Relieved by bargain hunting

Market Review

Malaysia: The FBM KLCI (+0.8%) halted a five-day losing streak, largely boosted by bargain hunting activities with more than two-thirds of the key index components finished higher. The lower liners also advanced, while the plantation sector (-0.1%) was the sole underperformer amongst the sectorial peers.

Global markets: Wall Street turned volatile as the Dow (-0.9%) sank after the stronger-than-expected PPI data in November 2022 (+7.4% YoY) underlines the stickiness of inflationary pressure. The European and Asia stockmarkets closed mostly upbeat.

The Day Ahead

The FBM KLCI rebounded after a 5-day selldown and amid broad-based buying interest emerged in tandem with the positive sentiment across regional markets. However, given the pullback last week on Wall Street, the local bourse may trade in a range-bound mode this week ahead of a series of interest rate decisions from the US Fed, UK Bank of England, and European Central Bank. Nevertheless, investors will be looking forward to China’s further reopening and easing of Covid-19 restriction. Commodities wise, the Brent crude oil price stayed above USD76 per barrel mark, while the CPO price staged a rebound, hovering above RM3,950.

Sector focus: In view of further easing of Covid-19 curbs in China, we like tourism, airport, and consumer sectors. Meanwhile, the technology sector may consolidate after the decline on Wall Street overnight should indicate the cautious stance from investors on the upcoming US FOMC meeting.

FBMKLCI Technical Outlook

The FBM KLCI bounced above its daily EMA9 level after moving steadily higher for the entire session. Technical indicators remained mixed as the MACD Histogram extended a negative bar, while the RSI is hovering above 50. The key index may consolidate between its support at 1,450-1,460, and its resistance 1,500-1,510.

Company Brief

Syarikat Takaful Malaysia Keluarga Bhd and its wholly-owned subsidiary, Syarikat Takaful Malaysia Am Bhd, have entered into a strategic bancatakaful partnership with Bank Pertanian Malaysia Bhd (Agrobank). The partnership aims to promote and market credit-related family and general takaful products, while developing the advisory family takaful business. (The Star)

Batu Kawan Bhd announced its final single tier dividend of 90.0 sen per share for FY22. The dividend is payable on 2nd March 2023 while its entitlement date is Feb 20, 2023. (The Edge)

SKP Resources Bhd announced the redesignation of executive director Gan Poh San to managing director of the group. Gan, who assumed his current role in December 2002, is the son of the late Datuk Gan Kim Huat, a major shareholder and former executive chairman and MD of SKP Resources. (The Edge)

Dagang NeXchange Bhd has redesignated its managing director Tan Sri Syed Zainal Abidin Syed Mohamed Tahir as executive chairman of the group, after the resignation of Tan Sri Abdul Rahman Mamat as its chairman to pursue other corporate interests on 6th December 2022. Syed Zainal, 60, joined DNeX's board in July 2020 as an independent non-executive director and was then appointed as managing director in October 2020. (The Edge)

Datasonic Group Bhd has entered into a Memorandum of Agreement as a prime contractor with the Republic of Guinea’s Ministry of Urban Planning, Housing and Territorial Development (MUHAT) as the project owner for 10-years. The profit sharing rate was 60.0% for MUHAT and 40.0% for the company. Apart from the implementation of a new computerised citizen data in land matters and the incorporation of biometric authentication of land data, the agreement involves the manufacture, supply and customisation of high security documents for land titles. (The Edge)

Signature International Bhd has acquired 19.9m shares or 0.7% of the paid-up share capital of Hextar Industries Bhd for RM11.5m. The company purchased the shares in 6 tranches between 21st November 2022 and 7th December 2022 at an average price of 57.8 sen apiece, in an effort to pursue investment goals and short term investment in quoted securities with the prospect of generating short-term returns. (The Edge)

Independent adviser DWA Advisory has told shareholders that the takeover offer of Citaglobal Bhd at 19.0 sen per share, is deemed not fair and not reasonable. The offer price represents a discount ranging from 4.2-11.5 sen over the 5-day, 1- month, 3-month, 6-month and 12-month volume weighted average market prices of Citaglobal shares. (The Edge)

Muhibbah Engineering (M) Bhd was awarded a RM116.4m contract by Petroliam Nasional Bhd’s subsidiary, Institute of Technology Petronas Sdn Bhd, and is slated to start from 15th December 2022. The contract includes a planned construction of student accommodation and a student centre at Universiti Teknologi Petronas in Bandar Seri Iskandar, Perak. (The Edge)

Kronologi Asia Bhd's 3QFY22 net profit dipped 9.8% YoY to RM7.3m, due to higher unrealised foreign exchange (forex) losses. Revenue for the quarter, however, increased 16.6% YoY to RM87.7m. (The Edge)

Source: Mplus Research - 12 Dec 2022