US jobs data in focus

Market Review

Malaysia:. The FBM KLCI (-0.4%) extended its decline with more than half of the key index components closed in red yesterday. The lower liners also trended lower, while the utilities sector (+1.7%) outperformed the mostly negative sectorial peers to close at its highest level since October 2021.

Global markets:. Wall Street turned volatile as the Dow sank -1.7% after banking stocks slumped following the Silvergate Capital announcement to wind down its operations and liquidate its crypto-friendly bank. Both the European and Asia stockmarkets ended mostly in red.

The Day Ahead

The FBM KLCI declined further into the negative territory as the Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate were within expectation, while the focus was shifted towards the concerns of bigger rate hikes in the US and weakness in the regional markets; 5-day foreign net selling stood at RM427.3m. Global sentiment shall remain on edge while awaiting key payroll reports from the US later today. Given the negative sentiment abroad, we believe the local stock market may trade cautiously amid intensifying global risk. Commodities wise, the Brent crude oil has declined nearer to USD81, while the CPO price is still hovering above RM4,200.

Sector focus:. The negative performance on Wall Street may lead to further selldown in the technology stocks on the local front. Meanwhile, we expect banking stocks sentiment may be affected given the weakness from the US. However, the tourism and aviation sectors may gain traction amid the reopening theme.

FBMKLCI Technical Outlook

The FBM KLCI ended on a downbeat note below its immediate support at 1,450. Technical indicators remained given the MACD Histogram is showing a rounding top formation, while the RSI is hovering below 50. Next support is located at 1,430- 1,440, while the resistance is pegged along 1,460-1,470.

Company Brief

E.A. Technique (M) Bhd has entered into a memorandum of agreement (MOA) to dispose of a marine vessel, Nautica Muar (NMR) to Alpha Metallum DMCC for USD5.2m (RM23.5m). The disposal consideration was derived after taking into consideration the market value of NMR as well as the audited net book value of RM19.9m as at 31st December 2022. The estimated gain on disposal from the NMR disposal of approximately RM3.4m after taking into consideration the agent’s commissions and other estimated expenses for the NMR disposal of RM210,000. (The Star)

Aeon Credit Service (M) Bhd has announced its first issuance of sukuk wakalah under its Islamic Commercial Papers (ICP) programme, involving a nominal amount of RM50.0m for a tenure of 3 months. Proceeds will be used to finance disbursements to customers, and refinance existing or future Islamic financing facilities, said the consumer financing group in a bourse filing. (The Edge)

Pos Malaysia Bhd has launched its sustainability roadmap, which targets a 30.0% reduction in Scope 1 and Scope 2 emissions by 2025, and is committed to net zero carbon emissions for its operations by 2050. The group delivers to more than 11.0m addresses, has more than 7,400 vehicles and one of Malaysia’s largest real estate portfolios. The group is already using electric bikes across Kuala Lumpur, with plans to have 200 of them in operation by 3Q23. (The Edge)

Able Global Bhd through its 70.0%-owned subsidiary Able Development Sdn Bhd (ADSB) plans to sell its 23.5-ac piece of land in Kuala Langat, Selangor for RM18.5m to Able Perfect Sdn Bhd (APSB). The transaction is deemed to be a related party transaction as Ng Keng Hoe, also known as Huang Qinghe, is the director of ADSB, as well as the director and major shareholder of APSB with a 40.0% stake. (The Edge)

Computer Forms (Malaysia) Bhd's (CFM) board of directors was unaware of the reason behind the recent sharp decline in its share price, in its response to Bursa Malaysia's unusual market activity query. Save for the joint venture agreement entered into between CFM and EA Mobility Holding Co Ltd which was announced on 5th January 2023, the board is not aware of any other corporate development relating to the company and its subsidiaries' business and affairs that has not been previously announced that may account for the trading activity, including those in the stage of negotiation/discussion. (The Edge)

WTK Holdings Bhd is acquiring a second frozen food company to create synergies with the existing frozen food business. Its wholly-owned subsidiary Kuching Plywood Bhd is buying Interglobal Vision (Food Processing) Sdn Bhd for RM2.8 m. Interglobal Vision's current owner is TMC Importer & Exporter Sdn Bhd. (The Edge)

Toyo Ventures Holdings Bhd, which owns the 2.12-GW coal-fired power plant project Song Hau 2 in Vietnam, has inked an agreement for the operations and maintenance of the upcoming USD2.42bn power plant. The group signed the contract with Power Engineering Consulting Joint Stock Company 2 with an annual contract price of USD86.0m (RM388.8m). (The Edge)

GFM Services Bhd announced that the group’s vice-chairman Ruslan Nordin has been redesignated as the new managing director. The group also announced the retirement of Mohammad Shahrizal Mohammad Idris as managing director. Shahrizal, however, will remain as an executive director. (The Edge)

Source: Mplus Research - 10 Mar 2023