Finding stability

Market Review

Malaysia:. The FBM KLCI (+0.3%) eked out minor gains, lifted by stronger performances in more than half of the key index constituents yesterday. The lower liners also rebounded, while the healthcare sector (+3.0%) outperformed the mostly positive sectorial peers to close at the highest level in 3 months.

Global markets:. Wall Street extended their lead as the Dow rose 1.0% after Treasury Secretary Janet Yellen reassured to safeguard against further banking crises. The European stockmarkets also marched higher, while Asia stockmarkets ended mostly upbeat.

The Day Ahead

The FBM KLCI advanced as investors were on a bargain hunting mode in view of the calmer sentiment on the regional markets. Meanwhile, Wall Street climbed overnight on fading fears following Treasury Secretary Janet Yellen’s reassurance to avert further banking crises. The US Fed’s interest rate decision tonight will take the center stage and investors should remain cautious ahead of the conclusion of the meeting as aggressive rate hike or hawkish tone from the Fed is likely to hammer investors’ sentiment further. Commodities wise, the Brent crude oil price surged above USD75, while the CPO price hovered above RM3,750. Meanwhile, gold prices remained solid above USD1,900.

Sector focus:. The rallies in Wall Street may provide support to the local technology sector. Besides, the banking sector may continue to gain ground amidst easing fears overnight in the US. Investors may also favour the energy sector given the rebound in crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI climbed higher from the 1,400 level. Technical indicators however remained negative as the MACD Histogram extended a negative bar, while the RSI has rebounded off the oversold position. Resistance is set around 1,420-1,440, while the support is located along 1,380-1,390.

Company Brief

Poh Kong Holdings Bhd’s 2QFY23 net profit fell 12.5% YoY to RM25.7m, due to lower revenue and the fluctuation of gold prices. Revenue for the quarter was marginally lower by 0.6% YoY to RM403.8m. (The Star)

Malakoff Corporation Bhd has proposed to buy a 70.0% stake in a company that is developing three small hydroelectric renewable energy plants in Kuala Kerai, Kelantan with a collective capacity of 84.0-MW. The group has, under its strategic transformation initiatives, identified small-hydro as a key growth area within its renewable energy portfolio which is aligned with Malaysia’s Renewable Energy Roadmap to leverage hydro’s full potential as one of the technology-specific pillars towards achieving a low carbon energy industry. (The Edge)

Lotte Chemical Titan Holding Bhd’s (LCT) subsidiary PT LOTTE Chemical Indonesia (LCI) has entered into a 12-year loan facility of USD2.40bn (RM10.58bn) with the Export-Import Bank of Korea, Korea Trade Insurance Corporation and other commercial banks to fund the development works of an integrated petrochemical facility in Indonesia, known as the Lotte Indonesia New Ethylene (LINE) project. LCT holds an effective equity interest of 51.0% in LCI, the owner of the LINE project, while LOTTE Chemical Corp holds the remaining 49.0% and is also the guarantor of the loan facility. (The Edge)

GDB Holdings Bhd, via its wholly owned subsidiary Grand Dynamic Builders Sdn Bhd (GDBSB), has withdrawn its legal suit against KSK Land Sdn Bhd, the holding company of Damai City Sdn Bhd, over unpaid monies in relation to the construction of a building. However, the construction outfit will have the liberty to file afresh should KSK Land fail to comply with any demand made by GDBSB based on the corporate guarantee. GDBSB sued KSK Land to recover RM120.7m that the builder claims are the sum owed by Damai City in connection to the breach of the corporate guarantee. (The Edge)

Revenue Group Bhd's Danny Leong Kah Chern will be stepping down as group chief executive officer effective 23rd May 2023, some 5 months after assuming the position. However, the e-payment solutions provider’s board has asked Leong to reconsider his decision, adding that it understands Leong is reconsidering his resignation. (The Edge)

Five shareholders of Classita Holdings Bhd are seeking an injunction to block the lingerie maker from convening an extraordinary general meeting (EGM) on 27th March 2023 to vote on the group's proposed rights issue, pending the disposal of their lawsuit in which they are seeking to take legal action on behalf of the group against its board members and a vendor. Additionally, the injunction application also seeks to restrain Classita from holding any other EGM aimed at disposing of, changing, or diluting the composition of interest of the group’s shareholders. (The Edge)

Scientex Bhd’s unit Scientex Quatari Sdn Bhd (STX) has inked a joint venture (JV) with Indonesia’s Mustika Land and Japan’s Creed Group to make its maiden foray into building affordable homes in Indonesia. The JV company, which will develop the 40-ac Graha Mustika Tamansari township in Bekasi, Greater Jakarta, will be 60.0% owned by PT Graha Mustika Tamansari, while STX and Creed Property PH-1 Pte Ltd will hold 20.0% each. The JV company will acquire land from PT GMT for the township's Phase 1, which involves developing 400 affordable landed homes with an estimated gross development value of USD19.0m (RM85.5m). (The Edge)

Dayang Enterprise Holdings Bhd's wholly owned subsidiary DESB Marine Services Sdn Bhd has won a contract from Petronas Carigali Sdn Bhd for the provision of accommodation work boat. The value of the contract is based on work orders issued by Petronas Carigali during the contract duration. (The Edge)

Source: Mplus Research - 22 Mar 2023