Back into consolidation

Market Review

Malaysia:. The FBM KLCI (-1.1%) was bogged down by emergence of profit taking activities and more than two-thirds of the key index components ended in red. The lower liners remained mixed, while the broader market ended closed mostly negative with the energy sector (-1.6%) underperformed.

Global markets:. Wall Street edged lower as the Dow (-0.5%) fell after the buoyant ISM Manufacturing PMI that rose to 56.1 in May 2022 fuelled further concerns over the pace of tightening from the US Federal Reserve. The European stock markets remained downbeat, while Asia stock markets ended mixed.

The Day Ahead

On the first day of June, the FBM KLCI surrendered big gains from the previous session as global inflationary pressure remains a concern which may derail the economic recovery. Investors may trade cautiously following the overnight decline on Wall Street. Nevertheless, traders are likely to lookout on selected technology stocks with solid balance sheet and growing quarterly results (at least positive QoQ growth). On the commodity markets, the crude oil was traded around USD116 per barrel mark, while the CPO is trading above RM6,300.

Sector focus:. We believe the energy sector may continue to shine amid firm crude oil price, driven by the Ukraine-Russia tension as well as the easing in China may boost demand. Besides, traders could focus on consumer, property and transportation & logistics stocks as they are gaining momentum yesterday.

FBMKLCI Technical Outlook

The FBM KLCI reversed its gains and closed just around the 200-day moving average on the back. Technical indicators turned mixed as the MACD Histogram has extended a positive bar, while the RSI dipped below the 50 level. The next support level is located 1,530, followed by 1,500, while the resistance is set around 1,570-1,580.

Company Brief

Sapura Energy Bhd has triggered the criteria pursuant to Paragraph 2.1(e) of Practice Note No. 17 (PN17) of the Main Market Listing Requirements of Bursa Securities. Bursa Malaysia Securities would continue to monitor Sapura Energy’s progress in respect of its compliance with the listing requirements. (The Star)

YTL Power International Bhd has completed the acquisition of Tuaspring Pte Ltd’s 396.0-MW combined cycle gas turbine power plant in Singapore. The original purchase consideration of S$331.5m, which was to be settled via a combination of cash, together with shares and shareholder loans in the holding company of YTL PowerSeraya, was reduced to a pure cash consideration of S$270.0m on completion. (The Star)

Perak Transit Bhd has appointed edotco Malaysia Sdn Bhd to provide services related to in-building and telecommunication solutions in buildings and land owned or managed by the Ipoh-based company’s subsidiaries. The strategic alliance agreement with edotco was to build, erect, install, construct, maintain and operate the relevant in-building solutions and/or any other telecommunication solutions and structures. (The Star)

Tenaga Nasional Bhd (TNB) through its New Energy Division is striving to future proof its business by expanding its renewable energy (RE) footprint globally through mergers and acquisitions, asset development and establishing strategic partnerships with leading RE players. Its portfolio of RE assets in the United Kingdom and Europe is currently being operated and managed by its unit Vantage RE Ltd. (The Edge)

Top Glove Corp Bhd has announced that the Group’s Managing Director Datuk Lee Kim Meow will be redesignated as Non-Independent Non-Executive Director effective 1st August 2022, upon completing his employment contract with the company on 31st July 2022. Executive Director Lim Cheong Guan will be succeeding Lee. Meanwhile, in line with the Board’s succession planning, Ng Yong Lin, presently the Chief Operating Officer (COO), will be appointed as Executive Director of Top Glove effective 1st August 2022. (The Edge)

Comintel Corp Bhd has reported that its white knight, JT Conglomerate Sdn Bhd (JTC) will subscribe to a smaller stake of 56.5% in the company from 72.5% envisioned previously, following a proposed revision to the regularisation plan announced by the company. Under a supplemental subscription agreement, JTC will now subscribe to 145.0m new shares for RM11.6m. Combined with another 71.1m Comintel shares that JTC plans to acquire from a group of vendors, JTC’s stake in Comintel will be at 56.5%. (The Edge)

Pecca Group Bhd has appointed Foo Ken Nee as its chief executive officer. Foo was Pecca’s chief financial officer from January 2019 till May 2021, before joining Tropicana Corp Bhd's subsidiary company Tropicana Golf & Country Resort Bhd as the executive director, in which he was responsible for new business development, strategic operations and financial management involving multiple industry sectors. (The Edge)

Dutch Lady Milk Industries Bhd has cautioned that more price hikes could be on the horizon for consumers as cost inflation leaps. The dairy product manufacturer is facing industry-wide headwinds such as the global supply chain disruption, unprecedented global inflation and raw material price volatility. (The Edge)

TA Global Bhd has received the construction approval for the Sri Damansara Sentral MRT link bridge, marking tremendous progress in strengthening the accessibility of Damansara Avenue, the developer’s 48.0-acre master plan in Bandar Sri Damansara. (The Edge)

GIIB Holdings Bhd has delayed the appointment of an independent audit firm to look into suspicious transactions flagged by its previously terminated but now reinstated director. Separately, the group announced the immediate cessation of office by Tai Qi Yao, the son of, and alternate director to, CEO Tai Boon Wee. Qi Yao held the executive role since 1st April 2016. (The Edge)

QES Group Bhd has proposed a transfer of listing to the Main Market of Bursa Malaysia as it deemed to have met the requirements for the transfer of its listing to the Main Market as set out in the equity guidelines issued by the Securities Commission Malaysia. (The Edge)

TDM Bhd is exploring new development of cash crops, namely chilli, at Ladang Tayor. The project in collaboration with the Kuala Langat Area Farmers Organisation (PPK) is in line with the State government’s plan to intensify the local agriculture sector and food industry. (The Edge)

Source: Mplus Research - 2 Jun 2022