Lingering cautiousness capped recovery

Market Review

Malaysia:. The FBM KLCI (+0.1%) edged marginally higher as further upsides were capped by the lingering cautious sentiment. The lower liners, however, ended mixed, while the telecommunications & media sector (+1.3%) outperformed on the prospects of opening 5G ecosystem to more partners.

Global markets:. Wall Street retreated as the Dow fell 0.4% after several US Federal Reserve officials are backing for further monetary policy tightening, while treasury yields advanced. The European stockmarkets marched higher, while Asia stockmarkets closed mostly upbeat.

The Day Ahead

The FBM KLCI posted mild gains amidst the positive regional markets sentiment as investors anticipated a less-aggressive rate hike by the US Fed. Following the pullback on Wall Street, investors may trade on a cautiously positive mode prior to the Hari Raya Aidilfitri festive celebration, while all eyes will be on Eurozone’s and Malaysia’s inflation rate this week. Commodities wise, the Brent crude oil traded above USD86 per barrel mark, while the crude oil price hovered above RM3,550. Gold price remained resilient above USD2,000.

Sector focus:. We reckon that the commodities related sectors such as energy and plantation may outperform given the solid crude oil and CPO prices. Meanwhile, investors may continue to like gold related counters as safety havens while turning away from technology sector amid risk-off mode.

FBMKLCI Technical Outlook

The FBM KLCI ended the week with marginal gains as late bargain hunting activities pushed the key index into the positive territory. Technical indicators remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above 50. The resistance is pegged along 1,440-1,450, while the support is located around 1,400-1,410.

Company Brief

Malaysia Building Society Bhd (MBSB) has received approval for the proposed acquisition of Malaysian Industrial Development Finance Bhd (MIDF) from Permodalan Nasional Bhd. The bank has received a notification from Bank Negara that the Minister of Finance has granted approval for the proposed acquisition. The proposed transaction would result in a well-capitalised financial services group which is financially resilient to compete in the market with a stronger balance sheet. (The Star)

Sime Darby Plantation Bhd (SDP) is disposing of 2 of its indirect subsidiaries in Indonesia for a total cash consideration of 1.75trn Indonesia rupiah (RM518.0m). The two oil palm plantation firms are owned by SDP units PT Anugerah Sumbermakmur (ASM) and Minamas Gemilang (MGG). ASM and MCG have agreed to sell the 2 firms to PT Global Berkat Usahatama. (The Edge)

Alcom Group Bhd is buying 7.1-ac of land in Klang for RM56.0m to undertake a mixed development project. Alcom is acquiring the land from 88 Legacy Sdn Bhd at a 3.5% discount to the aggregate market value of RM58.0m as appraised by an independent valuer. Alcom has proposed to develop a mixed development project comprising commercial lots, SOHO (shop-office home-office) and service apartments on the land. (The Edge)

A unit of Fajarbaru Builder Group Bhd is paying RM45.7m to Lembaga Pemegang Amanah Yayasan Pahang (Yayasan Pahang) to secure timber logs in 2 locations in Kuantan, Pahang. The unit, Grand Achievement Sdn Bhd, has been appointed the sole and exclusive contractor to extract and purchase all standing timber logs at HS Remen Chereh, Mukim Hulu Kuantan, an approximate land area of 7,500-ac; and HS Berkelah, Mukim Hulu Lepar, an area of about 1,321-ac. (The Edge)

PLS Plantations Bhd has announced that its binding term sheet (BTS) with Landasan Erajaya Sdn Bhd was allowed to lapse after the 2 companies formed a direct joint-venture. The BTS lapsed as PLS Plantations and Landasan Erajaya had formed PLS LESB Sdn Bhd, a direct 51:49 JV partnership to plant durian and cash crops, and undertake other plantation activities. (The Edge)

UEM Sunrise Bhd has completed the issuance of RM340.0m in nominal value Islamic medium-term notes (IMTNs). The notes were part of an IMTN programme which along with an Islamic commercial papers programme have a combined aggregate limit of up to RM4.00bn in nominal value. The new IMTNs will mature on 15th April 2024, 14th April 2025 and 14th April 2028. (The Edge)

TAFI Industries Bhd wholly-owned subsidiary is not proceeding with a RM23.6m contract to construct the health ministry's staff quarters in Labuan. The subsidiary, TA Furniture & Projects Sdn Bhd, was awarded the contract by Lambaian Delta Sdn Bhd in December 2022. The parties have mutually agreed to terminate the contract. It did not disclose the reason for the termination. (The Edge)

AmFIRST Real Estate Investment Trust’s (AmFIRST REIT) 4QFY23 net property income (NPI) slipped 2.4% YoY to RM15.7m, due to higher property expenses. Revenue for the quarter, however, gained 4.8% YoY to RM25.7m. (The Edge)

Atta Global Group Bhd's shares and warrants will be traded under its new name Mayu Global Group Bhd with effect from 18th April 2023. The new stock short name will be “Mayu”, replacing the old stock short name “Atta”. (The Edge)

LBS Bina Group Bhd's indirect subsidiary Leaptec Engineering Sdn Bhd has entered into a Memorandum of Understanding (MOU) with Türkiye-based Desan Deniz Ins San A S to explore the feasibility of developing a shipyard in Tanjung Bruas, Melaka. The proposed shipyard, to undertake ship building and ship repair works, is expected to be developed in three phases on 1,200-ac of reclaimed land, with a value of over RM2.00bn. (The Edge)

Supermax Corp Bhd has announced that the time frame to implement a long-term incentive plan (LTIP) aimed at rewarding its directors and employees has lapsed. The proposed LTIP, which comprises a proposed employee share option scheme and a share grant plan, was supposed to be in force for an initial 5 years. (The Edge)

The Armed Forces Fund Board (LTAT) has avoided the need to seek the finance minister’s approval for its bid to privatise Boustead Holdings Bhd, as the exercise will not result in the board holding more than 50.0% effective interest in Affin Bank Bhd. The changes in regulatory approval came after LTAT’s move to divest a 5.0% stake in Affin Bank to State Financial Secretary Sarawak for RM221.7m cash on 13th April 2023, which leaves the fund with a 28.3% direct stake. (The Edge)

Gamuda Bhd’s Gamuda Land’s Bay Street commercial shops in Gamuda Cove have achieved a 90.0% take-up rate following its launch over the weekend. Bay Street has a total of 47 units comprising two and three-storey retail shops with built-up sizes ranging from 3,300 to 7,557 sqf with prices ranging from RM2.0m to RM3.7m. Upon its completion in 2026, the commercial shops will cater to more than 2,600 homes in Gamuda Cove. (The Edge)

S P Setia Bhd has teamed up with social enterprise Kloth Cares for a fabric upcycling drive, as part of its environmental, social and governance initiatives, and in conjunction with its Raya theme for 2023, Lembaran Baru, Setia Bersama. As part of the fabric upcycling drive, 41 fabric upcycling bins have been allotted at S P Setia’s sales galleries and venues around Malaysia, including Melbourne and Singapore, to collect pre-loved curtains and used fabrics. (The Edge)

Source: Mplus Research - 17 Apr 2023