M+ Online Research Articles

Mplus Market Pulse - 24 Mar 2023

Publish date: Fri, 24 Mar 2023, 09:05 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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Onto a short consolidation

Market Review

Malaysia:. The FBM KLCI (-0.1%) edged mildly lower, dragged down by selected banking and telco heavyweights. The lower liners, however, rebounded, while the healthcare sector (+2.2%) outperformed the mostly positive sectorial peers on the emergence of new deadly fungal infection in US.

Global markets:. Wall Street ticked mildly higher as the Dow (+0.2%), driven by gains in banking giants, while new home sales in February 2023 unexpected rose. Sentiment turned slightly positive following the conclusion of the FOMC meeting. Both the European and Asia stockmarkets, however, closed mixed.

The Day Ahead

The FBM KLCI saw marginal losses amidst mixed regional markets, stemming from selling pressure in most of the banking heavyweights. In anticipation that rate hiking campaign may be nearing an end, coupled with the US Treasury Secretary Janet Yellen’s reassurance on the safety of Americans’ deposits, the local bourse and regional markets may rise in tandem with Wall Street’s movements. Investors however, may continue to monitor the development of the banking sector in the US as uncertainties remain in place. Commodities wise, the Brent crude oil traded above USD75, while the CPO price hovered above RM3,500. Gold price inched higher from USD1,990.

Sector focus:. Investors may favour the technology stocks given the renewed optimism in Wall Street. Besides, the utilities, telecommunication and consumer staples may be under the limelight as global risks are not abated. On the other hand, the plantation sector may see selling pressure amid declining CPO prices.

FBMKLCI Technical Outlook

The FBM KLCI booked mild decline after paring most of its intraday losses. Technical indicators remained mixed as the MACD Histogram extended a positive bar, while the RSI continued to hover below 50. Investors should monitor support along 1,370-1,380 and resistance 1,420-1,440.

Company Brief

Sunway Construction Group Bhd (SunCon) has secured a RM604.9m contract from Malaysia Rapid Transit System Sdn Bhd. Its wholly owned subsidiary Sunway Construction Sdn Bhd (SCSB) signed the letter of acceptance from Malaysia Rapid Transit. The RTS Link Project is for a period of 26 months and is expected to be completed by 2Q25. (The Star)

Yinson Holdings Bhd’s 4QFY23 net profit jumped 158.5% YoY to RM168.0m, on improved revenue. Revenue for the quarter soared 164.5% YoY to RM1.96bn. A final single tier dividend of 1.00 sen per share, payable on 30th August 2023 was declared. (The Edge)

Datuk Abdul Razak Abdul Majid, who has served Tenaga Nasional Bhd (TNB) for 36 years, has been appointed as the group’s new non-independent non-executive chairman for a 2-year term with effect from 27th March 2023. Abdul Razak, 72, replaces former Umno lawmaker Datuk Seri Hasan Arifin, who resigned from the position with effect from 1st January 2023, having served for 15 months. Abdul Razak has a direct interest of 26,562 shares in TNB. (The Edge)

Gamuda Bhd’s 2QFY23 net profit gained 9.9% YoY to RM194.6m, as stronger construction and property earnings filled in the void of its highway earnings following the divestments of its four highways last year. Revenue for the quarter climbed 18.4% YoY to RM1.44bn. (The Edge)

Eco World Development Group Bhd’s 1QFY23 net profit fell 10.0% YoY to RM57.0m, affected by the earlier Chinese New Year celebrations in January 2023, which slowed down work progress during the festive season. Revenue for the quarter fell 8.5% YoY to RM484.7m. (The Edge)

Chin Hin Group Property Bhd has emerged as a substantial shareholder of NCT Alliance Bhd, after subscribing to 75.4m shares in the latter via private placement. The shares amount to 5.6% of the voting shares in NCT upon completion of the share placement. The property developer paid 32.0 sen per share, which amounts to RM24.1m, from internally-generated funds for its stake in NCT. (The Edge)

Wellspire Holdings Bhd's 75.0% owned subsidiary, Bai Li Enterprise Co Ltd, has entered into a distribution agreement with HH International Enterprise Ltd to distribute snack products in Thailand. HH is the wholly-owned subsidiary of Weilong Delicious Global Holdings Ltd, a company listed on the Main Board of the Hong Kong Stock Exchange. (The Edge)

Straits Energy Resources Bhd’s 38.0%-associate CBL International Ltd has been granted in-principle approval to list on the Nasdaq Capital Market on 23rd March 2023. Nasdaq has via email dated 20th March 2023 approved in-principle the listing and registration of CBL International's shares on the Nasdaq stock market. (The Edge)

Ta Win Holdings Bhd wholly-owned subsidiary, Cyprium Capital Sdn Bhd, is acquiring Asia Poly Holdings Bhd's 15.0% stake in Cyprium Wire Technology Sdn Bhd (CWT) for RM12.0m. The proposed acquisition is undertaken to increase the company’s effective equity interest in CWT which would result in CWT being a 66.0%-owned subsidiary of the company which would represent greater control in decision making by the company to drive and influence the future strategic direction of CWT.. (The Edge)

Green Packet Bhd saw its second largest individual shareholder Leong Seng Wui disposing of all his shares in the group on 20th March 2023 and 21st March 2023. On 23rd March 2023, Green Packet stated that Leong, who is also the group’s executive director, had ceased being its substantial shareholder after he disposed of all of his shares early this week. (The Edge)

Pasukhas Group Bhd has reported that the value of the contract the group won last year to undertake concrete substructure works for the head building of the Dexcom Malaysia Factory 3 project in Penang has been increased to RM12.7m, from RM7.1m. It has accepted an amendment to its agreement with Exyte Malaysia Sdn Bhd to revise the contract value agreed to in August 2022. Another amendment involved the final acceptance date being extended to 30th June 2023, from 9th January 2023. (The Edge)

Source: Mplus Research - 24 Mar 2023

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