Market Review

Malaysia: The FBM KLCI (+0.3%) extended its gains to close marginally above the 1,500 level prior to the extended Lunar New Year break. The lower liners also extended their lead, while the healthcare (-0.7%) and property (-0.01%) sectors underperformed the positive sectorial peers.

Global markets: The US stockmarkets finished mixed as the Dow (+0.3%) advanced, but the S&P 500 (-0.1%) edged lower, dragged by weaker corporate earnings from 3M (-6.2%) and Union Pacific (-3.3%). The European stockmarkets also closed on a mixed note, but the Asia stockmarkets ended mostly positive.

The Day Ahead

The FBM KLCI took another step higher to close marginally above the 1,500 level. This week, we reckon that the trading activities will be muted amid the holidayshortened trading week as most investors could still be enjoying the break. Nevertheless, bouts of upsides are to be expected with traders taking further positions in riskier assets following the Bank Negara’s unexpected move to maintain the OPR. Commodities wise, the Brent crude oil slipped to close around USD86/bbl, while the CPO price is approaching RM3,900/MT.

Sector focus: The O&G and plantation sectors may garner trading interests with CPO price recording three consecutive sessions of recovery, while the Brent oil is firmly higher due the higher demand from the reopening theme. Also, construction and building materials related stocks could turn more positive under the improving labour conditions. Meanwhile, with the freight rates normalising and the weaker Baltic Dry Index, the shipping-related stocks may turn less attractive.

FBMKLCI Technical Outlook

The FBM KLCI inched higher, surpassing marginally above 1,500. Technical indicators remained positive as the MACD Histogram trended higher, while the RSI remains above 50. Should 1,500 sustained over the foreseeable future, the next resistances are envisaged around 1,525-1,540, supports are located at 1,450-1,460.

Company Brief

Kawan Food Bhd has formed a 40:60 joint venture with Good2Nature Sdn Bhd (G2N) to undertake the business of producing biocompost. G2N has an issued and paid-up share capital of RM10,000 and is currently engaged in organic agricultural activities for crops production, organic compost, and wholesale and trading of organic fertilizer and agrochemical products. The joint venture is expected to be completed in 1Q23. (The Star)

Maxis Bhd, the only major mobile network operator (MNO) which has yet to execute the access agreement (AA) for 5G service, will postpone seeking its shareholders' approval on the entry into a 5G AA with Digital Nasional Bhd until the government finalises the 5G implementation policy. The government on 13th January 2022 announced that it would be reviewing the rollout of the national 5G network, and expected the 5G network implementation policy to be tabled before the Cabinet by the end of 1Q23. (The Edge)

Berjaya Corp Bhd (BCorp) founder and major shareholder Tan Sri Vincent Tan Chee Yioun has pared his stake in the group to 21.3%, inching closer to his target of 19.6% by end-January 2023. BCorp is in the midst of negotiations for the proposed acquisition of a controlling stake in MCIS Insurance Bhd (MCIS Life). The shareholding pare down is towards complying with Section 92 of the Financial Services Act 2013, which states that individuals shall hold no more than a 10.0% stake in a financial institution. (The Edge)

Westports Holdings Bhd’s 4QFY22 net profit rose 5.5% YoY to RM235.0m, lifted by investment tax allowance. Revenue for the quarter added 3.4% YoY to RM521.1m. A dividend of 7.46 sen per share, payable on 20th February 2023 was declared. (The Edge)

Tenaga Nasional Bhd (TNB)’s wholly-owned subsidiary Vantage RE Ltd has secured a £72.0m refinance package from Mizuho Bank Ltd and National Westminster Bank Plc for offshore wind investment by the unit's 49.0%-owned Blyth Offshore Demonstrator Ltd (BODL). The financing facility will have a 15-year tenure. (The Edge)

KNM Group Bhd has proposed a private placement to raise as much as RM18.4m for working capital requirements and expenses related to the restructuring and formulation of its regularisation plan. The placement will entail the issuance of up to 367.6m new shares, which represents 10.0% of its total share base of 3.68bn shares to third-party investors to be identified later, at an issue price to be determined later. (The Edge)

Muar Ban Lee Group Bhd has proposed to undertake a bonus issue of 113.8m warrants on the basis of 1 warrant for every 2 existing ordinary shares. These warrants will carry a 5-year tenure with an exercise price of 50.0 sen each. (The Edge)

Green Packet Bhd is selling its entire 100.0% stake in software development company Xendity Sdn Bhd to Innov8tif Holdings Sdn Bhd, for RM17.5m in cash. The estimated gain on the disposal is RM3.6m, based on the carrying value of Xendity of RM13.9m. (The Edge)

Source: Mplus Research - 25 Jan 2023