Still range bound

Market Review

Malaysia:. The FBM KLCI (-0.2%) inched lower as market participants brushed off the strong 1Q23 China GDP data that expanded +4.5% YoY. The lower liners also ended lower, while the telecommunications & media sector (+1.7%) rallied for the third straight session to close at the highest level in almost a year.

Global markets:. Wall Street ended on a flat note as the Dow fell -0.03% as investors assessed the mixed bag of corporate earnings from corporate giants such as Goldman Sachs, Bank of America, Netflix and United Airlines. The European stockmarkets ended upbeat, but Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI extended its decline along with most of the regional markets as the sentiment remained weak despite positive China’s GDP growth. The local bourse may see further consolidation on the global front during the earnings season as the corporate results may be impacted from the interest rate hike environment. Meanwhile, we believe the mixed sentiment may persist on the local front as traders may be on the sidelines ahead of the special holiday on Friday. Commodities wise, the crude oil price hovered above USD84, while the CPO price climbed above RM3,800. Again, the gold price notched higher above USD2,000.

Sector focus:. The plantation sector could be under the limelight given the solid CPO price. Meanwhile, investors may pile into gold counters as gold prices remained strong above USD2,000. Also, we expect investors to favour telecommunications, utilities, and consumer stocks under this uncertain environment.

FBMKLCI Technical Outlook

The FBM KLCI trended lower to close just above its daily EMA9 level. Technical indicators, however, remained positive as the MACD Histogram extended a positive bar while the RSI hovered above 50. The support is set along 1,400-1,410, while the resistance is pegged around 1,440-1,450.

Company Brief

Comintel Corp Bhd has secured a contract worth RM229.8m from Builtamont Development Sdn Bhd to develop 2 apartment blocks in Taman Desa Aman, Kuala Lumpur. The job was secured by its wholly-owned subsidiary, Binastra Builders Sdn Bhd and is expected provide an additional income stream for the group over the next 3 financial years. (The Star)

FGV Holdings Bhd has announced that its 2 wholly owned units that are being sued for alleged fraudulent transactions and trespass relating to land in Sabah held under a native title have strongly refute the claim. The units intend to fully defend themselves and are in the process of engaging lawyers to represent them on the matter. (The Edge)

The Health Ministry has confirmed that Pharmaniaga Bhd’s concession agreement to provide medicine and medical supplies to the ministry’s facilities has been extended for 10 more years. Pharmaniaga was initially granted a concession agreement to supply public health facilities with medicines and medical supplies in 1994. (The Edge)

James Teo Bok Yu, the son of SHH Resources Holdings Bhd founder and managing director Datuk Teo Wee Cheng, has resigned as the group’s chief executive officer to pursue other interests. Wee Cheng and his wife Datin Teo Chan Huat, who is also the deputy managing director, are major shareholders in the group with a combined stake of 17.3%. (The Edge)

Censof Holdings Bhd has secured a RM6.0m project to develop a unit trust management system for Pelaburan Hartanah Bhd (PHB). This follows the acceptance of a letter of intent that Censof had received from PHB 8 months ago. Censof’s unit accepted the letter of award from PHB as application vendor for the project. PHB is the real estate investment holding arm of Yayasan Amanah Hartanah Bumiputera. (The Edge)

Cecile Jaclyn Thai, the daughter of Supermax Corp Bhd's executive chairman and major shareholder Datuk Seri Stanley Thai, has resigned from her post as nonexecutive director of the group, following a disagreement with the board. Cecile, 35, had expressed her disagreement on several matters discussed at the board meetings. (The Edge)

Petronas Chemicals Group Bhd (PetChem) is focusing on expanding its specialties portfolio after posting a strong performance for FY22, amid geopolitical conflicts, market volatilities and general industry challenges. PetChem landmark acquisition of Sweden-based Perstorp Group resulted in further diversification of the group’s product offerings, specifically for its specialty chemicals portfolio. (The Edge)

Malaysian Genomics Resource Centre Bhd (MGRC) has proposed a private placement to raise up to RM3.9m to be used for future viable investment and working capital. MGRC previously undertook a private placement in 2021 to raise RM24.2m, and then another in 2022, which saw it raise RM4.0m. (The Edge)

Axis Real Estate Investment Trust’s (Axis REIT) 1QFY23 net property income (NPI) improved marginally by 0.9% YoY to RM58.9m, due to rental from newly acquired properties and positive rental reversion in 2022. Revenue for the quarter rose 5.2% YoY to RM70.2m. (The Edge)

Ancom Nylex Bhd’s 3QFY23 net profit increased 8.1% YoY to RM16.4m, due to lower tax expenses and higher segmental contributions. Revenue for the quarter, however, fell 5.1% YoY to RM484.0m. (The Edge)

The High Court has thrown out a suit brought by 2 subsidiaries of Prolexus Bhd to compel South Malaysia Industries Bhd (SMI) to provide them with its record of depositor in their attempt to call for an extraordinary general meeting to remove the current directors of SMI, and declared that the units have abused the court process. In dismissing the suit, the 2 Prolexus subsidiaries namely Honsin Apparel Sdn Bhd and HiQ Media (Malaysia) Sdn Bhd, who collectively own a 10.0% stake in SMI had intentionally cited the wrong legislation in their legal action. (The Edge)

Source: Mplus Research - 19 Apr 2023