Defending 1,600

Market Review

Malaysia:. The FBM KLCI (-0.9%) endured another volatile session alongside with the regional markets amid the escalating geopolitical tension between Russia and Ukraine. The lower liners were also downbeat, while the REIT sector (+0.1%) was the sole outperformer on the broader market.

Global markets:. Wall Street remained choppy as the Dow (-0.5%) fell on possible import sanctions of Russia crude oil, while the solid unemployment data that fell to 3.8% in February 2022 bolstered the prospect of interest rate hike next week. Both the European and Asia stockmarkets ended in the red.

The Day Ahead

The local bourse traded in the negative tone on Friday as the FBM KLCI reversed into losses as geopolitical tension between Russia and Ukraine persisted. We expect to see volatile trading movements on the local bourse at least for the near term given the on-going developments in the Russia and Ukraine region. With the market pricing in the embargo risk on Russian oil, the Brent oil has gapped up this morning and traded towards USD138 region, while FCPO could follow suit and remain firm above RM6,000 level.

Sector focus:. We expect trading interest to emerge within the O&G sector following the plunge on Friday as crude oil price shot up above USD120. Meanwhile, the plantation stocks could return in focus as we expect a rebound in CPO price. Also, metal-related commodities are likely to trend higher following the embargo risk on Russia, may translate to rally mode in the building materials sector.

FBMKLCI Technical Outlook

The FBM KLCI pared gains from the previous sessions but remained supported above the critical 1,600 level. Technical indicators, however, remained positive as the MACD Histogram has extended a positive bar, while the RSI hovered above the 50 level. The resistance is now pegged around 1,615, while the support is located at 1,600, followed by 1,575.

Company Brief

Opensys (M) Bhd has proposed to transfer its listing from the ACE Market to the Main Market of Bursa Malaysia by 3Q22. The proposed listing transfer signifies the growth, profitability and financial strength of the group as it has met the profit track record requirements for a transfer to the Main Market. The group has achieved an audited consolidated profit after taxation attributable to the owners of the company (PATMI) of approximately RM11.1m for FY20 and an aggregate consolidated PATMI of approximately RM32.3m for the past three audited FY18 to FY20. (The Star)

KKB Engineering Bhd and its subsidiary have received contracts with a combined value of about RM23.7m. The group have received a letter of award from the Kuching Water Board for diversion works of the existing 100mm N.D. MSCL Pumping Mains at Sg. Maong Paroh, Jalan Matang/Batu Kawa, Kuching Division. The other contract from Malaysia Marine and Heavy Engineering Sdn Bhd (MMHE) is for the provision supplies and services to carry out piles fabrication, loadout and sail away for the SK408W Jerun A CPP Jacket. The Kuching Water Board contract is to be executed over a period of 12 months while the MMHE job will take place between February 2022 to February 2023. (The Star)

CTOS Digital Bhd subsidiary, CTOS Data Systems Sdn Bhd has denied that it blacklists anyone, reporting that it merely consolidates and provides credit information of consumers' payment behaviour obtained from public and proprietary data sources and its subscribers to lenders and credit grantors. This was in response to a remark attributed to Yayasan My First Home chairman Tan Sri Vincent Tan during the launch of the foundation that about half of those who were allotted a low-cost affordable house were unable to get financing due to poor credit ratings and being blacklisted by credit agencies. (The Edge)

Paramount Corp Bhd has finally revealed its digital banking plans which include same-day loan disbursement and banking product embedment with property transactions, as applications for Bank Negara Malaysia's (BNM) five digital banking licences enter their final stage of approval. (The Edge)

YNH Property Bhd has made its issuance of sukuk wakalah amounting to an aggregate RM323.0m in nominal value on 28th February 2022 under its Islamic Medium-Term Notes (IMTN) programme (sukuk wakalah programme) of up to RM700.0m in nominal value. Proceeds raised from the issuance will primarily be utilised for the repayments of existing borrowings to unencumber secured properties as well as defray fees, costs and expenses in relation to the issuance. The remainder of the proceeds will be used for capital expenditure and investments, working capital, refinancing existing borrowings, general corporate purposes, and inter-company advances. (The Edge)

Fitters Diversified Bhd unit has accepted a letter of intent (LoI) amounting to RM15.3m from Syarikat Pembinaan Yeoh Tiong Lay Sdn Bhd (YTL Construction) for the provision of fire protection services. The LoI dated 1st March 2022 also include a provisional sum of RM4.0m. (The Edge)

Al-Salam Real Estate Investment Trust (REIT) and Al-A'qar Healthcare REIT have appointed Johor State Treasury’s Financial Officer Datuk Salehuddin Hassan as their non-independent and non-executive directors with effect from 4th March 2022. (The Edge)

Uzma Bhd unit, Uzma Engineering Sdn Bhd (UESB) had received an arbitration notice on 1st March 2022 over a disputed amount of US$1.1m pursuant to the Kinabalu Non-Associated Gas (KNAG) development project. The notice, under the Singapore International Arbitration Centre Rules 2016, was issued by Messrs Zaid Ibrahim & Co on behalf of its client KHAN Co Ltd. (The Edge)

Top Builders Capital Bhd wholly-owned subsidiary Ikhmas Jaya Sdn Bhd (IJSB) has been served with a default judgment for failing to settle the outstanding amount for the rental of tugships and cranes as well as barge delivery services. Top Builders is required to pay to the plaintiff (i) RM14,065.85 for the balance rental for hiring the vessel to support the tugboats for the period from 15th July 2019 to 18th July 2019, (ii) RM7,000 for the service charges for the delivery of the barge from Penang to Lumut on 24th July 2019 (iii) RM625 for rental charges for hiring a crane for the period from 3rd August 2022 to 15th August 2019, (iv) default interest on the total amount of RM21,690.85 at the rate of 1.5% on a monthly basis calculated from July 2020 until the date of full settlement and (v) costs amounting to RM887.30. (The Edge)

Source: Mplus Research - 7 Mar 2022