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Mplus Market Pulse - 27 Jan 2023

Publish date: Fri, 27 Jan 2023, 09:49 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Taking a jab towards 1,500

Market Review

Malaysia:. The FBM KLCI (-0.1%) ended marginally lower, dragged by weakness in selected oil & gas heavyweights. The lower liners extended their winning run, while the transportation & logistics sector (+2.4%) outperformed the mostly positive sectorial peers.

Global markets:. The US stockmarkets rebounded as the Dow (+0.6%) advanced after the preliminary reading of 4Q22 GDP (+2.9% YoY) expanded quicker-thanexpected despite the aggressive interest rate hikes. The European stockmarkets also turned upbeat, while the Asia stockmarkets closed mostly in green.

The Day Ahead

Despite the weakness as of late, we expect the key index to re-test the 1,500 level, taking cue from the positive sentiment on Wall Street overnight. The lower liners are staying firm amid strong buying interest, but we caution that the overbought position in most of the stocks across Bursa Malaysia may attract quick profit taking over the foreseeable future. Globally, the stronger-than-expected economic data in the US may continue to lend support for further recovery on Wall Street. Commodities wise, the Brent crude oil recovered all its previous session losses to close above USD87/bbl on the back of larger-than-expected drawdown in natural gas inventory, while the CPO price ticked slightly higher, approaching RM3,800/MT.

Sector focus:. We reckon that the energy sector to take the spotlight in tandem with the rebound in crude oil prices. The positive sentiment on Nasdaq overnight may boost the trading interest in the technology sector. Meanwhile, the strong numbers delivered by Capital A may boost the aviation and tourism related stocks.

FBMKLCI Technical Outlook

The FBM KLCI continues to linger sideways with 1,500 remain in focus. Technical indicators stayed positive as the MACD Histogram remained above zero, while the RSI hovered above 50. Should 1,500 be re-tested again, the next resistances are envisaged around 1,525-1,540, supports are located at 1,450-1,460.

Company Brief

Capital A Bhd’s consolidated airlines carried over 7.8m (+187.0% YoY) passengers in 4Q22. During the quarter, the school holidays, festive seasons, and general election peak periods led to the consolidated airlines achieving almost 50,000 flights, up by 171.0% YoY. The consolidated airlines operated 84 aircraft, an additional 16 operating aircraft from the preceding quarter. (The Star)

Reservoir Link Energy Bhd has secured a contract worth RM11.4m for the supply of mounting structure for a large-scale solar photovoltaic plant development Its 51% owned subsidiary Founder Energy Sdn Bhd received the purchase order from Fabulous Sunview Sdn Bhd, a wholly-owned subsidiary of Sunview Group Bhd. Reservoir Link will supply solar mounting systems which are expected to be delivered between January 2022 to April 2023 to the project location. (The Star)

MQ Technology Bhd has proposed to diversify into property development. The group its wholly-owned unit Star Acres Sdn Bhd is planning to acquire 7.2-ac of land in Klebang, Melaka for RM19.5m from Cash Support Sdn Bhd, to undertake a property development with an estimated gross development value of RM275.0m. (The Edge)

The Federal Land Development Authority (Felda) has raised its stake in plantation giant FGV Holdings Bhd to 81.9%, after acquiring 4.3m shares of the plantation company on the open market. The open market purchase on 18th January 2023 raised Felda’s direct stake in FGV to 69.5% and indirect stake of 12.4%. (The Edge)

Berjaya Corp Bhd (BCorp) founder and major shareholder Tan Sri Vincent Tan Chee Yioun has now trimmed his stake in the diversified group to 19.0%. Tan’s direct stake in BCorp now stands at 7.8%, while his indirect stake is 11.2%. (The Edge)

SYF Resources Bhd managing director Datuk Seri Ng Ah Chai’s stake in the company was reduced by half to 12.0%, after he disposed of 67.0 m shares and his wife Datin Sri Chee Ah Kuan sold 1.1 m shares. The 67.0 m shares were sold off market with no indication of the buyer. Meanwhile, the other 1.1 m shares were sold on the open market. (The Edge)

IHH Healthcare Bhd has announced the resignation of Takeshi Saito as nonexecutive director with effect from 27th January 2023. This follows his resignation as MBK Healthcare Management Pte Ltd’s nominee director. Singapore-based MBK Healthcare is a wholly-owned subsidiary of Mitsui & Co Ltd, which manages the healthcare assets within the Mitsui portfolio. Mitsui is a major shareholder of IHH with a 32.8% stake. (The Edge)

Source: Mplus Research - 27 Jan 2023

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