Roaring into the new year

Market Review

Malaysia:. The FBM KLCI (-0.5%) snapped a 3-day winning streak prior to the mid week Lunar New Year break with more than half of the key index components closed in red. The lower liners, however, extended their gains, while the broader market finished mostly higher, led by the technology sector (+1.8%).

Global markets:. Wall Street extended their lead as the Dow (+0.6%), boosted by the extended dip buying, while none of the 6 Federal Reserve officials have backed the idea of 50 basis points rate hike in March; suggesting milder stance of interest rate hike. Elsewhere, both the European and Asia stockmarkets ended mostly higher.

The Day Ahead

The FBM KLCI took a pause and retreated on the half-day trading session on Monday. While we think market sentiment may stage a rebound, tracking the gains on Wall Street, but the upside could be capped over the near term with lower trading activities following the Chinese New Year break. On a side note, investors may eye on the US, Malaysia and Eurozone’s Markit PMI which will be released today. Commodities wise, the crude oil is hovering around the USD90 per barrel mark, while the CPO price hovered above RM5,500 level.

Sector focus:. The firm commodities price suggested investors may continue to acquire energy and plantation stocks ahead of the February earnings season on the expectations of firmer earnings. Besides, technology stocks may see a short term rebound, lifted by improving sentiment in Nasdaq overnight.

FBMKLCI Technical Outlook

The FBM KLCI retreated as the key index failed to close above the SMA50 and daily EMA9 level. Technical indicators were negative as the MACD Histogram has extended a negative bar, while the RSI hovered below 50. Support is located at 1,505, while the resistance is envisaged around 1,530-1,570.

Company Brief

FGV Holdings Bhd has received a 6-month extension until 3rd August 2022 from Bursa Malaysia Securities Bhd (Bursa Securities) to comply with the exchange’s Public Shareholding Spread Requirement. Based on the Record of Depositors, the public shareholding spread of the company continued to decrease from 13.7% as at 30th June 2021 to 13.1% as at 31st December 2021. (The Star)

Damansara Holdings Bhd (DBHD) has proposed to undertake a private placement of its shares to raise an estimated RM14.8m for working capital purposes. The proposed private placement entails the issuance of up to 31.8m new ordinary shares, representing up to 10.0% of the total number of DBHD shares in issue. The proposed private placement is expected to be completed by 3Q22. (The Star)

Datin Teoh Siew Chin has ceased to be a substantial unitholder of KIP Real Estate Investment Trust (REIT). Teoh disposed of 14.9m units in the REIT in an off-market transaction on 28th January 2022. Teoh is the wife of the late Datuk Chew Lak Seong, the former managing director and co-founder of KIP REIT. He passed away in June 2021, leaving Teoh as the beneficiary of his units in the REIT. (The Edge)

Kejuruteraan Asastera Bhd (KAB) has announced that its wholly-owned subsidiary, KAB Energy Power Sdn Bhd, made its first issuance of sukuk murabahah worth RM20.0m on 31st January 2022 pursuant to its multi-currency sukuk programme of up to RM500 m in nominal value. The Series 1 of Tranche 1 sukuk is secured against various assets of KAB, KAB Energy and its identified subsidiaries. (The Edge)

SMTrack Bhd has offered US$10,000 (RM41,900) for information on the parties and individuals responsible for the spread of the accusations against the group in relation to the implementation of radio frequency identification (RFID) at toll plazas. The RFID specialist said it is taking proactive measures to identify the scandalmonger. (The Edge)

Theta Edge Bhd has been appointed by the Malaysian Communications and Multimedia Commission as the designated universal service provider for the provision and implementation of Phase 1 Jendela project. Theta Edge’s wholly owned unit Theta Telecoms Sdn Bhd received the notification for the appointment on 29th January 2022. (The Edge)

Suria Capital Holdings Bhd has appointed deputy head of Sabah division for Parti Pribumi Bersatu Malaysia Datuk Juslie Ajirol as one of its new independent and non-executive directors. Juslie Ajirol, 68, has over 40 years of experience in public service. He served as a political secretary at Sabah's Public Works Department and Ministry of Rural Development from 1995 to 1999. (The Edge)

Toyo Ventures Holdings Bhd has withdrawn its proposed dividend of 1.0 sen per share due to insufficient retained earnings. The group also announced that external auditor, KC Chia & Noor, has expressed a qualified opinion on the group's audited financial statements for the financial period ended 30th September 2021. The auditor is unable to obtain sufficient appropriate audit evidence to determine the continuity and successful outcome and reliable measurement of the expenditures attributable to the power plant development project undertaken by Toyo Ventures' subsidiary Toyo Ink Group Bhd during the development phase. (The Edge)

Source: Mplus Research - 3 Feb 2022