Another volatile session

Market Review

Malaysia:. The FBM KLCI (-2.0%) extended its losses alongside with regional peers, spooked by the escalating geopolitical tension between Russia and Ukraine yesterday. The lower liners also extended their slide, while all 13 major sectors on the broader market painted in red.

Global markets:. Wall Street languished in red as the Dow (-2.4%) fell on concern over the elevated crude oil prices may add onto the inflationary pressure towards the pace of economic growth as fresh negotiations between Russia and Ukraine yield limited progress. Both the European and Asia stockmarkets closed negative.

The Day Ahead

The FBM KLCI suffered huge losses in tandem with the slump in regional markets, as tensions between Russia and Ukraine continued to shake the market. We expect investors to remain cautious and sentiment is likely to stay negative on the broader market amid heightening concerns over inflationary pressure driven by the ongoing Russia-Ukraine conflict, which will affect the input costs of all goods. At the point of writing, the crude oil price is trading above USD120 per barrel mark, while the CPO price hovered above RM6,500.

Sector focus:. Following the broad-based selloff overnight, we expect the market will remain in the negative bias tone with some mild bargain hunting activities within the commodity-related sectors. Meanwhile, utilities and REIT could be defensive for investors under the volatile market. Note that the technology sector may follow the Nasdaq’s movement which has crossed below the key 13,000 level.

FBMKLCI Technical Outlook

The FBM KLCI took a huge plunge to close below the 1,575 support level as the key index breached below the daily EMA20. Technical indicator turned mixed as the MACD Histogram trended lower, while the RSI fell below the 50 level. The support is now pegged around 1,550-1,565, while the resistance is located at 1,600-1,615.

Company Brief

LKL International Bhd’s wholly-owned subsidiary LKL Advance Metaltech Sdn Bhd (LKLAM) has acquired 250.0m shares, representing a 12.2% stake in Vizione Holdings Bhd for RM20.0m cash. The acquisition was via the subscription of the excess rights shares with free warrants issued pursuant to the renounceable rights issue of new ordinary shares in Vizione (rights shares) on the basis of 1 rights share for every 1 existing ordinary share held in Vizione, together with the free detachable warrants on the basis of 2 warrant for every 2 rights shares subscribed for. The subscription was funded through internally generated funds of the company. (The Star)

Willowglen MSC Bhd’s wholly-owned subsidiary, Willowglen (M) Sdn Bhd has secured a RM32.6m contract from Majubina Resources Sdn Bhd. The contract was for the design, build and transfer infrastructures capable of supporting 37 telecommunication towers at various sites in Sabah. The contract is expected to be completed by 6th December 2022. (The Star)

Tan Sri Dr Lim Wee Chai has ceased to be a substantial shareholder of LBS Bina Group Bhd after disposing of 51.6m shares in the property group. The direct business transaction at 45.0 sen took place on 4th March 2022. (The Edge)

KPJ Healthcare Bhd has issued sukuk wakalah amounting to RM650.0m in nominal value under its RM3.00bn Sukuk Wakalah programme. The issuance of the sukuk wakalah was done on 7th March 2022 via its wholly-owned subsidiary Point Zone (M) Sdn Bhd. Proceeds from the issuance shall be utilised by KPJ to fund amongst others, Shariah-compliant financing activities comprising the expansion, working capital requirements and general corporate purposes of the KPJ group’s healthcare and healthcare-related businesses. (The Edge)

Sarawak Oil Palms Bhd (SOPB) has proposed a bonus issue of up to 303.1m shares on the basis of 1 bonus share for every 2 existing shares held, on an entitlement date to be announced later. (The Edge)

Urusharta Jamaah Sdn Bhd (UJSB), the government's special-purpose vehicle set up to take over Lembaga Tabung Haji's (LTH) underperforming assets, has trimmed its stake in Sarawak Plantation Bhd. UJSB's stake in the plantation company dropped below 5.0%, after it disposed of 266,100 shares on 2nd March 2022. (The Edge)

CB Industrial Product Holding Bhd has terminated the sale of its 70.0% stake in biodiesel producer Gulf Lubes Malaysia Sdn Bhd (GLM) to Kaashi Viswehswara Minerals Pvt Ltd, after the Indian firm failed to pay the balance deposit within time. The palm oil equipment maker had announced the stake sale in GLM for RM55.0m three months ago to resolve the management deadlock at the subsidiary. (The Edge)

Siab Holdings Bhd has inked a memorandum of understanding (MoU) with Koperasi Peserta-Peserta Felcra Malaysia Bhd (KPFB) to undertake a joint development with a gross development value of RM400.0m on freehold Malay reserved lands in Selangor owned by the latter. Siab wholly-owned subsidiary Siab Development Sdn Bhd has inked the MoU with KPFB for the rights to develop the lands, measuring 32,248.3 sqm, which are located in the Gombak district. (The Edge)

Ancom Bhd has proposed a distribution of up to 18.4m shares or a 10.2% stake in Nylex (Malaysia) Bhd to Ancom shareholders by way of dividend-in-specie. The distribution of 1 Nylex share for every 20 Ancom shares held offers shareholders an opportunity to invest directly in Nylex at no cost. Ancom also proposed a share split involving the subdivision of every 1 share into 3 shares. (The Edge)

Samaiden Group Bhd has partnered with Tokyo-listed engineering firm Chudenko Corp to explore opportunities in the renewable energy (RE) sector in the Malaysian and overseas markets. Under a business collaboration agreement, the two companies will jointly invest or participate in a joint venture in RE projects, including rooftop solar energy projects, for Japanese customers and collaborate on the implementation of technologies for the operation and maintenance of RE projects. (The Edge)

Omesti Bhd is expanding its portfolio of healthcare services with the establishment of two strategic joint venture companies (JVCs), leveraging the group’s digitalisation track record. The first JVC with Medical Innovation Ventures Sdn Bhd (Mediven) was established to set up and operate a diagnostic and testing laboratory that performs polymerase chain reaction testing for definitive detection of coronavirus infections, among other services. The second JVC was established with Tree Med Sdn Bhd, a company engaged in the supply of medical and laboratory equipment. (The Edge)

Jerasia Capital Bhd (JCB) has announced that three of its wholly-owned subsidiaries had applied for a judicial management order to facilitate restructuring and regularise their finances. This came as the group had been operating under adverse financial and operational conditions since the outbreak of the Covid-19 pandemic. (The Edge)

Source: Mplus Research - 8 Mar 2022