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Mplus Market Pulse - 10 Apr 2023

Publish date: Mon, 10 Apr 2023, 09:26 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Ending the week slightly higher

Market Review

Malaysia:. The FBM KLCI (+0.2%) recovered some of its previous session losses on mild bargain hunting activities in selected Petronas-related and banking heavyweights. The lower liners ended mixed, while the healthcare sector (+1.6%) outperformed the mostly positive broader market.

Global markets:. Both Wall Street and European stockmarkets were closed in conjunction with the Good Friday public holiday. Meanwhile, Asia stockmarkets ended mostly higher with China markets closed at 1 month high on optimism of strong capital inflows and expectations of improving ties with Europe.

The Day Ahead

The FBM KLCI rebounded as bargain-hunting activities picked up in the final trading hour. Investors may continue to eye the rising tension between the US and China. Meanwhile, the market should focus on the US inflation data and FOMC Minutes which will be released this week to gauge the Fed’s aggressiveness in the future rate hikes. On the local bourse, bargain hunters may continue to dominate. Commodities wise, the Brent crude oil traded above USD85 per barrel, while the CPO price hovered above RM3,950. Gold price sustained above USD2,000.

Sector focus:. Given the solid crude oil price, the oil & gas counters may continue to shine across sectors. Besides, investors may favour gold counters amid global uncertainties. Defensive sectors such as telecommunications, utilities and consumer stapled may gain momentum.

FBMKLCI Technical Outlook

The FBM KLCI defended its daily EMA20 level as the key index closed higher after slipping between positive and negative territory. Technical indicators suggested that the momentum is mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. The resistance is pegged along 1,440-1,450, support is located around 1,400-1,410.

Company Brief

Betamek Bhd has partnered Managepay Systems Bhd to incorporate solar energy utilisation at its electronic products manufacturing facility in Rawang, Selangor, for a 25-year period. Managepay’s wholly owned subsidiary, ManagePay Resources Sdn Bhd (MRSB), will install, operate and maintain solar panels at Betamek’s Rawang facility with a minimum capacity of 515.2-kWp. The move will help reduce Betamek’s electricity bill by RM2.1- RM2.7m during the lifetime of the asset. (The Star)

CIMB Group Holdings Bhd’s investment bank, CIMB Investment Bank Bhd, has inked a deal to acquire KAF Equities Sdn Bhd from KAF Investment Bank Bhd (KAF IB). Details of the deal are not immediately known, although sources reported that the valuation was between 1.3x to 1.5x price-to-book (PBV) value. (The Edge)

TC Services Vietnam Co Ltd, a subsidiary of Tan Chong Motor Holdings Bhd, will no longer be the sole importer and distributor of completely-built-up (CBU) MG brand vehicles in Vietnam come end-June 2023. This follows the termination by SAIC Motor International Co Ltd (SMIL) of their overseas distribution agreement (ODA), effective from 30th June 2023, due to global strategic adjustments. (The Edge)

Press Metal Aluminium Holdings Bhd has secured an immediate export sale of aluminium ingots worth RM110.0m from Hong Kong’s Daching Enterprises Ltd. The companies have also sealed a 5-year export deal of the same product for RM670.0m. (The Edge)

Fajarbaru Builder Group Bhd has secured a RM125.3m construction contract for a mixed development project in Penang. Its wholly-owned unit Fajarbaru Builder Sdn Bhd has accepted the award from Penang Development Corp for Phase 4 of a 25- phase proposed mixed development. The tenure of the contract is 3 years, commencing from 15th June 2023 to 14th June 2026. (The Edge)

NWP Holdings Bhd through its indirect subsidiary NOOA Marine Sdn Bhd has secured a marine sand mining and transportation project worth RM36.0m in offshore Melaka for 2 years from Gezhouba Engineering (Malaysia) Sdn Bhd, an indirect subsidiary of China Gezhouba Group Ltd. (The Edge)

DRB-Hicom Bhd has clarified that the RM32.00bn expected investment in the development of the Automotive High-Tech Valley (AHTV) in Tanjong Malim, Perak, will not come solely from the project's main promoters, DRB-Hicom and Zhejiang Geely Holding Group Co Ltd. Instead, it is a collective investment that includes other foreign and local investors. (The Edge)

Spritzer Bhd plans to undertake an issue of up to 106.4m bonus shares on the basis of 1 bonus share for every 2 Spritzer shares held, with the entitlement date to be determined later. As at 28th March 2023, Spritzer’s issued share capital of RM223.2m consists of 212.9m shares including its 27.3m treasury shares. (The Edge)

UEM Sunrise Bhd has completed a RM70.0m issuance of Islamic medium-term notes (IMTN) in nominal value. The new IMTN, which has a 3-year tenure, matures on 7th April 2026. The proceeds will be for the company and its subsidiaries’ shariah-compliant general corporate purposes. (The Edge)

Ageson Bhd has proposed a 1-to-1 share exchange of its entire issued share capital of up to 565.9m shares and 254.3m irredeemable convertible preference shares (ICPS) for new ordinary shares and ICPS in Afton Bhd, as part of an internal reorganisation by way of a members scheme of arrangement. Ageson also plans to transfer its listing status on the Main Market to Afton. The board of Afton will then be appointed to mirror the board of Ageson, while the current directors of Afton shall resign. (The Edge)

YNH Property Bhd plans to launch a mixed-use development in Kuala Pilah, Negeri Sembilan in 2Q23. The developer had recently obtained a development order from the Kuala Pilah District Council for 2,200 units of mixed development township. First to be launched will be Phase One, which will consist of 500 residential units. (The Edge)

OCR Group Bhd has planned a private placement of up to 40.0% of its share base to raise an estimated RM27.0m to fund its development projects. The exercise comprises the issuance of up to 396.0m shares, based on its share base of 990.0m shares to independent third parties to be identified at an issue price to be determined later. It plans to use RM25.9m from the proceeds raised to fund existing and future development projects, and the remaining RM1.1m for the placement's estimated expenses. (The Edge)

Source: Mplus Research - 10 Apr 2023

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