile, on the commodity markets, both the CPO and crude oil price declined but remained firm above RM5,200 and USD86 per barrel mark respectively.

Sector focus:. We believe investors may buy on dip ahead of the earnings season in February, especially technology stocks following the recent selldown. Besides, investors may put consumer and building material stocks on the radar given the improving economic conditions.

FBMKLCI Technical Outlook

The FBM KLCI started the week on a downbeat note and the key index fell below the SMA50 level. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI moved lower from the 50 level. The next support is located at 1,505, while the resistance is set at 1,570.

Company Brief

Dagang Nexchange Bhd (DNeX) 60.0%-owned subsidiary, SilTerra Malaysia Sdn Bhd (SilTerra), is investing RM645.0m on an expansion plan that will increase its annual capacity by 20.0%. The investment, sourced from capital injections by shareholders and internally generated funds, will increase SilTerra’s annual capacity from 8.3m (as at end-July 2021) to 10.0m mask layers by early 2023. (The Star)

YB Ventures Bhd has proposed to undertake a bonus issue of warrants to reward its shareholders and allow the group to obtain proceeds without incurring interest when the 3-year convertible warrants are exercised. YB Ventures will undertake a bonus issue of up to 749.0m free warrants on the basis of 1 warrant for every 2 existing ordinary shares held on an entitlement date to be determined later. (The Star)

Greatech Technology Bhd has secured RM160.0m new orders for production line systems and the new orders are expected to last until 2Q23. The new orders secured are mainly contributed by customers from the solar industry amid the increased usage of renewable energy. (The Star)

Luster Industries Bhd is acquiring 100.0m shares representing an 8.2% stake in ACE Market-listed Aimflex Bhd for a total consideration of RM22.0m or 22 sen per share. Luster has entered into a form for transfer of securities on 21st Janaury 2022 with Aimflex executive chairman and shareholder Datuk Awang Daud Awang Putera. (The Edge)

Opcom Holdings Bhd’s subsidiary Opcom Cables Sdn Bhd has secured an award worth RM26.5m from Telekom Malaysia Bhd (TM) to supply fibre optic cables for the telco from 23rd December 2021 until 31st December 2023. (The Edge)

Malayan Banking Bhd (Maybank) has dismissed allegations that it will face major financial trouble on exposure to Genting Hong Kong Ltd. Maybank added that it has a rigorous asset quality monitoring process, whereby vulnerable borrowers are identified and managed accordingly from the onset of any potential asset quality weakness. (The Edge)

Haily Group Bhd has won a RM41.3m contract to build resort villas in Iskandar Puteri, Johor. Haily’s wholly-owned Haily Construction Sdn Bhd has accepted the letter of award for the new job from DP Architects Sdn Bhd on behalf of Country View Bhd's unit Country View Resources Sdn Bhd. The project comprises 121 units of double-storey linked villas, one Tenaga substation and one refuse chamber. (The Edge)

Signature International Bhd’s co-founder Datuk Michael Chooi Yoey Sun has emerged as a substantial shareholder of EcoFirst Consolidated Bhd. Chooi, who is also a major shareholder of Scanwolf Bhd, has acquired 20.0m EcoFirst’s shares or 1.7% direct stake from the open market in the last two weeks. He then further acquired another 40.0m shares or 3.4% indirect stake via an off-market transaction through Wawasan Fokus Sdn Bhd. (The Edge)

Aurelius Technologies Bhd has announced the demise of its group chief executive officer and independent director Lee Chong Yeow @ Lee Chong Yan on 24th January 2022. (The Edge)

Guocoland (Malaysia) Bhd 2QFY22 net profit stood at RM3.8m vs. a net loss of RM11.4m recorded in the previous corresponding quarter, on higher contributions from the property development division and lower loss incurred by the hospitality division. Revenue for the quarter rose 15.6% YoY to RM105.6m. (The Edge)

Raya Airways Sdn Bhd denies that AirAsia Group Bhd has approached its shareholder Datuk Ishak Ismail wanting to take over the air cargo carrier. (The Edge)

Source: Mplus Research - 25 Jan 2022