Window dressing activities to lift KLCI

Market Review

Malaysia:. The FBM KLCI (+0.78%) extended its rebound move for the session led by banking and telco heavyweights with the ongoing window dressing activities. Meanwhile, FBM Small Cap (-0.08%) ended flat, but the FBM ACE gained 1.11%. Out of the 13 sectors, both the construction and O&G sector ended in red.

Global markets:. The US stockmarkets performed a significant rebound led by the technology sector as interest rate hike concerns faded with the 10Y and 30Y US treasury yield on a decline. Meanwhile, the European stockmarkets were largely positive cheering the reopening activities in China.

The Day Ahead

The FBM KLCI continues to trade positively, driven by the ongoing year-end window dressing activities in the banking and telco heavyweights. Also, with the positive rebound on Wall Street, it may spillover to the local front and trading activities to stay on an upbeat manner; the FBM KLCI should revisit the 1,500 level. Traders will be focusing on the China’s borders reopening catalyst and position themselves for the recovery theme trades. Commodities wise, the Brent crude oil price settled flat along USD83, while the crude palm oil price is hovering above the RM4,000.

Sector focus:. Following the significant rebound on Wall Street, traders may position themselves for the technology sector today. Meanwhile, we opine that window dressing activities may lift banking, medical, telco and gaming stocks. We also favour shipping, tourism, consumer and airports businesses under the China reopening theme at least for the near term.

FBMKLCI Technical Outlook

The FBM KLCI closed above its daily EMA9 level with a breakout move above 1,480 Technical indicators have turned positive with the MACD Histogram turned positive, while the RSI is hovering above 50. The resistance is located around 1,50- 1,510. Support is envisaged around 1,460-1,470.

Company Brief

Telekom Malaysia Bhd has clarified that the telecommunications giant's decision to exit the Kuala Lumpur Tower, or KL Tower, concession was part of a business transformation programme to focus its efforts and resources on strengthening its core business of telecommunications and technology. KL Tower is owned by the government, while the operations and maintenance of the tower are granted under a concession. (The Edge)

Boustead Holdings Bhd has announced an interim dividend of 1.5 sen per share, its first in four years. The dividend will be paid on March 27, 2023 with a Feb 27 exdate and a Feb 28 entitlement date. Boustead Holdings, which saw Izaddeen Daud appointed as its new group chief executive officer last month, had not declared any dividend since 2018. Its last interim dividend was declared in December 2018 at 1.5 sen. (The Edge)

Pharmaniaga Bhd’s unit has been granted a six-month extension till end-June 2023 of the concession agreement for the provision of medicines and medical supplies to Ministry of Health facilities, pending the finalisation of a new concession agreement. During this period, Pharmaniaga’s wholly-owned subsidiary Pharmaniaga Logistics Sdn Bhd is required to implement the Pharmacy Information System and Clinic Pharmacy System maintenance, licence renewal, change request and system implementation at the new facilities based on existing operating cost rates. This comes as the existing one-year extension, granted on Dec 28, 2021, will expire by the end of this year. (The Edge)

Sunway Real Estate Investment Trust plans to sell a seven-storey purpose-built hospital and land it bought for RM310m a decade ago from Sunway Bhd's healthcare arm under a sale-and-lease-back arrangement — known as Tower A & B of Sunway Medical Centre — back to the latter for RM430m. The proposal comes as the 10-year master lease agreement that commenced on Dec 31, 2012 is set to expire on Dec 30 this year. The REIT has, via its trustee RHB Trustees Bhd, inked a conditional sale and purchase agreement with the Sunway unit, Sunway Medical Centre Sdn Bhd, which is currently using the property that occupies two parcels of leasehold plots to operate a medical centre. (The Edge)

PTT Synergy Group Bhd has proposed to acquire a piece of industrial land in Bandar Bukit Raja, Klang from Sime Darby Property Bhd for RM12.3m. The freehold land, measuring 4,987 square metres, has a double-storey detached factory erected on it. PTT Synergy's wholly-owned sub-subsidiary, PTT Assets Sdn Bhd, entered into an agreement with Sime Darby Property's wholly-owned unit, Sime Darby Property (Bukit Raja) Sdn Bhd, for the purchase of the property. (The Edge)

TAFI Industries Bhd's unit has secured a RM205mcontract to build 941 units of small office home office (Soho) and related facilities in Subang Jaya for the project's main contractor, Metbuild Sdn Bhd. The group's wholly-owned subsidiary TA Furniture & Projects Sdn Bhd has been appointed as the project management consultant by the project's developer, Pinnacle Homes SJ CBD Sdn Bhd. (The Edge)

Source: Mplus Research - 30 Dec 2022