Recovery may resume

Market Review

Malaysia:. The FBM KLCI (-0.04%) edged mildly lower on the persistent concern over rising recessionary risk, but downside was largely cushioned yesterday. The lower liners, however, ended mixed, while the technology sector (+0.8%) outperformed the mixed sectorial peers.

Global markets:. Wall Street notched higher as the Dow climbed 1.1% amid higher weekly jobless claims and moderating producer prices data that boosted the prospects of interest rate hike cycle may near tipping point. The European stockmarkets extended their gains, but Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI finished largely unchanged after recovering most of its intraday losses; foreign funds turned net buyers for the first time in the past 5 trading days. Tracking the bullish sentiment on Wall Street overnight, we reckon that bargain hunting activities may emerge at least for the session and we expect a broad base recovery to take shape. Commodities wise, the Brent crude oil experienced a mild retracement towards USD86, while the CPO hovered above RM3,700. Gold prices solidify above USD2,000 as investors could be flocking for safe-haven assets following the growing concerns of recessionary risk.

Sector focus:. We continue to favour gold-related stocks as a proxy towards the ongoing market volatility. The technology sector may continue to gain momentum, taking cue from the positive developments on Nasdaq overnight. On the flipside, the plantation sector may stay downbeat on the prospects of weak export demand.

FBMKLCI Technical Outlook

The FBM KLCI ended relatively unchanged to stay afloat above daily EMA9 as downside remain well cushioned. Technical indicators remained positive as the MACD Histogram extended a positive bar, while the RSI hovered slightly above 50. The resistance remains located at 1,440-1,450, while the support is pegged around 1,400-1,410.

Company Brief

Affin Bank Bhd has reported that the Armed Forces Fund Board (LTAT) has divested 112.6m shares in the bank to the State Financial Secretary Sarawak for RM221.7m via a direct business transaction. The bank sold the shares, representing 4.9% of the total issued shares, for a cash consideration of RM1.97 per share. (The Star)

Supermax Corporation Bhd is urging its former migrant employees to apply for reimbursement of any fees paid to obtain employment at the company, to complete the transformation of its labour policies. It continues to conduct an outreach campaign in its effort to follow up on earlier efforts implemented in Nepal and Bangladesh, asking that former workers who paid recruitment fees to obtain employment be reimbursed. (The Edge)

Country Heights Holdings Bhd's founder and largest shareholder Tan Sri Lee Kim Yew claimed that he did not file for bankruptcy and is still far from insolvency. The issue was escalated by Patrick Healy, a former officer of US-based Club Excellence Inc which had already been wound up. Healy went to the US arbitration court to seek RM3.0m from Lee. Lee claimed that the court had granted a court judgement in favour of Healy without him being present, owing to the distance between Malaysia and the US, and the Covid-19 pandemic, among others. (The Edge)

Sarawak Cable Bhd (SCable) and KAB Energy Holdings Sdn Bhd, a wholly-owned subsidiary of Kejuruteraan Asastera Bhd (KAB), have mutually agreed to extend the conditional period for the proposed disposal of 300,000 shares in PT Inpola Mitra Elektrindo, which owns and operates a mini hydroelectric power plant in North Sumatera, Indonesia, for another 3 months to 31st July 2023. (The Edge)

Perak Corp Bhd has been granted a further 6-month extension until 9th August 2023 by Bursa Securities to submit its regularisation plan to address the company’s financial condition. Perak Corp slipped into Practice Note 17 status in February 2020, as a result of a default in payment and its inability to declare solvency. (The Edge)

Reservoir Link Energy Bhd has inked an agreement to undertake the construction, commissioning and operations of a new wastewater treatment plant in Indonesia. The group’s 85.0%-owned subsidiary PT EnviroTech Akva Indonesia entered into an agreement with PT Unilever Oleochemical Indonesia (PTUOI) for the new plant in PTUOI's premises at Sei Mangkei, North Sumatra. (The Edge)

Yong Tai Bhd has scrapped the mining agreement to undertake a gold mining project on a 100-ha site in Bukit Kenderak in Pahang's Lipis district. Upon termination, the mining agreement shall have no further force or effect and neither party shall have any claim whatsoever against the other in respect of the mining agreement. (The Edge)

SFP Tech Holdings Bhd has proposed to undertake a bonus issue of up to 1.60bn shares on the basis of 2 bonus shares for every 1 existing share held, on an entitlement date to be determined later. (The Edge)

Icon Offshore Bhd has proposed to replace its existing employee share scheme (ESS) with a new long-term incentive plan for its employees and executive director Datuk Seri Hadian Hashim, which will be in force for 10 years. As such, it is seeking to end the existing ESS ahead of its expiration period at end-2024. (The Edge)

PLS Plantations Bhd has aborted its plan to invest RM50.0m into a 51:49 JV with Landasan Erajaya Sdn Bhd to undertake cash crop plantation activities in Pahang. PLS and Landasan Erajaya have mutually agreed to not further extend their binding term sheet for the collaboration. (The Edge)

The High Court has fixed another case management for the judicial review application by a joint venture (JV) company between Tenaga Nasional Bhd (TNB) and Malakoff Corp Bhd against the Inland Revenue Board, as the parties engage in out-of-court settlement negotiations. The next case management will be held on 23rd May 2023 for the parties to update the court on the outcome of the negotiations. (The Edge)

Infomina Bhd’s 3QFY23 net profit stood at RM22.7m on top of revenue of RM109.7m. There was no yearly comparison as the group made its debut on the ACE market of Bursa Malaysia in November 2022. (The Edge)

Metro Healthcare Bhd, which is listed on the LEAP Market of Bursa Malaysia has received a letter from its founder, executive chairman and major shareholder Dr Tee Swi Peng @ Tay Swi Peng requesting the board of directors to consider a transfer to the ACE Market. Metro’s board will deliberate on the proposal. (The Edge)

Source: Mplus Research - 14 Apr 2023