M+ Online Research Articles

Mplus Market Pulse - 29 Mar 2023

Publish date: Wed, 29 Mar 2023, 09:16 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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Flirting around 1,400

Market Review

Malaysia:. The FBM KLCI (+0.9%) staged a strong rebound helped by the improved sentiment on the banking crisis in the US and Europe. The lower liners, however, edged mildly lower, while the energy sector (+2.6%) outperformed after taking cue from the rally in oil prices.

Global markets:. Wall Street edged mildly lower as the Dow fell 0.1%, dragged down by weakness in technology shares, coupled with the higher treasury yields. The European stockmarkets extended their gains, while Asia stockmarkets closed mostly positive.

The Day Ahead

The FBM KLCI rebounded above the key 1,400 level after a relief rally on Wall Street amid the First Citizens Bank-SVB deal in the US. Nevertheless, sentiment seems not recovering as smoothly in the US and we expect profit taking activities on the big caps may emerge on the local front. Meanwhile, investors are shifting their focus on the economic outlook under the elevated interest rate environment. Commodities wise, the Brent crude oil prices have rebounded and supported firmly above the USD78 zone, while the CPO traded above RM3,700. Gold price traded above USD1,970.

Sector focus:. The energy sector may turn positive amid the firmer crude oil prices. Besides, gold related counters may be under the limelight in the shorter horizon as the gold price has rebounded above USD1970 level. On the other hand, technology stocks may remain under pressure in line with Nasdaq’s movement.

FBMKLCI Technical Outlook

The FBM KLCI regained momentum to close above the key 1,400 level. Technical indicators remained mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. Resistance is pegged around 1,420-1,440, while support is located at 1,370-1,380.

Company Brief

Bursa Malaysia Securities Bhd (Bursa Securities) has decided to delist the Scomi Group Bhd’s securities from the official list of Bursa Securities pursuant to paragraph 8.04 of the Main Market Listing Requirements. Bursa Securities had, via a letter dated 28th March 2023, dismissed the company’s appeal for a further 6 months extension from the decision of Bursa Securities to submit its regularisation plan to the relevant authorities for approval. (The Star)

Kamunting Management Services Sdn Bhd, an indirect wholly-owned subsidiary of Eastern & Oriental Bhd (E&O), has entered into a share sale agreement (SSA) with Penang Development Corporation (PDC) to acquire the remaining 40.0% of the issued share capital in E&O-PDC, comprising 14,000 ordinary shares, for RM47.0m. The acquisition of 40 per cent shareholding in E&O-PDC from PDC will enable E&O to own 100 per cent shareholding in Tanjung Pinang Development Sdn Bhd (TPD) where the main development activities for E&O Group will be concentrated on over the next 30 years. (The Star)

ECA Integrated Solution Bhd’s 1QFY23 net profit stood at RM4.1m on top of a revenue of RM10.6m. There is no official comparative figure following ECA’s ACE Market debut in November 2022. Nevertheless, 1QFY23 net profit accounted for more than half of FY22 net profit. (The Edge)

Meta Bright Group Bhd announced that its wholly owned subsidiary FBO Land (Setapak) Sdn Bhd has issued offer letters regarding its solar programme to 5 mosques and surau in Johor, to which the 5 clients have accepted the letters. The offer letters entail the design, finance, installation, construction, commission, operation and maintainance of the solar photovoltaic (PV) generating plants at the client’s site leveraging on FBO’s status of a registered solar PV investor. The five letters bring Meta Bright’s order book to about RM15.5m. (The Edge)

Comintel Corp Bhd’s 4QFY23 net profit stood at RM5.6m vs. a net loss of -RM7.9m recorded in the previous corresponding quarter, thanks to higher revenue from its construction segment. Revenue for the quarter jumped 175.0% YoY to RM74.2m. (The Edge)

Puncak Niaga Holdings Bhd has bagged a RM82.9m water pipe replacement subcontract in Johor. Its wholly owned subsidiary Puncak Niaga Construction Sdn Bhd was awarded the sub-contract by Jalur Cahaya Sdn Bhd, the main contractor for the pipe replacement project. The project is expected to be completed by 17th January 2024, with a defect liability period of 12 months from the issuance of the certificate of practical completion. (The Edge)

Enra Group Bhd has bagged a bareboat charter contract worth at least USD9.3m (RM41.0m) for the provision and chartering of its chemical/oil tanker Ratu Enra. Its subsidiary Hexagon Energy Logistics Sdn Bhd had on 27th March 2023 entered into the bareboat charter contract with 7Seas Maritime Transportation (FZCO), a company incorporated in the United Arab Emirates. The contract has a tenure of 5 years, with a mutual option to extend it further for another 5 years. (The Edge)

Carimin Petroleum Bhd has secured a work order to provide an anchor-handling tugboat for Petronas Carigali Sdn Bhd for a period of about 6 months. The work order awarded to its wholly owned subsidiary Carimin Marine Services Sdn Bhd on 17th February 2023 is for up to 184 days, with an extension option of up to 30 days. (The Edge)

Apollo Food Holdings Bhd’s 3QFY23 net profit jumped 113.0% YoY to RM10.8m, on higher margins and sales revenue. Revenue for the quarter rose 31.0% YoY to RM71.1m. (The Edge)

Just weeks after completing a private placement exercise, Mikro MSC Bhd has proposed to undertake another private placement of up to 97.2m new shares, equivalent to 15.0% of its total issued share capital, to part-finance the purchase of a 10.0% stake in a biomass fuel exporter. The shares are to be placed out to thirdparty investors to be identified and secured at a later date. The company expects to raise RM15.6m from the exercise, based on an indicative issue price of 16 sen per share. (The Edge)

Shareholders of LEAP Market-listed Lim Seong Hai Capital Bhd (LSH Capital) have paved the way for the construction-related products and service provider to transform into a full-fledged construction and construction-related services and solutions provider. This came after minority shareholders at an extraordinary general meeting (EGM) on 28th March 2023, unanimously approved the acquisition of building construction contractor Astana Setia Sdn Bhd and Lim Seong Hai Ventures Sdn Bhd (LSH Ventures), a debt settlement cum share subscription agreement with LSH Ventures, and diversification of its business to include property development activities. The corporate proposals entail a combined outlay of RM157.6m, which will be fully funded via the issuance of 350.3m new LSH Capital shares at RM0.45 apiece. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has bagged an engineering, procurement, construction and commissioning (EPCC) sub-contract valued at RM16.8m from Majestika Sdn Bhd. Its unit SCIB Industrialised Building System Sdn Bhd has secured the sub-contract for the construction of a school, Sekolah Kebangsaan Tambay, in Kota Samarahan, Sarawak, over a duration of 14 months. (The Edge)

Perdana Petroleum Bhd's wholly-owned subsidiary Perdana Nautika Sdn Bhd has received a work order from PETRONAS Carigali Sdn Bhd for the provision of an accommodation work barge (AWB), which will has commenced on March 20, 2023 for a duration of 229 days. Perdana Petroleum said the contract is expected to contribute positively to the earnings and net assets for the financial year ending Dec 31, 2023. (The Star)

Source: Mplus Research - 29 Mar 2023

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