Market Review

Malaysia:. The FBM KLCI (+0.2%) recovered some of its previous session losses on signs of easing trade tension between US and China yesterday. The lower liners, however, extended their losses, while the broader market ended mostly higher, led by the REITs sector (+0.9%).

Global markets:. US stockmarkets ended mixed as the Dow (-0.4%) remained in the red despite coming off from its intraday low, while both the S&P 500 (+0.2%) and Nasdaq (+1.8%) advanced on gains in technology shares. The European stock markets were downbeat, while Asia stock markets closed mixed. The Day Ahead The FBM KLCI staged a late-day rebound on the back of mild bargain hunting activities. Nevertheless, we expect investors to stay sidelines amid the heightened inflationary pressure and lack of fresh catalysts environment. Meanwhile, all eyes will be on the monetary policy meeting and BNM’s interest rate decision today. Brent crude oil plummeted to trade near USD100-105 a barrel as concerns over recession weighed on price. The CPO price tumbled below RM4,100 as Indonesian supplies are set to flood the market amid rising export permits.

Sector focus:. With the Nasdaq rebounded the strongest overnight, we believe buying support to spillover to the tech sector on our local front. Also, traders may favour the banking stocks ahead of the MPC meeting. Besides, we reckon traders are likely to avoid the energy and plantation sectors amid the declining commodity prices. Nevertheless, construction related stocks might trade positively on the back of the news on EKOVEST taking over EPC job in RTS Link project.

FBMKLCI Technical Outlook

The FBM KLCI booked marginal gains after a final-hour rebound. Technical indicators remained mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. Resistance is located along 1,460-1,480, while the support is set at 1,400-1,420.

Company Brief

Ekovest Bhd wholly-owned subsidiary, Ekovest Construction Sdn Bhd (ECSB) has secured a RM1.98bn contract from Malaysia Rapid Transit System Sdn Bhd (MRTS) to undertake the construction of the Johor Bahru to Singapore Rapid Transit System Link Rail (RTS Link Project). The RTS Link Project consists of a railway shuttle link of approximately 4km (Malaysia: 2.7km and Singapore: 1.3km) with two stations, one in Bukit Chagar, Johor Bahru and one in Woodlands, Singapore. (The Star)

CEKD Bhd has entered into a share purchase agreement (SPA) with Tham Choon Sarn for the acquisition of an 82.0% stake in Worldwide Die Cutting Mould Sdn Bhd for RM6.2m. Worldwide is principally engaged in all kinds and types of mould, tools and dies and other related activities. The proposed acquisition will be funded by internally generated funds from the current business operations of the company.

Separately, CEKD has entered into a share sale agreement with Yap Wan Lee And Wong Hur Shiaw for the acquisition of 480,000 ordinary shares, or 60.0% stake in KIT Technology Sdn Bhd for RM720,000. KIT Technology is principally engaged in the manufacturing of die-cut moulding and other related moulding activities. (The Star)

MN Holdings Bhd secured a RM26.9m underground utilities contract in Kulim Hi Tech Park, Kedah after its unit Mutu Nusantara Sdn Bhd accepted a letter of award from Pembinaan Tajri Sdn Bhd to be the subcontractor of the project, which is expected to be completed in August 2023. Under the contract, Mutu Nusantara will provide horizontal directional drilling construction works for the installation of 132kV power cables and fibre optic cables to connect a multinational corporation's high-end integrated circuit substrates manufacturing facility to a new gas insulated substation. (The Edge)

DRB-HICOM Bhd's 50.1%-owned Proton Holdings Bhd targets to resolve 90,000 units of outstanding orders for its vehicles by 1Q23 following a booking surge in the final week before the sales and services tax (SST) exemption ended. Its new engine assembly line in Tanjung Malim, Perak, operational from April 2022 is capable of producing 180,000 units of three-cylinder 1.5 turbo gasoline direct injection engines a year for local and export markets. (The Edge)

Capital A Bhd has entered into a wet lease agreement, effective from 1st July 2022 to 31st October 2022, with AirAsia X Bhd for the former to lease an Airbus A330- 343 aircraft with complete crew, maintenance and insurance. Capital A will pay a total estimated consideration of US$3.8m (RM16.9m), exclusive of 6.0% SST, for the leasing of the aircraft. (The Edge)

MMAG Holdings Bhd is selling a 4,777-sqm land located in Hicom Glenmarie Industrial Park in Shah Alam, Selangor, together with a two-storey warehouse and three-storey office building on it, for RM20.2m cash to KGW Logistics (M) Sdn Bhd. The deal is expected to be completed in 4Q22 and proceeds from the disposal will be mainly used for working capital, repayment of borrowings and to fund any future expansion. (The Edge)

Newly listed Orgabio Holdings Bhd made a firm debut on the ACE Market to end the day at 34 sen (+9.7%). Orgabio intends to further expand its customer base in the direct selling segment by securing more local and overseas direct selling companies as new customers. (The Edge)

Source: Mplus Research - 6 Jul 2022