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Mplus Market Pulse - 3 Mar 2022

Publish date: Thu, 03 Mar 2022, 08:32 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my

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Finding stability

Market Review

Malaysia:. The FBM KLCI (+0.1%) finished mildly higher after trading in a lacklustre manner as gains were capped by the extended selling pressure in CIMB (-26.0 sen). The lower liners ended mixed, while the broader market closed mostly in red with the technology sector (-2.1%) underperformed.

Global markets:. Wall Street charged sharply higher as the Dow (-1.8%) recovered almost all its previous session’s losses after the US Federal Reserve Chairman Jerome Powell commented that the US economy growth will be able to withstand future rate hikes. The European stockmarkets were also upbeat, but Asia markets closed mostly negative.

The Day Ahead

The FBM KLCI chalked up marginal gains led by the energy, plantation and metal related index components amid soaring commodity prices. We believe the key index is likely to hold its gains on the back of (i) the sharp rebound on Wall Street overnight following the US Federal Reserve supporting smaller rate hikes going forward, (ii) surging crude oil prices after a global agreement to release crude reserves failed to calm fears over supply disruptions, and (iii) likelihood for Bank Negara to hold the interest rate until end-June. The crude oil price jumped above USD112 per barrel mark, while the CPO price traded above RM6,600.

Sector focus:. We believe the selected energy, plantation and metal-related stocks should trade within its uptrend move over the near term amid the unsettled tension between Russia and Ukraine. Besides, the technology sector may rebound in tandem with Nasdaq move overnight.

FBMKLCI Technical Outlook


The FBM KLCI continued to hold above the daily EMA9 level amid increasing trading volume. Technical indicators remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above the 50 level. Support is set at 1,580, followed by 1,570, while the resistance is pegged around 1,615.

Company Brief

Berjaya Land Bhd’s (BLand) has terminated the concession agreement (CA) to undertake a housing and mixed development project in Yangon, Myanmar. BLand said its 80%-owned subsidiary, BDS Smart City Co Ltd, had on 1st March 2022 served a written notice on the Government of Yangon Region to terminate the CA dated 7th February 2020 and withdraw from the proposed development due to non fulfilment of conditions precedent under the concession agreement. (The Star)

Aneka Jaringan Holdings Bhd’s wholly-owned subsidiary, Aneka Jaringan Sdn Bhd (AJSB) has clinched a piling and substructure works contract worth RM20.2m. The contract was to undertake the piling and substructure works for a proposed 45- storey condominium in Setapak, Kuala Lumpur. Piling works shall commence on 1st April 2022 and the contract shall be completed by 31st December 2022. (The Star)

Willowglen MSC Bhd’s wholly-owned subsidiary, Willowglen (Malaysia) Sdn Bhd has been awarded a RM14.4m contract by Sapura Rail Systems Sdn Bhd. The contract was for the systems package-integrated supervisory control system in respect of the rapid transit system (RTS). The commencement date of the contract is on 2nd March 2022, and will be completed by 30th September 2026. (The Star)

The Malaysian Rubber Glove Manufacturers Association (MARGMA) has clarified that the RM3.60bn loss estimated to have been incurred by Top Glove Corp Bhd due to the import ban under the US Customs and Border Protection's (US CBP) Withhold Release Order (WRO), is actually a cumulative sum from a few affected companies. The figure was arrived at based on various assumptions, but did not elaborate further. (The Edge)

Petronas Gas Bhd (PetGas) incentive-based regulation (IBR) tariff for its Peninsular Gas Utilisation (PGU) facility has been adjusted to RM1.128/GJ through 2022, from RM1.129/GJ. This follows the approval by the Energy Commission for the adjustment, which PetGas said is an annual process under the IBR framework during the three-year Regulatory Period 1 (RP1) from 2020 to 2022. (The Edge)

TCS Group Holdings Bhd has bagged an RM255.0m contract from Remedy Power Sdn Bhd to construct the foundation and main building works of a mixed-use development project in Taman Desa, Kuala Lumpur. The contract is 30 months and will commence in April 2022, with expected completion slated in September 2024. (The Edge)

Alam Maritim Resources Bhd has received a Letter of Award for an RM52.0m contract in respect to the Cendor Pipeline Project by Petrofac Malaysia. The Letter of Award, which is secured by its wholly-owned subsidiary Alam Maritim (M) Sdn Bhd, is for the provision of transportation, installation and pre-commissioning of flexible risers and other appurtenances for Cendor Pipeline project. (The Edge)

OpenSys (M) Bhd has rolled out its Smart CIT secure logistics and cash management solution for Tenaga Nasional Bhd (TNB) to enhance process efficiencies and reduce up to 33.0% in overall processing costs. It targets to complete the rollout of its Smart CIT solution across all 114 TNB retail outlets nationwide in 1Q22. The Smart CIT platform combines conventional CIT services with cutting-edge IoT-based secure logistics solution that provides TNB with a real time dashboard view of critical management information on collection schedules, balancing and reconciliation. (The Edge)

G Capital Bhd 70%-owned unit Solarcity Malaysia Sdn Bhd has been awarded a solar photovoltaic energy generating system contract by two subsidiaries of KSK Group Bhd. The contract involves the construction of two plants in Kota Damansara, Petaling Jaya and Jalan Yap Ah Shak, Kuala Lumpur, with a total capacity of 271 KWp. (The Edge)

Wegmans Holdings Bhd has proposed to undertake a bonus issue of up to 168.8m free warrants on the basis of 1 warrant C for every 4 existing ordinary shares. The move is to reward the company's shareholders for their continuous support by enabling them to participate in a derivative of the company without incurring any costs. This will also provide an opportunity to further increase their equity participation in the company by exercising the warrants at a pre-determined price over the tenure of the warrants. (The Edge)


Source: Mplus Research - 3 Mar 2022

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