Negative sentiment could spillover to KLCI

Market Review

Malaysia:. The FBM KLCI (+0.7%) climbed, buoyed by the buying momentum in selected plantation and banking heavyweights. The lower liners ended mixed, while the healthcare sector (+2.8%) was the best performing sector, followed by the transportation & logistics sector (+2.0%).

Global markets:. The US stockmarkets slumped with the Dow, S&P 500 and Nasdaq shedding more than 1.0% as continued tightness in the labour market signalled further interest rate hikes by the US Fed. The European stockmarkets traded in a negative-biased tone, while the Asia stockmarkets ended largely positive.

The Day Ahead

The FBM KLCI rebounded into the positive territory as foreign funds turned into net buyer after 4-day outflow streak. While the reopening of China borders may continue to stimulate economic activities, the stock markets may remain volatile as recessionary concerns could still remain as top agenda following the release of US job data overnight, which may signalled further increase in interest rate outlook. Commodities wise, the Brent crude oil saw slight rebound, trading above the USD78 per barrel mark, while the CPO price hovered above RM4,000.

Sector focus:. As we anticipate renewable energy and EV policies to be crafted in the upcoming Budget 2023, the solar and EV segments may gain traction. Given the renewed worries on Covid-19 situation in China, buying interest have returned in gloves and share price could extend for another session. Meanwhile, the technology sector may turn lower, tracking overnight losses on Wall Street.

FBMKLCI Technical Outlook

The FBM KLCI advanced and closed above its daily EMA9 level. Technical indicators turned positive as the MACD Histogram extended a positive bar, while the RSI crossed above zero line. Resistance is monitored at 1,500-1,510, while the support is envisaged along 1,450-1,460.

Company Brief

Managepay Systems Bhd’s (Mpay) wholly-owned unit, ManagePay Resources Sdn Bhd (MRSB), has received conditional approval from the Ministry of Local Government Development (KPKT) to operate as an online money lender under the Moneylenders Act 1951 (Act 400). MRSB’s online money lending licence, dated 30th August 2022 was subjected to the conditions to be fulfilled within six months period from 9th January 2023 to 8th July 2023. (The Star)

Mr. D.I.Y. Group (M) Bhd’s wholly owned subsidiary, Mr D.I.Y. Management Two Sdn Bhd had entered into a sale and purchase agreement with Y5 Development Sdn Bhd and U & Location Sdn Bhd for the purchase of 80 units foreign workers' quarter in Balakong, Selangor under the centralised labour quarter (PAPA) for RM13.2m. The acquisition would facilitate the company in managing its foreign workers and their accommodation systematically. (The Star)

Two of Revenue Group Bhd’s executive directors, brothers Brian Ng Shih Chiow and Dino Ng Shih Fang, whose executive functions were suspended on Wednesday (4th January 2023) had illegally seized documents belonging to the company. Revenue announced the appointment of Danny Leong Kah Chern (former CEO of Cuscapi Bhd and GHL Systems Bhd) as the new CEO, as well as the redesignation of co-founding managing director and CEO Datuk Eddie Ng Chee Siong to managing director-cum-alternate chairman. (The Edge)

Computer Forms (M) Bhd plans to team up with Thailand-based Energy Absolute PCL by 1Q23 to jointly produce and distribute electric vehicles (EVs) as well as EV chargers in Malaysia. Computer Forms has entered into an agreement with Energy Absolute’s 99%-owned subsidiary EA Mobility Holding Co Ltd to set out further details pertaining to their joint-venture company. (The Edge)

Paragon Union Bhd is selling industrial land in Cheras, Selangor — which contains a single-storey detached factory with a three-storey office annexe — for RM17.5m to D’nonce Technology Bhd. Paragon Union, a car component and carpet maker, has earmarked RM8.4m of the proceeds for working capital and RM7.2m for repayment of bank borrowings. (The Edge)

Practice Note 17 company Scomi Group Bhd’s wholly-owned subsidiary Scomi Capital Sdn Bhd (SCSB) has entered into a Heads of Agreement with its JV partner XAIR Generators Sdn Bhd towards acquiring a further 60% equity interest in the pair’s power generation solutions JV firm Hartamas Megah Sdn Bhd, to raise its stake in the company to 80%. Currently, XAIR holds an 80% stake in the JV, while SCSB holds 20%. (The Edge)

Majuperak Holdings Bhd has decided to dispose of a 134.2-ha. piece of leasehold land in Perak to Perak Agro Corp Sdn Bhd, a wholly-owned unit of the state’s agricultural development agency Perbadanan Pembangunan Pertanian Negeri Perak (PPPNP), for RM9.5m as debt settlement. The land transfer is deemed a related party transaction as Majuperak is 51% owned by Perbandanan Kemajuan Negeri Perak, another state government agency that shares common directorship with PPPNP. (The Edge)

Catcha Digital Bhd has announced the appointment of Eric Tan Leong Yit as group CEO effective 2nd January 2023. Tan (former CEO and co-founder of Instahome, and the co-founder of VIP Live) will be responsible for driving growth and expansion opportunities, and value-adding mergers and acquisitions. (The Edge)

Focus Point Holdings Bhd’s entire issued share capital has successfully been transferred from the ACE Market of Bursa Malaysia to the Main Market. Focus Point is set to continue its expansion both locally and regionally via effective marketing and promotional activities, as well as the opening of new optical and Japanese concept bakery Komugi outlets. (The Edge)

Source: Mplus Research - 6 Jan 2023