Recovery on the cards

Market Review

Malaysia:. The FBM KLCI (-2.0%) sank below 1,400 in line with the weakness across the regional peers amid rising concern over the financial risk of the US banking system. The lower liners also closed in red, while all the 13 major sectors were painted in red with the energy sector (-3.4%) taking the biggest hit.

Global markets:. Wall Street rebounded as the Dow (+1.1%) snapped a 5-day slide on easing concerns over contagion effect in the banking sector, while inflation rate in February 2023 cooled to +6.0% YoY; meeting market expectations. The European stockmarkets also recovered, but Asia stockmarkets remained downbeat.

The Day Ahead

Lingering fears over the collapse of the US banks rippled through markets, dragging the FBM KLCI below the key 1,400 level. Following a five-session rout, the local bourse is likely to see some rebound along with the regional markets as the largely-in-line inflation data in the US could ease investors’ concern on aggressive interest rate hikes next week. Economic indicators wise, the European Central Bank’s interest rate decision and Eurozone’s inflation rate will be the next focus. Brent crude oil price tumbled towards USD77, while the CPO traded above RM4,000.

Sector focus:. The strong rebound on Wall Street may spill over to the local bourse, benefitting the technology sector. Investors may see bargain hunting activities in beaten-down sectors such as financial services and industrial products & services. On the other hand, the energy stocks could still be under pressure due to weaker crude oil prices below USD80.

FBMKLCI Technical Outlook

The FBM KLCI sank for the fifth straight session and breached below the key 1,400 level. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 30. Next support is located along 1,370-1,380, while the resistance is pegged at 1,440-1,460.

Company Brief

Volcano Bhd, which has received an unusual market activity (UMA) query from Bursa Malaysia is assessing an equity fundraising exercise to be announced in due course, subject to relevant due diligence reviews. (The Star)

Westports Holdings Bhd and UEM Sunrise Bhd both had their respective judicial review applications to challenge the Inland Revenue Board's additional tax assessments rejected by the High Court on 13th March 2023. They are both appealing the court's decision and have applied for a stay of proceedings until the completion of the appeal process, according to their respective filings to Bursa Malaysia. The appeals were submitted on the same day. (The Edge)

Revenue Group Bhd co-founders Brian Ng Shih Chiow and Dino Ng Shih Fang were charged in the Sessions Court on 14th March 2023 with fraudulently causing a bank employer to dispose of a vehicle belonging to the company without a resolution from its board of directors. The brothers had claimed trial by pleading not guilty to the charge before judge Rozina Ayob.

Meanwhile, Revenue Group’s managing director cum alternative chairman Datuk Eddie Ng Chee Siong had disposed of 25.3m of his shares in the company off market, representing 5.3% of the total issued share capital. Eddie then ceased to be the substantial shareholder of the group. (The Edge)

Capital A Bhd has appointed Mohamad Hafidz Mohd Fadzil as acting chief executive officer of airasia Super App, effective 1st April 2023. Mohamad Hafidz, who is currently airasia Super App chief fintech officer, will be succeeding current CEO Amanda Woo. (The Edge)

Meta Bright Group Bhd announced that Sinergi Perdana Sdn Bhd had accepted its offer letter through its wholly owned subsidiary FBO Land (Setapak) Sdn Bhd on 8th March 2023 to participate in the Solar PV Zero Capex Program. The programme included a supply agreement on renewable energy for 21 years with a capacity of 300 kWp, which will be finalised based on the technical study and final calibration result by Tenaga Nasional Bhd. (The Edge)

Steel Hawk Bhd has secured 2 contracts from Petronas Carigali Sdn Bhd to provide pig trap system maintenance for a tenure of 1 year, with an additional 1- year extension option. The contracts are on a call-out basis (which does not have a fixed contract value) and we are engaged by Petronas Carigali to provide specified services for the duration of the said contracts, as and when such services are required. (The Edge)

Landmarks Bhd, a 21.7% associate of Genting Bhd has reported that its wholly owned subsidiary has defaulted in its repayment on financing facilities totalling RM133.4m. OCBC Bank (Malaysia) Bhd has issued Andaman Resort Sdn Bhd a notice of recall dated 8th March 2023, demanding the repayment of banking and credit facilities be paid within 14 days, which is by 22nd March 2023. (The Edge)

Anzo Holdings Bhd will be delisted from Bursa Malaysia Securities on 17th March 2023 after the company was unable to appoint a principal adviser within the prescribed time frame. The appointment of the principal adviser by 13th March 2023 was among the conditions imposed by Bursa Securities on 13th February 2023 when granting Anzo a 6-month extension to 30th April 2023 to submit its regularisation plan. (The Edge)

Classita Holdings Bhd has redesignated its non-executive chairman Ng Keok Chai as executive chairman, effective from 14th March 2023. Ng previously held the executive chairman post for 5 months after he was redesignated to the position in August 2022 from being an executive director. However, in February 2023, he was redesignated to non-executive chairman. Besides Classita, Ng also sits on the boards of CSH Alliance Bhd, Green Packet Bhd, Ingenieur Gudang Bhd and Hong Seng Consolidated Bhd. (The Edge)

Managepay Systems Bhd’s wholly owned subsidiary ManagePay Innovation Sdn Bhd (MISB) reported that Singapore-based company, StoneX APAC Pte Ltd, has agreed to extend various precious metals trading facilities. This will enable MISB to provide end-to-end collateral service handling for the sale and purchase of precious metals such as gold bullion, including storage, to the QuicKredit lending platform. QuicKredit is an online lending service to be launched by ManagePay Resources Sdn Bhd by 3Q23. (The Edge)

Source: Mplus Research - 15 Mar 2023