Profit taking emerged

Market Review

Malaysia:. The FBM KLCI (-0.5%) halted a four-day winning streak as profit taking took precedence after two-thirds of the key index components retreated yesterday. The lower liners also staged a pullback, while the REIT sector (+0.1%) that is defensive in nature outperformed the negative broader market.

Global markets:. Wall Street turned volatile as the Dow (-1.2%) fell after job openings in June 2022 fell to nine-month low, while arrival of Nancy Pelosi at Taiwan stoked geopolitical tensions between the US and China. The European stock markets were downbeat, while the Asia stock markets closed mostly red.

The Day Ahead

The FBM KLCI slipped on Monday alongside with the regional bourses as profit taking activities emerged following a negative cue from Wall Street. The global markets may see an uneven recovery as investors weighed the escalating US-China tension and some hawkish comments from several Fed officials, which cause a surge in bond yields as investors priced in more interest rate hike. Nevertheless, we believe continuous buying from the foreign funds will support the local bourse. On the commodity markets, the Brent oil was traded above USD100, while the CPO fell below the crucial support of RM4,000.

Sector focus:. Given the Fed officials are turning slightly hawkish, traders may avoid technology stocks for the near term. However, we expect the defensive REIT sector may outperform ahead of the results this month coupled with the renewed market uncertainties. On the commodity related sectors, the energy and plantation sectors may see further selling pressure amid weaker underlying Brent oil and CPO prices.

FBMKLCI Technical Outlook

The FBM KLCI snapped four-session winning streak as the key index retreated below the psychological 1,500 level. Technical indicators, however, remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above 50. Resistance is at 1,500-1,530, while the support is set along 1,450-1,460

Company Brief

Chin Hin Group Bhd, which received an unusual market activity (UMA) query from Bursa Malaysia earlier, has reported that it is unaware of any reason for the sharp rise in its share price recently. In a reply to the UMA query, Chin Hin is not aware of any corporate development relating to the group’s business and affairs, except for its proposed 1-for1 bonus issue announced on 22nd April 2022 and disposal of shares in Solarvest Holdings Bhd. (The Star)

Aneka Jaringan Holdings Bhd and Samaiden Group Bhd have entered into a partnership to create new revenue streams via the engineering, procurement, construction and commissioning (EPCC) of solar photovoltaic (PV) systems and power plants in Indonesia. The joint venture will provide Samaiden access to the Indonesian market and allow Aneka Jaringan's Indonesian subsidiary to add to its value chain in a fast-growing segment. Aneka Jaringan and Samaiden will hold 45.0% and 50.0% stakes in the JV company respectively with the remaining 5.0% subscribed by Aneka Jaringan's business partner in Indonesia. (The Star)

Malaysian Genomics Resource Centre Bhd (MGRC) has been slapped with an unusual market activity (UMA) query by Bursa Malaysia following a sharp fall in its share price, losing 30 sen or 29.7% to end the day at 71 sen. (The Edge)

Majuperak Holdings Bhd has struck a deal to acquire a substantial stake in 2 property management companies as part of a plan to regularise its financial condition and turn the group around. It signed a share sale agreement (SSA) with sellers, namely Cheong Mee Yoke, Teoh Oo Seng and Tan Keng Heng, to acquire 49.0% equity interest in Allied Group Property Services Sdn Bhd (AGPS) and Allied Group Property Services (Penang) Sdn Bhd (AGPSP) for RM9.8m cash. (The Edge)

Sapura Energy Bhd has been awarded a 2-year extension of a charter and service contract by Petrobras in Brazil worth RM580.0m. The contract was awarded to Sapura Navegação Marítima S.A, a wholly-owned subsidiary of Seabras Sapura Participações S.A, a joint venture company between Sapura Offshore Sdn Bhd and Seabras Serviços De Petroleo S.A. (The Edge)

Advancecon Holdings Bhd has secured a RM17.2m subcontract for the provision of earthworks and civil engineering services over an eight-month period. Advancecon wholly-owned subsidiary, Advancecon Infra Sdn Bhd has secured the subcontract from KEB Builders Sdn Bhd for the preliminaries, site clearance and earthworks, geotechnical works, erosion sediment and control plan services. (The Edge)

Dataprep Holdings Bhd has won a RM5.4m award from MYTV Broadcasting Sdn Bhd to set up and provide managed services for the transmission system of digital TV infrastructure. Its wholly owned subsidiary, Solsis (M) Sdn Bhd has accepted the letter of award for the project from MYTV for the design, supply, delivery, installation, testing and commissioning, inclusive of managed services, for the transmission system of digital TV infrastructure at Gunung Telapak Buruk and TM Exchange Kangar. (The Edge)

LPI Capital Bhd’s 2QFY22 net profit dropped 32.4% YoY to RM56.8m, as the general insurer incurred higher claims by policyholders and a lower gross-earned premiums and investment income. Revenue for the quarter fell 5.5% YoY to RM397.1m. A first interim dividend of 25.0 sen a share, payable on 25th August 2022 was declared. (The Edge)

Industronics Bhd has secured US$1.00bn in funding from China’s state-owned investment holding company, State Development & Investment Corp Ltd (SDIC), for collaboration on asset management and capital market services. Industronics has entered into a deal with SDIC for collaboration on asset management and capital market services, in line with its plans to acquire 10.0% of Hong Kong-based renowned stockbroking, asset management and credit firm Bluemount Financial Group Ltd. (The Edge)

Dagang NeXchange Bhd's (DNeX) subsidiary Ping Petroleum UK plc will set up a joint-venture company (JVCo) with Cerulean Winds Ltd to deliver a dedicated offshore floating wind turbine for the Avalon development in the Central North Sea, the UK. The turbine will power the Sevan Hummingbird floating production storage and offloading (FPSO) vessel acquired by Ping in July 2022. (The Edge)

MQ Technology Bhd has inked a memorandum of understanding (MoU) with Taiwan Superconductor International Semiconductor Technology Co Ltd (TSIST) for negotiation in respect of TSIST’s expressed interest to invest up to 30.0% equity in MQTech via participation in a forthcoming corporate exercise of MQTech. However, it did not disclose the sum of the investment. (The Edge)

Source: Mplus Research - 3 Aug 2022