Drifting further from 1,600

Market Review

Malaysia:. The FBM KLCI (-1.2%) remained downbeat as sentiment was marred by the weakness on the Wall Street overnight, coupled with the prospects of softer economic growth. The lower liners also stayed downbeat, but REITs (+0.1%) sector was the sole bright spot on the broader market.

Global markets:. Wall Street extended its decline as the Dow (-0.3%) trended lower as unemployment rate in April 2022 stood at 3.6%; the lowest since February 2020 may reinforce the US Federal Reserve hawkish stance on interest rate environment. Meanwhile, both the European and Asia stock markets remained downbeat.

The Day Ahead

The FBM KLCI plummeted on Friday in tandem with regional peers on the back of bearish global sentiment following a sharp decline on Wall Street and the net outflow of foreign funds. As the US stocks suffered another selloff, we expect the local bourse to follow suit, especially within the technology sector. Nevertheless, there might be bargain hunting activities ahead of the earnings season especially in the recovery-themed sectors as well as REITs. On the commodity markets, the crude oil price remained above USD112, while the crude palm oil was traded lower to RM6,400.

Sector focus:. We reckon the O&G and recovery themed sector such as consumer and REITs will continue to be supported with buying interest. Besides, the transportation sector may gain traction as the Baltic Exchange Dry Index was at its highest since March 2022. Meanwhile, traders might avoid the technology sector as Nasdaq had another round of selloffs last week.

FBMKLCI Technical Outlook

The FBM KLCI has broken below the daily EMA120 and the 1,580 support level extended losses. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI hovered below the 50 level. Next support is located around 1,550, while the resistance is pegged at 1,570-1,580.

Company Brief

Favelle Favco Bhd has secured 4 contracts worth RM55.0m for the supply of cranes. The 4 contracts are secured from Favelle Favco Cranes Pty Ltd, Favelle Favco Cranes (M) Sdn Bhd and Favelle Favco Cranes (M) Sdn Bhd for the delivery of cranes in 2022. (The Star)

Focus Point Holdings Bhd has proposed to transfer its listing to the Main Market of Bursa Malaysia from ACE Market after meeting the requirements set out in the equity guidelines issued by the Securities Commission and the Main Market listing requirements of Bursa Securities. Focus Point expects to submit its application within 3 months' time and to complete the transfer by 4Q22. (The Star)

KSL Capital Sdn Bhd has emerged as a substantial shareholder of Advanced Packaging Technology (M) Bhd after acquiring 1.2m shares or 6.2%, of the packaging material manufacturer. KSL Capital bought the block of shares on 29th April 2022 via an open market transaction. (The Edge)

Ajiya Bhd has announced its new management with the appointment of a new executive director, managing director (MD) and chief executive officer (CEO) on 6th May 2022. Ajiya has appointed Datuk Seri Chiau Beng Teik as its executive director. Chiau’s son, Chiau Haw Choon, 38, was also appointed to serve as Ajiya’s MD, according to a separate filing. He currently serves and holds several other directorships in Solarvest Holdings Bhd and Signature International Bhd, on top of being the group MD of Chin Hin Group Bhd. Meanwhile, Datuk Chan Wah Kiang, who had resigned as Ajiya’s MD on 5th May 2022, had been appointed to helm the building materials manufacturer as its new CEO. (The Edge)

ECM Libra Group Bhd has reported that the potential listing of TYK Capital Sdn Bhd’s business was considered. ECM holds an effective 8.1% stake in TYK Capital through its 30.0%-owned associate Positive Carry Sdn Bhd. (The Edge)

Matang Bhd plans to raise RM22.6m via a proposed private placement of up to 217.2m shares or 10.0% of its total issued shares at an issue price to be determined later. Of the expected proceeds, RM22.5m has been earmarked to fund acquisitions which include oil palm, durian plantations or additional land bank for the development of new oil palm or durian plantations. (The Edge)

Tan Sri Megat Zaharuddin Mohd Nor has resigned as an independent director of Sapura Energy Bhd to pursue other interests. Accordingly, he has also ceased to be the chairman of the group’s nomination and remuneration committee. Megat Zaharuddin was appointed as independent non-executive director on 27th August 2020, and was subsequently appointed as a senior independent non-executive director on 18th September 2020. (The Edge)

TWL Holdings Bhd’s largest shareholder TWL Capital Bhd has emerged as a substantial shareholder of Sentoria Group Bhd with a 12.2% stake. TWL Capital had acquired 68.0m shares through off market transactions on 5th May 2022. (The Edge)

TechnoDex Bhd has teamed up with Sweden-based Nordic Apiary Holding AB to jointly set up a Malaysia-Nordic-South East Asian value-added distributor (VAD) in Malaysia. The proposed joint venture (JV) is in line with its strategic plan to collaborate with prospective partners to venture into innovation technologies and broaden its services in Southeast Asia. (The Edge)

Source: Mplus Research - 9 May 2022