Slightly above 1,600 on early festive cheer

Market Review

Malaysia:. The FBM KLCI (+0.2%) extended its lead to close marginally above 1,600 ahead of the extended weekend festive break to trim its weekly losses at -0.1% WoW. The lower liners, however, ended mixed, while the broader market closed mostly higher, anchored by the energy sector (+2.5%).

Global markets:. Wall Street edged higher as the Dow (+2.8%) advanced for the third session, after US Federal Chairman Jerome Powell signals that a bigger than 50 basis points hikes are not on the table for subsequent meetings. The European stock markets ended negative, while Asia stock markets closed mostly lower.

The Day Ahead

The FBM KLCI surpassed the 1,600 level prior to the long weekend as investors took cue from the positive performance on Wall Street. As the US Federal Chair eased the concern over a more aggressive rate hikes outlook, we foresee the big surge on Wall Street overnight may spill over to the stocks on the local front. Despite the worries of the Covid-19 lockdown in China would slowdown the economic growth, we believe the elevated commodity prices may provide support for the respective sector at least for the upcoming reporting season. The CPO price has surged past RM7,100, while the crude oil remained firm above USD110; the latter rose as EU may potentially ban imports of crude oil from Russia.

Sector focus:. We are positive on the plantation sector amid the elevated CPO price as well as the export ban in Indonesia and the positive momentum on crude oil price may provide support to the energy sector. Following the sharp gains on Wall Street, investors may favour the technology sector.

FBMKLCI Technical Outlook

The FBM KLCI extended gains and closed above the key 1,600 level. Technical indicators were mixed as the Histogram has turned negative, while the RSI is above 50. Should the key index hold above 1,600, next resistance is envisaged at 1,620, while the support is located at 1,570-1,580.

Company Brief

Trading of the securities of Serba Dinamik Holdings Bhd will resume on 9th May 2022. Accordingly, trading in the structured warrants relating to Serba Dinamik will also resume at the same time. Trading of Serba Dinamik’s shares has been suspended since 22nd October 2021. (The Star)

Samaiden Group Bhd’s wholly-owned subsidiary, Samaiden Sdn Bhd (SSB), has accepted a letter of award from Heliosel Sdn Bhd in relation to the development of a SelfConsumption (SelCo) solar photovoltaic plant in Selangor. The RM32.9m engineering, procurement, construction and commissioning works award was accepted by SSB on 21st April 2022, while Heliosel’s approval to announce was obtained on 28th April 2022. (The Star)

Bank Negara Malaysia (BNM) has announced the 5 successful applicants of digital bank licences,. The five are: (i) a consortium of Boost Holdings Sdn Bhd (owned by Axiata Group Bhd) and RHB Bank Bhd, (ii) a consortium led by GXS Bank Pte Ltd and Kuok Brothers Sdn Bhd, (iii) a consortium led by Sea Ltd and YTL Digital Capital Sdn Bhd (a subsidiary of YTL Corp Bhd), (iv) a consortium of AEON Financial Service Co Ltd, its subsidiary AEON Credit Service (M) Bhd and MoneyLion Inc and (v) a consortium led by KAF Investment Bank Sdn Bhd. (The Edge)

Sapura Energy Bhd has announced the appointment of Datuk Mohammad Azlan Abdullah as its new chairman effective 7th May 2022. He succeeds outgoing chairman Tan Sri Shamsul Azhar Abbas, who is retiring on the same day, upon reaching the age of 70. (The Edge)

Digi.Com Bhd's 1QFY22 net profit dropped 10.8% YoY to RM236.2m, as revenue declined on lower prepaid segment income and higher effective tax rate at 33.0%, from 24.0% due to the implementation of Malaysia's one-off Prosperity Tax for 2022. Revenue for the quarter fell 1.9% YoY to RM1.52bn. A first interim tax-exempt dividend of 2.9 sen a share was announced. (The Edge)

Pestech International Bhd announced that its subsidiary CRSE Sdn Bhd is assisting in the Malaysian Anti-Corruption Commission's investigation of a corruption case related to the Mass Rapid Transit 2 (MRT2) project. This refers to various media reports on the investigation by the MACC into alleged corruption by 2 engineering firms involved in the MRT2 project. CRSE is currently executing the power supply and distribution system (PSDS) package for MRT2. (The Edge)

Gadang Holdings Bhd has secured subcontract works valued at RM90.4m for Central Spine Road, Pakej 2. The contract from Binary Vista Sdn Bhd was to undertake pavement and road furniture works for the new highway. (The Edge)

Eco World Development Group Bhd’s wholly-owned Hasrat Budi Sdn Bhd is suing Entomo Malaysia Sdn Bhd, Raveenderen Ramamoothie and MYSJ Sdn Bhd, the operator of the MySejahtera application for allegedly failing to meet specific performance of a put option. (The Edge)

Fitters Diversified Bhd has bagged sub-contract works amounting to RM9.3m from Zalam Corp Sdn Bhd to provide fire protection services. The works entails the supply and install fire protection services, complete with testing and commission, as well as maintenance. (The Edge)

Source: Mplus Research - 5 May 2022