Tripped below 1,400

Market Review

Malaysia:. The FBM KLCI (-0.8%) extended its losses to close marginally below the 1,400 psychological level, dragged down by selected banking and Petronas-linked heavyweights. The lower liners also finished lower after snapping a 3-day rebound, while 10 of the 13 major sectors finished in red.

Global markets:. Wall Street turned positive with the recovery seen across the 3 major indices and were driven by the rebound in banking stocks after authorities reassured that the financial stability is in place. The European stockmarkets ended in red, while Asia stockmarkets closed mostly negative.

The Day Ahead

The FBM KLCI slumped, taking cue from the subdued trading activities on the regional markets. However, the resumed buying interest on the Wall Street indices overnight may indicate investors’ confidence and could spillover to our local bourse. Hence, we believe that some bargain hunting activities are likely to emerge despite the worries over the banking sector. Meanwhile, the US consumer confidence and 4Q22 GDP growth rate should take the center stage this week. Commodities wise, the Brent crude oil traded higher towards USD75, while the CPO price hovered above RM3,500. Gold prices remained resilient above USD1,950.

Sector focus:. Under global uncertainties, we believe sectors such as utilities, health care, and consumer stapled will outperform. Besides, the technology sector may see temporary relief in view of positive performance on Wall Street Nasdaq. Meanwhile, the property sector’s trading activities are building up following betterthan-expected earnings.

FBMKLCI Technical Outlook

The FBM KLCI has again, fallen below the key 1,400 level after extending its losing streak. Technical indicators remained mixed as the MACD Histogram extended a positive bar, while the RSI is hovering below 50. Support is pegged along 1,370- 1,380 and resistance is located around 1,420-1,440.

Company Brief

Konsortium Transnasional Bhd’s (KTB) wholly-owned unit Transnational Builder Sdn Bhd has bagged a RM153.1m contract to provide labour and materials for the earthwork, piling, building, internal and major infrastructure works of a 1Malaysia People’s Housing Programme (PR1MA) project in Pahang. Its construction unit today received a letter of award from Aman Wijaya Sdn Bhd to undertake the project on 40.5-ha in Kuantan which comprises 340 single-storey semi-detached houses, eight single-storey bungalow houses, 652 single-storey terrace houses, and 19 double-storey shop offices. Relevant works are expected to start from July 2023 and be completed by June 2026. (The Star)

Axiata Group Bhd has appointed the group’s chief financial officer (CFO) and jointinterim group CEO Vivek Sood as managing director and group CEO, effective 24th March 2023, while his joint-interim CEO partner Dr Hans Wijayasuriya was appointed group executive director and CEO of the group’s telco business. As for the CFO post, Axiata said the group’s chief corporate development officer Lila Azmin Abdullah will be taking over the position from Vivek. (The Edge)

Minority shareholders of Nestlé (Malaysia) Bhd have been advised by KAF Investment Bank Bhd (KAF IB) to vote in favour of the resolution pertaining to its acquisition of Wyeth Nutrition (Malaysia) Sdn Bhd from Wyeth (Hong Kong) Holding Co Ltd for RM165.0m to be tabled at the forthcoming extraordinary general meeting at end-April 2023. Independent adviser KAF IB is of the view that the proposed acquisition is fair and reasonable and is not detrimental to the noninterested shareholders. (The Edge)

Dagang NeXchange Bhd has entered into an agreement with Saudi-based Ajlan & Bros Holding Group to establish a joint-venture company in the Kingdom of Saudi Arabia to undertake the business of system integration in smart cities and large enterprise projects in the Middle East and North Africa, as well as projects of Ajlan and its subsidiaries. (The Edge)

Datuk Seri Adnan Wan Mamat, a substantial shareholder of PUC Bhd, exited the group after disposing of 125.0m shares representing 6.9% of the share base of the group, via an off-market transaction. Adnan, a non-independent non-executive director of the company, was its second-largest shareholder prior to the disposal, after GPVF Sdn Bhd with a 10.0% stake. GPVF is a wholly-owned subsidiary of Genting Plantations Bhd. (The Edge)

Menang Corp (M) Bhd’s former director Dr Christopher Shun Kong Leng has ceased to be a substantial shareholder of the property developer, whose share price has jumped over the past few days, after he sold off his entire equity interest in the company of 48.1m shares or a 9.5% stake via a direct business transaction. (The Edge)

Salcon Bhd, via its indirect wholly-owned subsidiary Nusantara Megajuta Sdn Bhd, has entered into a joint venture agreement (JVA) with Exsim Kebun Teh Sdn Bhd to develop serviced apartments and retail units on two parcels of land measuring a total 51,476.2 sqm (12.7-ac) of leasehold land. Under the terms of the JVA, Exsim will pay RM140.0m as landowner's entitlement to Salcon within either 46 months of the first payment of RM10.0m after the conditions are fulfilled, or 37 months from the issuance of the advertising permit and developer’s licence, whichever is earlier. (The Edge)

Swift Haulage Bhd has increased its stake in Global Vision Logistics Sdn Bhd (GVLSB) after it acquired a 17.5% stake in the latter for a total purchase consideration of RM19.2m, bringing the group’s ownership in the warehouse service provider to 42.5%. GVLSB is the leaseholder of the land measuring 70.9-ac and is currently in the process of developing 6.0m sqf of warehouse space, which will be done in phases. (The Edge)

Prolexus Bhd’s 2QFY23 net profit surged 22.8x YoY to RM22.8m, on the back of higher revenue and gain on other investments. Revenue for the quarter rose marginally by 1.9% YoY to RM63.2m. (The Edge)

Astino Bhd’s 1QFY23 net profit sank 72.7% YoY to RM3.0m, dragged by lower profit margins due to the higher cost of materials. Revenue for the quarter fell 11.5% YoY to RM143.3m. (The Edge)

Five shareholders of Classita Holdings Bhd have failed in their attempt to block the lingerie maker from convening an extraordinary general meeting (EGM) to vote on the company’s proposed rights issue pending the conclusion of their lawsuit. The company is to proceed with its EGM to vote on the group’s proposed rights issue fixed on 27th March 2023. (The Edge)

Careplus Group Bhd has succeeded in striking out Petrolife Aero Sdn Bhd’s RM27.1m suit against it over an alleged breach of a liquefied natural gas supply agreement. The High Court had allowed its wholly-owned Rubbercare Protection Products Sdn Bhd's (RPP) application to strike out Petrolife’s suit, with RM5,000 costs to be paid to RPP. (The Edge)

Source: Mplus Research - 27 Mar 2023