Restoring confidence in the banking sector

Market Review

Malaysia:. The FBM KLCI (-0.7%) reversed part of its previous session gains, taking cue from the on-going volatility across the global markets. The lower liners also turned downbeat, while the telecommunication & media sector (+0.1%) that is touted as defensive in nature outperformed the sectorial peers.

Global markets:. Wall Street rebounded as the Dow (+1.2%) rallied on easing concerns over the on-going crisis in the banking sector after a forced takeover of Credit Suisse by UBS engineered by the Swiss government. The European stockmarkets also advanced, but Asia stockmarkets languished in red.

The Day Ahead

The FBM KLCI witnessed an intense selloff along with the regional peers as investors remained cautious over the banking turmoil in the US and Switzerland. However, we saw the sentiment improved on Wall Street following the rescue deal for Credit Suisse, while investors may shift their focus to the US Fed’s interest rate decision tomorrow (US time). We believe the local bourse will remain sideways until more clues are given after the conclusion of the FOMC meeting. Commodities wise, the Brent crude oil is hovering above USD73, while the CPO rebounded above RM3,800. Meanwhile, gold prices remained firm above USD1,950.

Sector focus:. Given the rebound on Wall Street, we believe the technology sector may see a mild rebound following Nasdaq’s gains. Also, we expect investors to look for defensive stocks within the gold, consumer staples, and telecommunications sectors amidst the uncertain global environment.

FBMKLCI Technical Outlook

The FBM KLCI retreated but managed to close above the key 1,400 level. Technical indicators however could be positive biased as the MACD Histogram turned higher despite hovering in the negative region, while the RSI is above 30. Resistance is located around 1,420-1,430, while the support is pegged along 1,370-1,380.

Company Brief

Theta Edge Bhd has received a contract termination notice from Institut Jantung Negara Sdn Bhd, dated 17th March 2023. Its wholly-owned subsidiary, Theta Technologies Sdn Bhd, was awarded the contract on 25th February 2021 to supply, conduct requirement study, design, develop/ customise, configure, integrate, data migration, install, test, training, support and maintain hospital information systems and electronic medical record. (The Star)

SNS Network Technology Bhd’s wholly-owned subsidiary, SNS Network (M) Sdn Bhd has signed a collaboration agreement with Kumon Education (Malaysia) Sdn Bhd (Kumon Malaysia) for the supply of Apple iPad products and accessories. As part of the agreement, SNS will create and maintain a portal from which Kumon Malaysia’s parents and students can access while also undertaking all services related to the supply of Apple iPad products and accessories. (The Star)

Leform Bhd has secured a contract worth RM19.5m from IJM Construction Sdn Bhd to supply and install guardrails at Section 11 of the Beruas Interchange to Taiping South Interchange. The work is expected to be completed by 30th August 2023. The expressway, once completed, will be the third longest highway in Peninsular Malaysia, spanning 233km, after the 966km North-South Expressway and the 330km East Coast Highway. (The Star)

Two and a half months after their executive functions were suspended, Revenue Group Bhd executive directors Brian Ng Shih Chiow and Dino Ng Shih Fang have resigned from the board of the e-payments service provider. Brian and Dino’s departure from the board effective 20th March 2023 was due to them not wanting to be on the same board of directors with the current directors. While the brothers have vacated their executive director post, Dino remains as the group’s largest shareholder with 85.4m shares or a 17.7% stake. (The Edge)

Fast Energy Holdings Bhd has diversified into the consumer electronics sector, with its subsidiary's appointment as the exclusive distributor of China-made FreeYond products in Malaysia. The wholly owned subsidiary, Fast Technology Sdn Bhd, entered into an agreement with Great Work Corporation Ltd to be the sole distributor of FreeYond products in Malaysia. (The Edge)

MCA has been steadily increasing its shareholding in Star Media Group Bhd since August 2022 by acquiring 9.3m shares, upping its stake by 1.3% to 327.5m shares or 45.2%, while Amanah Saham Bumiputera (ASB) has been trimming its stake in the media group since the start of 2023. Of MCA's latest shareholding, 14.2m shares or 2.0% are indirectly held. The latest acquisition involves 892,500 shares, acquired last Thursday and Friday via its investment arm Huaren Holdings Sdn Bhd. ASB disposed of 500,000 shares last Wednesday and Thursday, about 0.1% of Star Media's outstanding shares, leaving it with 43.0m shares representing 5.9%. (The Edge)

Source: Mplus Research - 21 Mar 2023