Window dressing may lift stock markets

Market Review

Malaysia:. The FBM KLCI (+0.78%) rebounded amidst mixed regional market despite weakening global sentiment, underpinned by buying momentum in plantation sector due to the FTSE rebalancing activities. The lower liners were mixed, while the plantation sector (+5.0%) outperformed the broader market.

Global markets:. The US stockmarkets declined for the third straight session following a preliminary reading on economic activities in the US from S&P Global, which showed a further deterioration in activity. The European stockmarkets extended its downtrend move, while the Asia stockmarkets were mixed.

The Day Ahead

The FBM KLCI ended the trading week of on a positive note as buying momentum in the plantation stocks led the key index higher amid the FTSE rebalancing activities. Meanwhile, the selling pressure on the US stock markets could have overdone after falling from 34,700 to 32,600 zone and may be due for a technical rebound, despite mounting fears over recession risks. On the local front, the reconvening of the Parliament session, coupled with the vote of confidence will be a formality process to build investors’ confidence, hence the downside risk could be limited with the ongoing window dressing activities. Commodities wise, the Brent crude oil hovered above USD79, while the CPO price traded above RM3,900.

Sector focus:. We still like the O&G sector due to its solid earnings growth recently. Also, we expect the construction and building material segments will be focused ahead of the re-tabling of the Budget 2023. We favour the banking stock with the ongoing window dressing activities. FBMKLCI Technical Outlook

The FBM KLCI reversed higher in the final trading hour and closed above its daily EMA9 level amid improving trading volume. Technical indicators were mixed as the MACD Histogram was slightly below zero, while the RSI hovered above 50. Support is pegged along 1,450-1,460, while the resistance is set at 1,500-1,510.

Company Brief

VS Industry Bhd's 1QFY23 jumped 54.0% YoY to RM60.7m from, due mainly to higher sales orders from existing key customers. Revenue rose 33.7% to RM1.29 bn. An interim dividend of 0.5 sen, payable on 2nd March, 2023 was declared. (The Star)

Gamuda Bhd’s 1QFY23 net profit soared more than seven times to RM1.17 bn from RM152.4 m last year, mainly from the RM1 bn one-off cash gain on divestment of its four highways to Amanat Lebuhraya Rakyat Bhd in October 2022. Revenue gained 90.0% YoY to RM1.31 bn. An interim dividend of 6.0 sen per share, and a special dividend of 38 sen per share which is payable on 23rd December 2022 were declared. (The Star)

Eco World Development Group Bhd’s 4QFY22 net profit contracted 95.8% YoY to RM1.8m, mainly hit by impairment. Revenue fell fell 16.0% YoY to RM559.3m. A third interim dividend of 2.0 sen per share, payable on 19th January 2023 was declared. (The Edge)

SYF Resources Bhd has received conditional approval from the Securities Commission Malaysia (SC) for a reverse takeover by Insas Bhd’s stock broking arm M&A Securities Sdn Bhd. The reverse takeover will be carried out in tandem with various proposals and will include SYF acquiring 100% of M&A Securities for RM222.0m, to be satisfied through the issuance of 1.01 bn SYF shares to Insas at 22 sen each. (The Edge)

Ni Hsin Group Bhd has inked an agreement with VSD Automation Sdn Bhd for the distribution and market segmentation of TAILG EBIXON EV motorcycles in domestic and international markets. Additionally, it has secured the rights to develop and install a charging system and infrastructure for electric vehicles for Langkawi Development Authority. (The Edge)

Mega Sun City Holdings Bhd has changed its name to Rekatech Capital Bhd based on the outcome of its 18th annual general meeting held on 7th December 2023, with all 16 shareholders voting for the change of name. The new stock short name will be quoted as “Rekatech” with effect from 21st December 2022 and replaces its old stock short name “Megasun”. (The Edge)

Artroniq Bhd, formerly known as Plastrade Technology Bhd, has adopted a dividend policy that aims to distribute at least 30.0% of its profit after tax, excluding unrealised income from adjustments due to accounting policy that are non-cash, as dividend for 2023 to its shareholders. (The Edge)

UEM Sunrise Bhd has aborted plans to dispose of its 80.4% stake in South Africabased Roc-Union Proprietary Ltd for 142.6m rand or RM38.0m. Both the group and the purchaser, Olive Investment Trust, have mutually agreed to discontinue the proposed divestment since the settlement of the consideration was not concluded and settled within the prescribed time. (The Edge)

DRB-HICOM Bhd has not received any notice of a buyout offer from tycoon Tan Sri Syed Mokhtar Albukhary Syed Nor, who owns a 56% stake in the company through investment vehicle Etika Strategi Sdn Bhd. Additionally, it has also not received any notification from Syed Mokhtar that he is conducting a strategic review on the company. (The Edge)

Straits Energy Resources Bhd’s 75%-owned subsidiary Straits Technology Solutions Sdn Bhd is buying a 70.0% stake in broadband internet solutions provider Macro Lynx Sdn Bhd for RM700,000. STS on Friday entered into a share sale agreement with ViewQwest Sdn Bhd for the proposed acquisition. ViewQwest will continue to own the remaining 30.0% equity interest in Macro Lynx. (The edge)

NWP Holdings Bhd has announced that Bioalpha Holdings founder, managing director and chief executive officer William Hon Tian Kok has emerged as a substantial shareholder of the group. Hon acquired 6.85 m shares via the open market on Friday, which brings his total shareholding to 31.85 m shares, which represents a 5.6% stake in the company. (The Edge)

Ibraco Bhd’s unit Ibraco Construction Sdn Bhd has set up a joint venture company with supplier of asphalt concrete and ready-mixed concrete Kamunting Premix Plant Sdn Bhd. Ibraco KPP Concrete Sdn Bhd has an initial paid-up capital of RM100,000 represented by 100,000 shares. In the joint venture, Ibraco Construction will hold a 70.0% stake while Kamunting Premix will hold the rest. (The Edge)

MN Holdings Bhd has bagged an engineering, procurement and construction (EPC) contract worth RM28.5m for a large-scale solar (LSS) plant in Terengganu. Its wholly-owned unit, MN Power Transmission Sdn Bhd, was appointed by Century Supplies Sdn Bhd to undertake the job for Cypark Suria Merchang Sdn Bhd in Merchang, in Marang district. It will carry out the electrical and civil engineering subcontract works for the development of a 100 megawatt alternating current interconnection facility for the LSS plant. (The Edge)

Fraser & Neave Holdings Bhd, or F&N, has declared a final dividend of 33.0 sen per share FY22, payable on 10th February 2023. (The Edge)

Ranhill Utilities Bhd has announced a first interim dividend of 0.5 sen per share for FY22, payable on 18th January 2023. (The Edge)

Source: Mplus Research - 19 Dec 2022