Mild profit taking

Market Review

Malaysia:. The FBM KLCI (-0.2%) pared some of its previous session gains, dragged down by mild profit taking activities in selected plantation and banking heavyweights. The lower liners, however, extended their lead, while the broader market ended mixed with the energy sector (+3.8%) outperformed.

Global markets:. Wall Street remained volatile as the Dow (-0.1%) erased all its intraday gains to close mildly lower, while the S&P 500 (+0.5%) and Nasdaq (+1.6%) was buoyed by the strong earnings from Amazon (+13.5%). The European stockmarkets remained downbeat, but Asia stockmarkets ended mostly higher.

The Day Ahead

The FBM KLCI faltered on Friday after an overnight plunge on Wall Street spooked investors, underperforming the regional markets that were broadly positive. Wall Street staged a rebound overnight as the better-than-expected January jobs report propelled shares on the broader market. Nevertheless, the local bourse could remain volatile with the daily Covid-19 cases breached above the 10,000 mark on Sunday under the Omicron wave. On the commodities market, the crude oil price rallied towards USD93 per barrel mark, while the CPO price hovered above RM5,600, both showing no sign of slowing down.

Sector focus:. We expect the technology stocks to stage a tentative recovery following recent selloff. Besides, the healthcare sector may come under limelight amid surging daily Covid-19 cases. While the energy and plantation counters may see mild profit taking activities, earnings outlook for the sectors should remain positive.

FBMKLCI Technical Outlook

The FBM KLCI took a breather after staging a minor rebound in the previous session; the key index closed around its daily EMA-9 level. Technical indicators turned slightly positive as the MACD is flattening around the zero level, while the RSI is pointing towards 50. Resistance is set at 1,530, while the support is located around 1,505.

Company Brief

Uni Wall Aps Holdings Bhd's 80.0%-owned NS Aero City Sdn Bhd has entered into a memorandum of collaboration with Sun Solutino Pte Ltd to develop certain projects related to Malaysia Vision Valley 2.0 with an estimated investment value of up to RM1.00bn. The memorandum of collaboration will remain valid for a period of one year from the date of the agreement. (The Star)

Sapura Energy Bhd has decided to withdraw from the Yunlin offshore wind farm installation project in Taiwan, following a material breach of contract. The group has an immediate right to legally and contractually terminate the contract, as advised by its external international lawyers. (The Edge)

Trading in the securities of Toyo Ventures Holdings Bhd (TVHB) will not be suspended on 10th February 2022, as the company managed to submit its annual report for the financial period ended FY21 to Bursa Malaysia on Monday 31st January 2022. (The Edge)

Hibiscus Petroleum Bhd's associate company in Australia, 3D Oil Ltd (TDO), has been awarded a VIC/P79 exploration permit in Australia. The permit in offshore Otway Basin awarded by the National Offshore Petroleum Titles Administrator covers an area of 2,576 sqkm that is next to the largest gas fields in the offshore Otway Basin, Thylacine and Geographe, and contains the highly prospective Vanguard Prospect. (The Edge)

The Federal Court has given its nod for Muhibbah Engineering (M) Bhd to proceed with a judicial review of the notice of additional tax assessments for a sum of RM23.0m that was issued by the Inland Revenue Board of Malaysia (IRB) in May 2021. The court unanimously granted affirmation to the Court of Appeal's decision on 19th July 2021 in respect of granting leave and proceeding with the judicial review hearing, and the issuance of a stay order in favour of the company until the substantive judicial review hearing is concluded. (The Edge)

Cuscapi Bhd has acquired 16.0m shares representing a 0.2% stake in e-government service provider MYEG Services Bhd, for an aggregate sum of RM15.0m in the last 12 months. The acquisitions were partly funded by internal funds and proceeds from a private placement. (The Edge)

Source: Mplus Research - 7 Feb 2022