Tipping higher

Market Review

Malaysia:. The FBM KLCI (+0.3%) marched higher for the third straight session as the key index pared most of its weekly losses to finish -0.5% WoW. The lower liners rebounded, while the broader market ended mostly positive with the exception of construction (-0.8%) and consumer products & services (-0.04%) sector.

Global markets:. Wall Street rallied as the Dow (+1.7%) advanced, mainly driven by the strong corporate earnings from Apple Inc (+4.0%), coupled with signs of bargain hunting activities. The European stockmarkets, however, retreated, while Asia markets closed mixed.

The Day Ahead

The FBM KLCI notched higher on Friday, continuing its rebound move for the third session on the back of bargain hunting activities. We believe the key index will be extending its rebound, as US stocks wrapped up the volatile week with strong gains. Nevertheless, upside might be capped as investors may trade cautiously ahead of the Chinese New Year holiday and focus on earnings season moving forward. On the commodities market, both the CPO and crude oil price rallied, trading above RM5,600 and USD90 per barrel mark respectively.

Sector focus:. The firm crude oil and CPO prices should drive the buying interest into the energy and plantation sectors ahead of the earnings season in February. Besides, technology stocks may see some rebound following the positive performance on Nasdaq last Friday.

FBMKLCI Technical Outlook

The FBM KLCI stayed on an upbeat note as the key index closed below the SMA50 level after retesting it. Technical indicators are turning mildly positive where both the MACD Histogram and RSI are recovering, albeit in the negative region. Support is set at 1,505, while the resistance is located at 1,530-1,570.

Company Brief

Sime Darby Plantation Bhd’s (SDP) report on the assessment of allegations regarding forced labour used in its plantations is now close to completion. The assessment that was conducted by an independent ethical trade consultancy was delayed due to the government-mandated COVID-19 restrictions across Malaysia. (The Star)

Inta Bina Group Bhd has secured a construction contract for main building works on an apartment located at Setapak, Kuala Lumpur worth RM160.6m from Sunway Artessa Sdn Bhd, a joint venture company of Sunway Bhd. The construction will take 33 months to complete from its commencement date. (The Star)

Sunway Real Estate Investment Trust’s (Sunway REIT) 6QFY21 net property income (NPI) increased 86.5% YoY to RM123.1m. Revenue for the quarter jumped 64.8% YoY to RM157.8m. A distribution per unit (DPU) of 2.8 sen, payable on 25th February 2022 was declared. The current financial period of SUNREIT was changed to 18-month period from 1st July 2020 to 31st December 2021. (The Star)

Genting Malaysia Bhd reportedly told attendees at the casino and hotel operator’s pre-opening preview for the group’s estimated US$800.0m (about RM3.20bn) Genting SkyWorlds that the outdoor theme park will open its doors to the public, in time for the peak Chinese New Year season that starts on 1st February 2022. (The Edge)

Bursa Malaysia Bhd’s 4QFY21 net profit declined 38.0% YoY to RM65.0m, amid lower contribution from its securities market segment. Revenue for the quarter fell 28.4% YoY to RM165.2m. A final dividend of 17.0 sen per share, payable on 25th February 2022 was declared. (The Edge)

Digi.Com Bhd’s 4QFY21 net profit increased 8.7% YoY to RM304.6m, due to operational efficiencies and positive outcomes of long-standing tax claims. Revenue for the quarter improved 1.4% YoY to RM1.58bn. A fourth interim dividend of 3.9 sen, payable on 25th March 2022 was declared. (The Edge)

AirAsia Group Bhd has been renamed Capital A Bhd to reflect the group's new business strategy as an investment holding group for not only its aviation business but also its logistics, lifestyle and financial services ventures. (The Edge)

Lestari Duta Sdn Bhd (LDSB) and Mujur Sinarjaya Sdn Bhd (MSSB), subsidiaries of Ideal United Bintang International Bhd (Ideal), has entered into two conditional sale and purchase agreements with Aspen Bell Avenue Sdn Bhd to acquire 17 parcels of freehold land in Penang for RM475.4m. The group intends to purchase the lands, subdivide them, and then sell the individual plots to get more income for the group, which it anticipates would contribute to its bottom line from 2023 onwards. (The Edge)

KLCCP Stapled Group’s 4QFY21 reported a net profit stood at RM70.3m vs. a net loss of RM41.8m recorded in the previous corresponding quarter, as its retail and hotel segments rebounded following the transition to Phase 3 and subsequently Phase 4 of the National Recovery Plan (NRP). Revenue for the quarter increased 14.3% YoY to RM348.2m. A dividend of 12.6 sen per unit — comprising 6.83 sen for KLCC REIT and 5.77 sen for KLCC Property, both payable on 28th February 2022 was declared. (The Edge)

KPower Bhd’s wholly-owned subsidiary KPower Engineering Sdn Bhd has secured from Fabulous Sunview Sdn Bhd a RM105.0m solar power plant contract under which KPower Engineering will, among others, procure and maintain equipment for the proposed 50MWac photovoltaic entity, which will produce electricity from sunlight in Malaysia. KPower Engineering will complete work for the photovoltaic plant by the scheduled completion date, which is not later than 28th February 2023. (The Edge)

Top Builders Capital Bhd has been classified as a Practice Note 17 (PN17) company after Bursa Malaysia Securities Bhd rejected the company’s application for a 6-month extension of the relief period. (The Edge)

Source: Mplus Research - 31 Jan 2022