Resumption of rebound

Market Review

Malaysia:. The FBM KLCI (+0.8%) jumped to close higher, driven by gains in selected Petronas-related and plantation heavyweights. The lower liners also rebounded, while all 13 major sectors on the broader market ended positive, led by the energy sector (+4.01%) as crude oil prices rallied on tighter supplies.

Global markets:. US stock markets erased all their intraday gains as the Dow (- 0.7%) fell after Apple unveiled their plans to slow hiring and cut capex in certain divisions to cushion the potential economic slowdown in 2023. The European stock markets extended their lead, while Asia stock markets closed mostly higher.

The Day Ahead

The FBM KLCI managed to rebound and recouped its losses from the past week, riding high on upbeat performances from the regional markets and Wall Street overnight. With foreign investors turning net buyers (5-day net foreign fund inflow:. RM53.7m), traders may expect a mild extension of the rebound on the severely oversold local equities market. Nevertheless, gains might be capped by challenging business operating environment on the back of heightened inflation pressure. On the commodity markets, the crude oil price rose above USD106 per barrel mark, while the CPO price traded above RM4,000.

Sector focus:. The energy sector should be focused amid rising Brent oil price. On the other hand, the downstream plantation companies may face challenges on margin as government is targeting a reduction in cooking oil retail price in the near term amid falling FCPO price. Meanwhile, profit taking activities may emerge within the technology sector as Nasdaq reversed its gains overnight.

FBMKLCI Technical Outlook

The FBM KLCI crossed above its daily EMA9 level. Technical indicators were mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. Should the key index breached above the 1,430 level, next resistance is located at 1,450-1,460; support is pegged along 1,380-1,400.

Company Brief

Southern Cable Group Bhd’s wholly-owned subsidiary Southern Cable Sdn Bhd has secured a contract from Tenaga Nasional Bhd (TNB) to supply RM293.8m worth of underground cables and conductors to the utility giant. The group’s largest contract to-date entails Southern Cable delivering low and medium voltage underground cables and conductors to TNB’s distribution network division over a one-year period from July 2022, with the option of a one-year extension. (The Star)

MN Holdings Bhd (MNHB) wholly-owned subsidiary MN Power Transmission Sdn Bhd in joint venture with Savelite Engineering Sdn Bhd has secured a RM26.9m contract for the engineering, procurement, construction and commissioning (EPCC) of an interconnection facility for a large-scale solar photovoltaic (LSSPV) plant and 132kV substation in Chuping, Perlis. The EPCC contract shall commence immediately and be completed on 30th September 2023. (The Star)

Bioalpha Holdings Bhd's wholly-owned subsidiary, Bioalpha (Hainan) Development Ltd has entered into a collaboration agreement with Gaolin Village Council to jointly develop Gaolin Village in Hainan Province, China, to be named Malaysian Agricultural Hub. The hub will be spearheaded by Bioalpha and entail the construction of a factory complex consisting of 30 units of factories. (The Star)

IJM Corp Bhd has proposed an inaugural RM360.0m nominal value sukuk murabahah to be issued under an Islamic medium term notes programme based on the Shariah-principle of murabahah. This was following a subscription agreement signed between IJM Corp's wholly-owned subsidiary Fairview Valley Sdn Bhd with CIMB Investment Bank Bhd and CIMB Islamic Bank Bhd. (The Edge)

7-Eleven Malaysia Holdings Bhd is weighing exiting its pharmacy chain Caring Pharmacy Group Bhd. The company could seek a valuation for the retailer of about RM1.78 bn in a deal. (The Edge)

Malayan Banking Bhd (Maybank) has received an "AA" rating from MSCI ESG Ratings for the second consecutive year. The leadership rating of "AA" places it among the top 36.0% of 189 diversified banks rated globally based on the MSCI ACWI Index (All Country World Index), of which only 4.0% achieved the highest rating of "AAA". (The Edge)

Ancom Nylex Bhd’s 4QFY22 net profit surged 330.2% YoY to RM31.9m, mainly on improved sales performances by its industrial chemicals and agricultural chemicals divisions. Revenue for the quarter grew 26.8% YoY to RM565.5m (The Edge)

ECM Libra Group Bhd deputy chairman Datuk Lim Kian Onn, who launched a mandatory general offer (MGO) in May 2022, had not received sufficient valid acceptances for him to control over 50.0% of the group’s voting shares when the offer closed on 18th July 2022. At market close, Lim and persons acting in concert with him held in aggregate a 41.9% stake in the group. The MGO is conditional upon the offeror receiving valid acceptances, that resulted in him controlling over 50.0% of the shareholding. (The Edge)

Malaysian Genomics Resource Centre Bhd (MGRC) has appointed HLB Ler Lum Chew PLT as its external auditor for the financial year ended 30th June 2022, after the resignation of Crowe Malaysia PLT last month as the company's auditor. Crowe resigned as its term had exceeded a period of five years. (The Edge)

Scomi Group Bhd and RC Asia Engineering Sdn Bhd (RCA), a privately-held railway track specialist, have mutually agreed to discontinue their joint venture after the agreement lapsed on 15th July 2022. Delays in commencement of the tenders of potential projects are part of the reasons for the JV being scrapped. (The Edge)

Bina Darulaman Bhd (BDB) has appointed Mohd Iskandar Dzulkarnain Ramli as president and chief executive officer with effect from 18th July 2022. Mohd Iskandar first joined the company in 2014 as head of group corporate planning and enterprise risk management and was appointed as chief operating officer in 2018. (The Edge)

Integrated Logistics Bhd, which has changed its name to ILB Group Bhd has reported that the company’s shares will be traded and quoted under the new name with effect from 9.00am on 19th July 2022. (The Edge)

Source: Mplus Research - 19 Jul 2022