Heads turning to 4Q21 GDP

Market Review

Malaysia:. The FBM KLCI (+1.2%) extended its strong run as the key index hovered largely in the positive territory, led by gains from selected plantation and oil & gas heavyweights yesterday. The lower liners also marched higher, while the broader market stayed mostly positive with the plantation sector (+3.1%) leading the pack.

Global markets:. Wall Street was ensnared with renewed volatility as the Dow (- 1.5%) fell after the inflation data in January (+7.5% YoY) soared to 4 decades high; leaving markets to speculate a full percentage point of rate hikes by July 2022. The European stockmarkets closed mixed, while Asia stockmarkets ended mostly higher.

The Day Ahead

After delivering 2 days of sturdy performances, investors’ attention now has shifted towards the upcoming release of 4Q21 GDP data later today in order to assess the pace of economic recovery. Amid the renewed volatility on Wall Street overnight, we reckon that profit taking activities may take shape amid the mounting concerns over the pace of interest rate hikes for the US in 2022. The lower liners are also turning choppier after enjoying a decent run since end-January 2022 as signs of profit taking activities are emerging.

Sector focus:. We reckon that the plantation sector may remain upbeat, taking cue from the elevated CPO prices and ahead of the upcoming release of quarterly earnings. Recovery theme stocks may also continue to be boosted ahead of the release of 4Q21 GDP data. Meanwhile, the energy sector may experience some profit taking as crude oil prices enters into a consolidation phase.

FBMKLCI Technical Outlook

The FBM KLCI formed another bullish candle as the key index hit the immediate resistance of 1,570. Technical indicators stayed positive as the MACD remained above the zero level, while the RSI remained above 50. The next resistances are located at the 1,580-1,600, while support is remained set around 1,525, followed by 1,500.

Company Brief

Berjaya Food Bhd’s 2QFY22 net profit surged 249.6% YoY to RM38.9m, on the back of higher revenue, coupled with an improved performance from its Kenny Rogers Roasters operations. Revenue for the quarter grew 56.7% YoY to RM272.8m. (The Star)

Capital A Bhd’s 100.0%-owned subsidiary AirAsia Aviation Ltd is set to announce key organisational changes as well as the airline group’s entity’s establishment of an independent board of directors, including a new non-executive chairman on Friday. The announcement will be made by Capital A chief executive officer Tan Sri Tony Fernandes. (The Edge)

The High Court has dismissed Serba Dinamik Holdings Bhd’s application for an injunction against Bursa Malaysia Securities Bhd to prohibit the regulatory authority from forcing the company to release the factual findings update (FFU) by Ernst & Young Consulting Sdn Bhd. On 7th February 2022, another High Court had ordered Serba Dinamik to reveal the FFU within two market days. However, it is understood that Serba Dinamik has formally written to apply for a stay of that decision, and that application will be heard on 14th February 2022. (The Edge)

The Ministry of Health’s Institute of Clinical Research (ICR) has called Pharmaniaga Bhd’s claim that two doses of Sinovac’s Covid-19 with one Pfizer BioNTech booster is less effective against the Omicron variant of the coronavirus a misrepresentation of prevailing facts and evidence. The ICR continues to recommend Pfizer or AstraZeneca as the preferred booster for Sinovac vaccine recipients. (The Edge)

Asia Media Group Bhd has filed a legal suit against its former chief executive officer and founder Wong Shee Kai over account discrepancies. The company has discovered discrepancies in the accounts relating to the company’s funds used to acquire property, plant and equipment based on findings made by BDO Governance Advisory Sdn Bhd. There is no financial impact at present, but there will be a positive impact in the event the court decides in the company’s favour. (The Edge)

Financial management solutions provider Censof Holdings Bhd has disposed of 5.0m shares in Dagang NeXchange Bhd (DNeX) for RM5.0m on the open market which sees it making a profit of RM1.2m on its investments. Proceeds from the disposal will be used for working capital within the next 12 months. (The Edge)

Aemulus Holdings Bhd is looking to inject capital into Tangming Shengshi Technology (Jiashan) Co Ltd (TMSS), which is involved in the development and sales of semiconductor equipment and the provision of design consultancy services. In 2020, Aemulus had entered into an agreement with China-based technology firm Tangren Microtelligence Technology (Jiashen) Co Ltd to form a 40:60 joint venture; TMSS to enter the China market. (The Edge)

Green Packet Bhd’s newly emerged largest shareholder Leong Seng Wui has joined the company’s board as executive director effective 10th February 2022. Leong’s appointment came after the group’s co-founder Puan Chan Cheong sold his stake in Green Packet and resigned from the board on 31st January 2022. Leong, 42, is the former executive director of XOX Networks Bhd. (The Edge)

Source: Mplus Research - 11 Feb 2022