Buoyed by solid 4Q21 GDP data

Market Review

Malaysia:. The FBM KLCI (+0.6%) advanced as investors brushed off the renewed volatility on Wall Street and focused on the 4Q21 GDP data that expanded 3.6% YoY. The lower liners also extended their gains, while the plantation sector (+4.7%) soared on the mostly positive broader market as CPO prices ascend.

Global markets:. Wall Street suffered another volatile session as the Dow (-1.4%) sank on concerns over the escalating geopolitical tension between Russia and Ukraine as the former may take military action this week. The European stockmarkets were downbeat, while Asia stockmarkets finished mostly negative.

The Day Ahead

The local bourse delivered a solid performance as the bulls took charge to send the FBM KLCI closing at year-to-date high. Following the announcement of 4Q21 GDP data, we reckon that Malaysia’s economy is largely on track for recovery in 2022 (BNM projection at 5.5-6.5%) alongside with the swift Covid-19 vaccination rate. Still, further gains could be muted by the escalating geopolitical tension between both the Russia and Ukraine. Nevertheless, we believe traders may shift the focus towards the upcoming quarterly reporting results in coming weeks.

Sector focus:. We continue to favour the plantation sector that is riding onto the soaring CPO prices and traders are anticipating solid 4Q21 results. Likewise, the energy sector is on the move as crude oil prices has been rallying strongly. Meanwhile, we think that the digital banking-related stocks may come into the spotlight as Bank Negara looks to announce the winners next month.

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 tuned higher to hover near the overbought position. 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

Tropicana Corp Bhd has entered into an agreement with PowerChina International Group Ltd to develop a 308.0-ac. integrated entertainment hub dubbed Tropicana Paradise in Genting Highlands. The project is part of the 596.0-ac. mega master planned development in Genting Highlands called Tropicana WindCity. The development will feature among others, a total of 1.5m sqf of retail space, serviced apartments, branded residences, as well as 4 and 5-star international brand hotels. (The Star)

Icon Offshore Bhd has secured a US$9.6m (RM40.22m) order from ConocoPhillips Sarawak Ltd and ConocoPhillips Sarawak Oil Ltd (collectively ConocoPhillips Sarawak) to supply a jack-up drilling rig. The work is for the provision of a jack-up rig, namely Icon Caren to drill three plus one wells which is expected to commence in 2Q22. (The Star)

Axiata Group Bhd, Maxis Bhd and Digi.Com Bhd said they have accepted offers from the Malaysian Communications and Multimedia Commission (MCMC) for spectrum assignments across five years from 1st July 2022. Digi.Com, through its subsidiary Digi Telecommunications Sdn Bhd, and Maxis, through its relevant subsidiary, have accepted the offer for the 2x10MHz spectrum in the 2600MHz band. Meanwhile, Axiata said its unit Celcom Axiata Bhd was assigned the spectrum in 2530MHz-2540MHz, paired with 2650MHz to 2660MHz frequency bands. The price component payment or upfront fee for each of the assigned spectrum was RM11.8m, payable before 14th February 2022 with total annual fees for the five years fixed at RM20.8m, payable before 15th Dec 2022. (The Edge)

Capital A Bhd has tapped former telecommunications executive Tan Sri Jamaludin Ibrahim to join its aviation arm’s board as its new independent non-executive chairman. Capital A also announced its airline group’s name change from AirAsia Aviation Ltd to AirAsia Aviation Group Ltd (AAAGL) and a corporate consolidation of its aviation-related businesses along with Jamaludin’s appointment. (The Edge)

Malaysia Marine and Heavy Engineering Holdings Bhd’s (MHB) 4QFY21 net loss widened to RM107.8m, from a net loss of RM8.6m recorded in the previous corresponding quarter, on higher operating losses and lower revenue from its heavy engineering and marine segments. Revenue for the quarter dropped 37.9% YoY to RM432.0m. (The Edge)

Dialog Group Bhd has accepted an engineering, procurement, construction, and commissioning (EPCC) contract with an estimated value of up to RM724.0m for a melamine plant for Petronas Chemicals Fertiliser Kedah Sdn Bhd (PCFKSB). The contract was awarded to Dialog’s unit Dialog E & C Sdn Bhd, which teamed up with Technip Energies (M) Sdn Bhd, by PCFKSB. (The Edge)

Vizione Holdings Bhd has bagged sub-contract works worth RM130.0m from Permata Rebana Sdn Bhd to build a medical lab at Bandar Enstek, Seremban, Negeri Sembilan. Vizione wholly-owned subsidiary Vizione Builder Sdn Bhd has entered into a joint venture agreement with Permata Rebana to jointly undertake the proposed project. (The Edge)

VS Industry Bhd has appointed PwC Consulting Associates (M) Sdn Bhd to conduct an independent review of the group’s migrant worker labour practices. The review to be conducted by PwC Consulting will be comprehensive and include the support of a labour rights consultant. (The Edge)

Mulpha International Bhd indirect wholly-owned subsidiary Circa 1 Pty Ltd has accepted a A$67.2m (RM201.5m) loan facility from the National Australia Bank Ltd for a property development project in New South Wales, Australia. The loan facility is to fund the development of a seven-storey strata office and healthcare building owned by the JMJ Trust. (The Edge)

Several subsidiaries of Serba Dinamik Holdings Bhd have applied for a judicial management order to enable the group to restructure its finances. This move comes on the back of a series of events that has affected its cash flow, due to the Covid-19 pandemic which has significantly slowed down the timing of payments by customers as well as the progress of the projects the group has undertaken. (The Edge)

White Horse Bhd has reported that Liao Yuan Shun had retired as the executive chairman and managing director of the group effective immediately. Currently, Teo Swee Teng and Cheng Soon Mong are joint deputy managing directors of the group. Consequently, Yuan Shun’s son Liao Hung-Chang, 37, will cease to be the alternate executive director to Yuan Shun with immediate effect. (The Edge)

Source: Mplus Research - 14 Feb 2022