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Mplus Market Pulse - 8 Dec 2022

Publish date: Thu, 08 Dec 2022, 09:04 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Market Review

Malaysia:. The FBM KLCI (-0.3%) recorded its fourth day losing streak, in tandem with the weakness across the regional markets. The lower liners declined, while the energy sector (-2.2%) was the biggest loser amongst the sectorial peers after crude oil price slipped to the lowest level since January 2022.

Global markets:. Wall Street closed mixed as the Dow ended flat, but the S&P 500 (- 0.2%) and Nasdaq (-0.5%) fell on unabated concern over the potential economic downturn on the back of aggressive monetary tightening policy. The European stockmarkets trended lower, while the Asia stockmarkets finished mostly negative.

The Day Ahead

The FBM KLCI extended its losing streak as investors continued to stay on the sidelines. While investors may cheer for China’s easing of Covid-19 restrictions, gains might be capped as worries over the US Federal Reserve long rate-hike cycle could dampen the economic growth going forward. On the local front, we believe focus will be on the re-tabling of Budget 2023 and traders will be watching the developments on the tackling of high living costs by the government. Commodities wise, the Brent crude oil extended its decline, trading below USD80, while the CPO price hovered above RM4,050.

Sector focus:. Investors may favour the banking in the window dressing month, while look out for defensive consumer stocks to acquire under this challenging environment. Investors may also put the tourism stocks on their radar after China’s easing measures. The technology sector may see further selldown as investors could be in risk-off mode amid global uncertainties.

FBMKLCI Technical Outlook

The FBM KLCI slipped below its daily EMA9 level as the key index dropped for the fourth straight session. Technical indicators remained mixed as the MACD Histogram extended a negative bar, while the RSI is hovering above 50. Support is pegged along 1,450-1,460, while the resistance is set at 1,500-1,510.

Company Brief

Muhibbah Engineering Bhd, via a consortium, has accepted a RM322.0m project award from Petronas Carigali Sdn Bhd related to the Gansar Project, 190-km offshore Terengganu. The 22-month contract would involve the provision of engineering, procurement, construction and commissioning plus installation (EPCC+1) of Light Weight Structure (LWS), Duyong Brownfield Modification and Host Tie-In services for the Gansar Project. (The Star)

Gamuda Bhd plans to acquire 30.0% stake in ERS Energy Sdn Bhd for RM200.0m via the subscription of shares. The subscription price, which values ERS Energy at a pre-money equity value of RM467.0m, was arrived at on a willing-buyer willing seller basis, and the investment will be satisfied by cash funded via internal generated funds and borrowings. The investment will grow Gamuda's renewable energy asset portfolio to over 800.0MW in the next few years. (The Edge)

Dayang Enterprise Holdings Bhd has reported that the Employees Provident Fund (EPF) ceased to be its substantial shareholder less than a month after attaining the status. EPF disposed 1.2m shares or a 0.1% stake on 2nd December 2022, slashing its stake to 4.96% (57.4m shares). (The Edge)

QES Group Bhd has secured approval from the Securities Commission (SC) for the transfer of its stock's listing from the ACE Market to the Main Market of Bursa Malaysia. QES was listed on the ACE Market in March 2018. (The Edge)

Solarvest Holdings Bhd pushed through the electric vehicle (EV) charging port market with the launch of the EV charging and mobility solutions called PowerBee. The main target segments were high-rise buildings (residential) and existing customer portfolio in C&I. (The Edge)

KNM Group Bhd has defaulted on 3 credit facilities, 2 totalling USD23.0m (RM101.4m) and 1 involving €68.5m (RM316.2m) on 1st December 2022. KNM is in close negotiation with the lenders, although the repayment date has not changed from the 30th November 2022 deadline, following a previous extension. (The Edge)

Sunview Group Bhd was awarded a RM120.0m engineering, procurement, construction and commissioning (EPCC) contract relating to a solar energy generating facility located in Bestari Jaya, Selangor. The group wholly-owned subsidiary Fabulous Sunview was awarded the contract by Nextenaga Sdn Bhd to undertake the EPCC job for the development of Nextenaga’s 30.0-MWac Bukit Badong large scale solar photovoltaic project. The 10-month contract is expected to be completed on 20th September 2023. (The Edge)

Wah Seong Corp Bhd has secured a contract worth USD127.1m (RM557.7m) for the supply of certain floating production storage and offloading (FPSO) modules by Yinson Holdings Bhd. Its indirect wholly-owned subsidiary WS Engineering & Fabrication Pte Ltd was awarded the contract by Yinson's unit, Yinson Azalea Production Pte Ltd. The scope of work involves engineering, procurement and construction of certain FPSO topside modules, and is expected to be completed within 24 months. (The Edge)

After nearly 8 months, the Malaysian Anti Corruption Commission (MACC) has unfrozen the bank accounts of troubled lingerie maker Classita Holdings Bhd and its subsidiaries. This came after the MACC concluded its investigation without bringing any charges against the company. (The Edge)


Source: Mplus Research - 8 Dec 2022

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