Tuning up

Market Review

Malaysia:. The FBM KLCI (+1.4%) delivered a solid performance, lifted by the broad based rally, taking cue from the gains on Wall Street overnight. The lower liners also marched higher, while the broader market was mostly upbeat, led by the financial services sector (+1.8%) as economic recovery gains traction.

Global markets:. Wall Street extended their lead as the Dow (+0.9%) advanced ahead of the inflation data tonight that will provide clues over the pace of interest rate hike. Elsewhere, both the European and Asia stockmarkets finished on a positive tone.

The Day Ahead

We believe that the local bourse may attempt to build onto yesterday’s gains, capitalising on the recovery move yesterday on the back of the robust retail sales data for December 2021, which is at record high of RM120.5bn (+3.5% YoY). Still, cautiousness prevails ahead of the US inflationary data scheduled to be release tonight. Also, we think that the lower liners may see extended rotational play on the back of the positive market undertone. At the same time, the liquidity driven market that is seeing signs of recovery is a boon for pockets of opportunities, over the interim.

Sector focus:. We continue to favour the recovery theme stocks ahead of the 4Q21 GDP data tomorrow. Mirroring the positive move on Nasdaq overnight, the technology sector is also returning to the spotlight. The strong rebound in commodities (CPO and crude oil) may transpire to improve trading interest within the plantation and oil & gas stocks.

FBMKLCI Technical Outlook

The FBM KLCI advanced sharply to breakout above the 1,545 resistance level as the key index climbed to close above the daily SMA 200 level. Technical indicators remained positive as the MACD remained above the zero level, while the RSI solidify its position above 50. The immediate resistances are now located at the 1,570-1,580, while support is set around 1,525, followed by 1,500.

Company Brief

S P Setia Bhd through its subsidiary Setia HC Ventures Sdn Bhd, has signed an agreement with Qualitas Medical Group Sdn Bhd intending to develop and operate an ambulatory care centre (ACC) in Setia Alam, Shah Alam. S P Setia has identified the first ACC to be established at Setia City Residences in Setia Alam, taking cognisance of such developments. (The Star)

AT Systematization Bhd’s (ATS) wholly-owned unit AT Precision Tooling Sdn Bhd (ATP) has entered into a Value Contract with Maschinenfabrik Rieter AG (Rieter) to produce aluminium profiles for Rieter’s Card and Ringspin sector amounting to US$10.0m (US$1=RM4.18). The period validity is between 1st January 2022 and 30th December 2023. (The Star)

Maxis Bhd is still in the midst of talking with the government to determine the roll out of its 5G network to consumers. Maxis have been working with the regulators and the Ministry of Communications and Multimedia. Maxis had invested RM27.00bn in capital expenditure over the last 26 years in its network, with over 10,000 mobile base stations currently providing more than 93.0% 4G network coverage across the nation. (The Edge)

The shareholder dispute on the divestment of Axiata Group Bhd’s subsidiary Celcom Axiata Bhd’s 35.0% stake in Tune Talk Sdn Bhd has been brought to the Asian International Arbitration Centre (AIAC). A group of Tune Talk shareholders, who collectively hold a 30.0% stake, is trying to block Celcom Axiata from selling its 35.0% stake in the mobile virtual network operator. (The Edge)

Revenue Group Bhd is slated to transfer to the Main Market of Bursa Malaysia from the ACE Market on 14th February 2022. Its stock short name, stock code and international securities identification number code will remain unchanged. (The Edge)

PN17 company Jerasia Capital Bhd has reported that 3 of its wholly-owned subsidiaries; Canteran Apparel Sdn Bhd, Jerasia Fashion Sdn Bhd and Jerasia Apparel Sdn Bhd have defaulted in their repayment of principal and interest of financing facilities granted by United Overseas Bank (Malaysia) Bhd, totalling RM74.6m. (The Edge)

TMC Life Sciences Bhd’s 2QFY22 net profit grew 27.9% YoY to RM6.9m, on the back improved topline growth. Revenue for the quarter rose 21.4% YoY to RM59.2m. (The Edge)

Source: Mplus Research - 10 Feb 2022