Still under pressured

Market Review

Malaysia:. The FBM KLCI (-0.9%) marked its seventh straight session of decline, mirroring the weakness across regional markets’ movements. The lower liners remained downbeat, while all the 13 major sectors on the broader market was splashed in red with the healthcare sector (-1.8%) taking the worst hit.

Global markets:. Wall Street ended marginally lower after rebounding off their intraday lows as the International Monetary Fund cuts global growth outlook to 4.4% in 2022 (from 4.9% projected earlier). The European stockmarkets rebounded, but Asia stockmarkets remained mostly downbeat.

The Day Ahead

The FBM KLCI marked its 7-day losing streak amid mounting concerns over geopolitical tension, as well as ongoing worries on the anticipated rate hikes in the upcoming FOMC meeting. We believe the downward move on the local front may persist, given Wall Street finished another session in the red. However, we expect investors to pick up significantly bashed down companies with solid fundamentals ahead of the earnings season. Commodities wise, the crude oil price hovered above USD88 per barrel mark, while the CPO price continued to retreat, hovering above RM5,200. Meanwhile, gold price is creeping higher above the USD1800 level.

Sector focus:. We expect the energy counters to trend higher in line with the higher crude oil price. Also, gold related stocks might get a boost if the gold price could surge towards USD1900. Meanwhile, technology stocks may see a short-term rebound on the back of bargain hunting activities.

FBMKLCI Technical Outlook

The FBM KLCI extended losses to the seventh straight session as the key index breached below the SMA50 level. Technical indicators remained negative as the MACD Histogram has extended another negative bar, while the RSI continued to hover below 50. The key index is testing support at 1,500. Meanwhile, the previous support turned resistance is pegged around 1,530.

Company Brief

Pintaras Jaya Bhd’s wholly-owned subsidiary, Pintaras Megah Sdn Bhd has secured a contract worth RM34.3m for earthwork, piling, sub-structure, and ancillary works. The project in Kuala Lumpur will commence on 14th February 2022 with a contract period of 18 months. (The Star)

Hibiscus Petroleum Bhd indirect wholly-owned subsidiary Peninsula Hibiscus Sdn Bhd had successfully completed the acquisition of the entire equity interest in Fortuna International Petroleum Corp (FIPC) from Repsol. Out of the purchase price of US$212.5m (about RM890.1m), the net amount paid at completion was US$123.7m after taking into account various adjustments, including the deposit paid of US$15.0m. (The Edge)

Tenaga Nasional Bhd (TNB) will issue RM500.0m worth of bonds on 26th January 2022. The bonds will have a tenure of one year and will mature on 26th January 2023. (The Edge)

Petron Malaysia Refining & Marketing Bhd (PetronM) has appointed former Lembaga Tabung Haji chief executive officer (CEO) Datuk Nik Mohd Hasyudeen Yusoff as an independent director of the company, effective 1st February 2022. (The Edge)

Axiata Group Bhd has appointed the Employees Provident Fund’s Chief Strategy Officer Nurhisham Hussein as a non-independent and non-executive director, effective 25th January 2022. (The Edge)

Aimflex Bhd has redesignated Datuk Awang Daud Awang Putera from executive chairman to non-executive chairman with effect from 25th January 2022. He joined the board on 19th August 2020 as the group's non-independent non-executive chairman. (The Edge)

Source: Mplus Research - 26 Jan 2022