Market Review

Malaysia:. The FBM KLCI (-0.3%) slipped further amidst mixed regional markets as investors remained cautious amid global recession fears. Meanwhile, the lower liners ended lower, while the telecommunications & media sector (-1.9%) was the worst performing sector on the broader market.

Global markets:. The US stockmarkets surged strongly on the back of the upbeat earnings from Nike, coupled with improving consumer confidence data as well as easing inflation expectations. The European stockmarkets ended largely higher, while Asia stockmarkets were mixed. The Day Ahead The FBM KLCI fell amid subdued trading as lingering worries over the recession concerns persisted. However, foreign investors have turned net buyer following the recent selldown. Given the strong rebound on Wall Street overnight, we believe the buying interest may spill over to the regional markets as well as the local bourse amid improving consumer confidence environment in the US Commodities wise, the Brent crude oil price rose above USD82 after the EIA reported an inventory draw of 5.9m barrels last week, while the CPO price hovered above RM3,950.

Sector focus:. The technology sector could stage a rebound following a strong surge on Nasdaq overnight. Besides, we expect buying interest to emerge on the oil & gas sector amid firmer Brent oil price. Investors may also focus on the construction and building material sectors as the ECRL project will continue at a lower cost.

FBMKLCI Technical Outlook

The FBM KLCI declined for the third straight session amid subdued trading activities. Technical indicators turned negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 50. Support could be monitored at 1,460, followed by 1,450, while the resistance is pegged along 1,500-1,510.

Company Brief

YSP Southeast Asia Holdings Bhd’s unit YSP Industries (M) Sdn Bhd has entered into an agreement with Onkyo Asia Electronics Sdn Bhd to buy a property in Kajang, Selangor for RM31.0m. The property will be used for the group’s expansion for the production of food and health supplements. (The Star)

Tenaga Nasional Bhd’s (TNB) wholly owned subsidiary vantage RE Ltd has signed an engineering, procurement and construction (EPC) contract with Belectric GmbH for the construction and commissioning of 102MW solar farms in the UK with an expected commercial operation date by 1Q24. Vantage RE Ltd will oversee the projects. The farms are expected to provide stable long-term revenue under a 15- year contract-for-difference subsidy scheme. (The Star)

Berjaya Corp Bhd (BCorp) raised its stake in REDTone Digital Bhd to 47.8% (366.9m shares), after acquiring another 3.2% (24.6m shares) in the company at about 45 sen per share, or RM11.0m, via direct business transactions from 30th August 2022 till 21st December 2022. The share purchases were made by BCorp's wholly-owned subsidiaries Juara Sejati Sdn Bhd and Teras Mewah Sdn Bhd. Meanwhile, BCorp has signed a preliminary non-binding term sheet with Indonesia's MNC Group to explore e-money business in Malaysia. (The Edge)

Pekat Group Bhd announced its chief operating officer (COO) Tai Yee Chee will be redesignated as the company's chief executive officer (CEO) from 1st January 2023, while Chin Soo Mau will be relinquishing his executive roles as the CEO and managing director. Tai would remain as an executive director and the position of COO would remain vacant until further notice. Currently, Chin holds a 34.9% stake in Pekat, followed by Tai with 10.4%. (The Edge)

Aeon Credit Service (M) Bhd’s 3QFY23 net profit fell 19.2% YoY to RM83.6m, impacted by higher impairment losses on financing receivables. Revenue, however, rose 11.0% to RM417.84 m, mainly due to stronger loan and financing growth. (The Edge)

Supercomnet Technologies Bhd plans to submit its application to the regulators in the next three months to apply for a transfer of its listing status to the Main Market. It expects the proposed exercise to be completed by end-June next year. (The Edge)

Sersol Bhd is venturing into the electric scooter business. Its wholly-owned unit Sersol Energy Sdn Bhd inked a three-month Memorandum of Understanding with China-based Chongqing Beidou Jiean Neo-Energy Technology Ltd to sell, distribute and produce electric scooters and related accessories, which include charging of the electric scooters. (The Edge)

ELK-Desa Resources Bhd has proposed to undertake a bonus issue of up to 151.6m new shares on the basis of one new share for every two existing shares. Following the bonus issue, ELK-Desa will have an enlarged issued share capital of 454.8m shares valued at RM351.5m. (The Edge)

Techna-X Bhd has proposed to undertake capital reduction to rationalise its balance sheet by reducing its accumulated losses. It intends to reduce its share capital to RM73.4m from RM1.22bn as of 20th December 2022, resulting in a credit of RM1.15bn, which will be used to set off its accumulated losses of RM1.14bn at the group level. (The Edge)

A 50:50 joint venture consortium between Reneuco Bhd and Citaglobal Bhd has won a tender to develop an independent power producer project for the East Coast Rail Link (ECRL) network. The consortium, which accepted a Letter of Intent from Malaysia Rail Link Sdn Bhd, will undertake the planning, design, financing, development, construction, installation, completion, commissioning and operation of the project. The proposal involves the supply of renewable power to commercial
or industrial parks along the ECRL's 640-kilometre alignment. (The Edge)

Source: Mplus Research - 22 Dec 2022