Downward pressure uneased

Market Review

Malaysia:. The FBM KLCI (-1.1%) started off the week on a dour note as selling pressure remains largely in the picture. The lower liners also extended their slide, while all the 13 major sectors on the broader market ended in red with the energy sector (-3.9%) taking the worst hit after crude oil prices tumbled last Friday.

Global markets:. Wall Street was closed in conjunction with the Juneteenth public holiday, whilst futures markets edged higher. The European stock advanced after being boosted by bargain hunting activities in beaten down banks, energy and travel & leisure sectors, but Asia stock markets ended mixed.

The Day Ahead

The FBM KLCI extended losses amid mixed performance on regional bourses amid global recession worries. However, we believe stocks on the local bourse are oversold and could be due for bargain hunting opportunities, but overall market sentiment should remain challenging in the near term on the back of prospect of few more rounds of rate hikes; thus, the rebound might be short-lived. The crude oil price has declined after hitting the range around USD121 and hovering around USD115 due to recession concerns, while the CPO traded around RM5,000 as market could be expecting a normalising supply following Indonesia’s strategy to speed up shipments and lifting the ban on exports last month.

Sector focus:. We believe the technology sector is set to rebound on as Wall Street futures are turning green at this juncture. Meanwhile, we opine that REITs and solid consumer stocks may be seen as defensive in nature and garner trading interest at least for the near term.

FBMKLCI Technical Outlook

The FBM KLCI breached below the immediate support at 1,450 after the whole stretch of selling pressure. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI continues to thread below 30. Next support level is at 1,430, while the resistance is pegged along 1,476-1,500.

Company Brief

Sime Darby Property Bhd (SDP) registered a total of RM637.0m gross development value (GDV) worth of sales bookings during its Raya Yang Dinantikan 2022 campaign, which ran from 15th April 2022 to 31st May 2022. The healthy sales bookings recorded during the campaign was achieved through a good mix of residential, commercial, and industrial properties, with over 60.0%. Throughout the campaign, SDP offered a sales package, which included memorandum of transfer Stamp Duty waiver and exclusive gifts for purchasers. The company’s website also experienced a 12.5% increase in unique visitors during the campaign period. (The Star)

Uzma Bhd’s wholly-owned foreign subsidiary, MMSVS Group Holding Co Ltd Thailand has secured a US$10.0m contract from companies of PTTEP Group for the provision of hydraulic workover unit (HWU) services. The contract was for a period of three years and the contract was issued to MMSVS on 25th May 2022. The duration of the contract is for 3 years on a callout basis where the services shall be provided upon PTTEP’s written callout notice. (The Star)

Kelington Group Bhd’s wholly-owned subsidiary, Kelington Engineering (Shanghai) Co Ltd has secured a contract from the largest semiconductor foundry in China worth RM62.0m to perform gas hook up works in Shanghai, China. The gas hook up works will commence in June 2022 and will be completed by March 2023. (The Star)

Caely Holdings Bhd founder Datin Fong Nyok Yoon has lodged a police report against the lingerie maker’s board of directors for the dissemination of alleged false and misleading information on Bursa Malaysia regarding the appointment of Datuk Jovian Mandagie and Sandraruben Neelamagham as board members. Fong lodged the police report on 17th June 2022, following Mandagie’s revelation earlier the same day that his appointment as the group’s executive vice chairman was false as he did not agree to accept it. (The Edge)

Kerjaya Prospek Group Bhd has bagged a contract from Bangsar Hill Park Development Sdn Bhd for a residential development project in Kuala Lumpur worth RM154.7m. The contract comprising works for the main building of the development at Lorong Maarof. The project will commence on 15th July 2022 and be completed within 35 months from the commencement date. (The Edge)

Tuju Setia Bhd's wholly-owned Pembinaan Tuju Setia Sdn Bhd has secured a construction contract worth RM257.0m for a mixed project in Kajang, Selangor. The contract, which was awarded by Daksina Harta Sdn Bhd, involves the construction of 2 blocks of serviced apartments (1,605 units) and two-storey retail shop lots (20 units), as well as one block of car park podium and related facilities at Lot 100961 Seksyen 9, Jalan Cheras in Kajang. (The Edge)

Source: Mplus Research - 21 Jun 2022