Extended sideways trend

Market Review

Malaysia:. The FBM KLCI (-0.1%) edged mildly lower on a lacklustre trading session as intraday gains were quickly negated by weakness in selected plantation and banking heavyweights. Both the lower liners and the broader market ended mixed, but trading interest was building up in construction sector (+1.5%).

Global markets:. Wall Street edged lower as the Dow (-0.3%) fell ahead of the holiday-shortened trading week break amid the mixed bag of corporate earnings. The European stock markets finished mostly higher, while Asia stock markets ended on a mixed note.

The Day Ahead

The FBM KLCI slipped into the negative territory on the back of final hour sell down in the absence of fresh catalysts. Given the foreign funds offloaded some of the equities earlier this week, we expect the local bourse to trade in a negative-biased tone for today. Furthermore, the negative performance on Wall Street overnight could expedite the profit taking activities on the local front. However, the crude oil price traded above USD110 per barrel mark and the FCPO priced above RM6,200 will bring optimism to the plantation and energy stocks. Also, we believe market could be pricing in earlier than expected GE15, hence trading interest should continue to build up within the construction sector.

Sector focus:. We expect the recovery-themed stocks remained as investors’ focus amid the volatile environment. Firmer commodity prices may provide a positive sentiment for the energy and plantation stocks. Also, we expect traders to focus on construction related stocks amid stronger buying interest yesterday.

FBMKLCI Technical Outlook

The FBM KLCI reversed earlier gains in the final trading hour, closing around the SMA20 level. Technical indicators remained mixed as the MACD Histogram continue to trend lower, while the RSI hovered above 50. Resistance is set at 1,600- 1,620, while the support is envisaged around 1,580.

Company Brief

Brahim’s Holdings Bhd (BHB) has submitted an appeal to Bursa Malaysia Securities Bhd against the delisting of its securities. The removal of the securities of the company from the official list of Bursa Securities on 20th April 2022, shall be deferred while pending the decision by Bursa Securities on the appeal which was submitted within the timeframe on 14th April 2022. (The Star)

CCK Consolidated Bhd's unit PT Adilmart has entered into a conditional share sale agreement with the shareholders of PT Bonanza Pratama Abadi for the acquisition of its entire equity interest for US$8.0m (RM33.9m). Indonesia-based PT Bonanza was principally engaged in processing and freezing shrimp for local and export sales. The Proposed Acquisition will be synergistic to CCK’s existing seafood business as well as the business of poultry processing and manufacturing of downstream products such as sausages, patties and meatballs, and as such is expected to complement the CCK Group’s existing activities. (The Star)

Hibiscus Petroleum Bhd clarified that it has not sought to make any submission to any stock exchange for a special purpose acquisition company listing. The company is always considering ways of enhancing shareholder value while also positively positioning the company for a future in which the world will transition to a lower carbon-emitting energy mix. (The Edge)

Malaysia Building Society Bhd (MBSB)-owned MBSB Bank Bhd's inaugural RM300.0m sukuk offering under its dedicated RM5.00bn Sustainability Sukuk Wakalah Programme has received overwhelming demand from investors. The sukuk offering recorded a final order book amounting to RM2.90bn, a strong bid to cover ratio of 10 times. (The Edge)

IHH Healthcare Bhd and investment company Heal Partners are leading a US$15.0m (RM63.4m) Series A round in medical tech start-up Us2.ai. IHH is looking to support and make cutting-edge clinical tools and care more accessible and affordable for patients through its investments in digital health companies. (The Edge)

LPI Capital Bhd’s 1QFY22 net profit fell 25.3% YoY to RM61.5m, on lower investment income and profitability of its wholly-owned insurance subsidiary Lonpac Insurance Bhd. Revenue for the quarter declined 9.8% YoY to RM397.7m. (The Edge)

Carlsberg Brewery Malaysia Bhd has reported that its business in Sri Lanka has been doing well so far and that the group will continue to closely monitor the situation in the country, which is in the midst of an economic crisis. The brewery group holds a 25.0% stake in Sri Lanka's Lion Brewery (Ceylon) Plc, and that operations there have been smooth up to this month. (The Edge)

HB Global Ltd has decided to defer a plan to raise RM23.1m in a private placement of 154.0m new shares or 20.0% of its existing issued shares after having considered the current market sentiment. HB Global’s board of directors has decided to defer the proposed private placement for the time being. (The Edge)

Telekom Malaysia Bhd (TM) has signed an agreement with Digital Nasional Bhd on Thursday relating to their RM2.00bn deal on 5G service. The service agreement follows the term sheet signed by the two parties on 16th December 2021. (The Edge)

FSBM Holdings Bhd's external auditor, Moore Stephens Associates PLT has noted a material uncertainty that may cast a significant doubt on the information and technology service provider's ability to continue as a going concern. The auditor was unable to verify by alternative means the opening balances making up the statements of financial position for the FY20, FY19 and FY18. (The Edge)

Sealink International Bhd independent auditor has raised an uncertainty relating to the offshore marine support vessel operator's going concern in view of the current economic conditions and Covid-19. The auditor, Grant Thornton Malaysia PLT noted that Sealink's financial statement for the year ended 31st December 2021 showed that the group incurred a net loss of RM65.4m. The total current liabilities of the group at RM68.6m exceeded their total current assets at RM8.9m. (The Edge)

Source: Mplus Research - 15 Apr 2022