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Mplus Market Pulse - 13 Feb 2023

Publish date: Mon, 13 Feb 2023, 09:33 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my

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Spurred by strong GDP data

Market Review

Malaysia:. The FBM KLCI (+0.7%) rebounded from a 3-day pullback as market participants cheered on the slightly better-than-expected 4Q22 GDP data. The lower liners, however, closed mixed, while construction sector (+1.9%) outperformed the mixed sectorial peers.

Global markets:. The US stockmarkets rebounded as the Dow (+0.5%) recouped some of its previous session losses with more than two-thirds of the index components advanced on bargain hunting activities. The European stockmarkets, however, closed in red, while Asia stockmarkets finished mostly negative.

The Day Ahead

The FBM KLCI recovered from its three-session losses on bargain hunting activities, especially in banking and energy heavyweights. Global sentiment remained mixed as investors are likely to pay attention to the US inflation rate which will be released this week; this may determine the direction of the interest rate going forward. Meanwhile, the local bourse should focus on the earnings reporting season as well as the re-tabling of Budget 2023. Commodities wise, the Brent crude oil price jumped above USD86 per barrel on rising demand from China, while the CPO traded above RM3,900.

Sector focus:. The construction and building material sectors may shine prior to the re-tabling of Budget 2023. Meanwhile, the renewable energy sector could be in focus on market’s anticipation over favourable policy towards the sector. Also, the oil & gas sector may gain momentum on higher crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI rebounded, snapping the three-session losing streak but staying below its daily EMA120. Technical indicators however, remained negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 50. Support is set around 1,450-1,460, while the resistance is located along 1,500- 1,510.

Company Brief

Iris Corporation Bhd (Iris Corp) has entered into a shares sale agreement (SSA) with Tass Tech Technologies Sdn Bhd (Tass Tech) for the disposal of 80.0% equity interest in its unit, Iris Information Technology Systems Sdn Bhd (IITS), for RM70.0m in cash. The proposed disposal would enable the company to unlock its investment in IITS, and the disposal consideration will contribute positively to its cash flow. Upon completion of the proposed disposal, the company is expected to realise a gain of RM7.2m in FY24. (The Star)

Malaysia Marine and Heavy Engineering Bhd’s (MHB) 4QFY22 net profit stood at RM27.1m vs. a net loss of -RM107.8m recorded in the previous corresponding quarter, due to higher dry-docking activities since the reopening of borders on 1st April 2022. Revenue for the quarter, however, slipped 1.9% YoY to RM424.0m. An interim dividend of 1.5 sen per share, payable on 24th March 2023 was declared. (The Edge)

MyEG Services Bhd bought back an additional 2.0m shares of the company at 61.0 sen apiece for a total of RM1.2m on last Friday. This is the third block of shares it purchased this week. (The Edge)

Lee Thiam Wah, the founder of retail chain 99 Speedmart has emerged as a substantial shareholder of Alliance Bank Malaysia Bhd. Lee’s company Global Success Network Sdn Bhd acquired 1.4m shares or a 0.1% stake on the open market on 9th February 2023, bumping his stake in the bank to 5.1%. (The Edge)

Gan Wen Ting @ Gan Moou Heng has pared her shareholding in SMTrack Group Bhd, paving the way for the group’s second attempt at diversification in less than a year. She disposed of 105.9m of SMTrack’s shares in the open market through Gan SMT Sdn Bhd on last Friday. (The Edge)

Revenue Group Bhd has announced that its co-founders Brian Ng Shih Chiow and Dino Ng Shih Fang have filed their defence and a counterclaim against the group, stating that their suspension as its directors was invalid. The two brothers, who collectively hold a 19.5% stake in the e-payment solutions provider, were suspended last month after several complaints were received against them. Meanwhile, the parties have also applied for injunctions to prevent 2 extraordinary general meetings of Revenue which are scheduled to be held on 17th February 2023. (The Edge)

Tenaga Nasional Bhd (TNB) has inked several Memoranda of Understanding (MOUs) in Thailand, including with the Electricity Generating Authority of Thailand (EGAT) to set up a joint working committee to study interconnection enhancement between Malaysia and Thailand to capitalise on regional demand and potential for greener power in Asean. Two other MOUs include collaborations between TNB Renewables Sdn Bhd and Planet Utility Co Ltd as well as TNB Power Generation Sdn Bhd and B Grimm Power Public Co Ltd. (The Edge)

The High Court on last Friday granted a temporary stay to Serba Dinamik Holdings Bhd and its three subsidiaries; Serba Dinamik International Ltd, Serba Dinamik Sdn Bhd and Serba Dinamik Group Bhd of the winding-up order against them. Serba Dinamik and the subsidiaries are said to have owed syndicated, bilateral creditors from financial institutions and sukuk holders RM5.00bn. The temporary stay order was granted pending the hearing of the companies’ permanent stay application on 6th March 2023. (The Edge)

Signature International Bhd’s co-founder Tan Kee Choong has resigned as group chief executive officer effective last Friday. Tan was appointed to the post in June 2021 upon his resignation as group managing director. (The Edge)

Ageson Bhd has denied the allegation about its executive director Datuk Seri Chin Kok Foong regarding the purported involvement of fraudulent documents in 2019 and 2018. Chin denied his involvement and believed that the allegation was targeted at him personally. (The Edge)

Visdynamics Holdings Bhd has proposed a 1-for-2 bonus issue of shares to reward its existing shareholders. It entails the issuance of up to 87.6m new shares to the entitled shareholders. At the same time, the company also proposed a bonus issue of warrants, involving the issuance of up to 65.7m new warrants on the basis of 1 warrant for every 4 shares held after the completion of the proposed bonus issue of shares. Assuming that all warrants are exercised at an indicative exercise price of 5.5 sen each, Visdynamics will raise gross proceeds of up to about RM36.1m to fund its day-to-day operations. (The Edge)

Globaltec Formation Bhd announced that its subsidiary NuEnergy Gas Ltd has inked the Heads of Agreement with PT Laras Ngarso Gede for the supply and sale of coal bed methane in the Tanjung Enim Production Sharing Contract in South Sumatra, Indonesia. PT Laras Energy is a downstream natural gas and its derivative products provider. (The Edge)

Matang Bhd is buying a property from Star Media Group Bhd for RM33.0m. The two units of double storey semi-detached factory and warehouse annexed with a one and-a-half-storey office building and other ancillary buildings are located within the Star Business Hub, an industrial development project in Bukit Jelutong, Shah Alam. This exercise is deemed as related party transactions as MCA (a component party of Barisan Nasional) is a common major shareholder in both groups. MCA holds an indirect stake of 17.2% in Matang and a direct stake of 43.2% in Star Media. (The Edge)

Source: Mplus Research - 13 Feb 2023

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