Selling pressure escalated

Market Review

Malaysia:. The FBM KLCI (-0.5%) trended lower as selling pressure were evident in more than two-thirds of the key index components yesterday. The lower liners also closed lower, while the utilities sector (+0.03%) that was defensive in nature was the sole outperformer amongst the sectorial peers.

Global markets:. Wall Street edged lower as the Dow slipped -0.2% after investors digested another flurry of mixed corporate earnings releases, while the Fed's Beige Book survey reported that inflation and hiring slowed across the 12 districts. Both the European and Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI drifted south, marking the third-session of decline along with the weaker regional markets’ sentiment ahead of the Hari Raya public holiday; foreign funds turned net sellers for the second session with 5-day cumulative net selling value standing at RM46.6m. Meanwhile, given the muted tone on Wall Street, we expect the regional markets and local bourse could continue to trade in a rangebound manner. Commodities wise, Brent crude oil price slid towards USD82 per barrel, CPO traded above RM3,750, while gold price fell below USD2,000 amid strengthening USD.

Sector focus:. Given the lower crude oil price, the energy sector may see selldown. Meanwhile, gold related counters may see selling pressure amid weakening gold prices. On the other hand, we expect the defensive nature sectors such as the telecommunication, banking, and consumer stapled sectors may stay focused amid prevailing cautious sentiment.

FBMKLCI Technical Outlook

The FBM KLCI slid below its daily EMA9 and EMA20 level amid continuous profittaking activities. Technical indicators turned mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. The support is pegged along 1,400-1,410, while the resistance is set around 1,440-1,450.

Company Brief

GDB Holdings Bhd has claimed that its subsidiary, Grand Dynamic Builders Sdn Bhd (GDBSB) was wrongfully terminated from the development of the 8 Conlay. GDB reported that DCSB has no right to determine GDBSB’s employment under the main contract given that there are existing and continuous breaches by DCSB for failure to effect payment of certified sums due and owing to GDBSB under interim certificates. GDBSB has exercised its immediate right to immediately determine the contract and has served a notice of determination dated April 19 to DCSB pursuant to Clause 26.2 of the PAM Contract and 4th January 2023 agreement. (The Star)

Cecile Jaclyn Thai, the daughter of Supermax Corp Bhd executive chairman and major shareholder Datuk Seri Stanley Thai, claimed she quit as the group's nonexecutive director as she had experienced bullying and silencing from other board members, including her father, while trying to uphold her fiduciary duties. In turn, Supermax has dismissed Cecile's allegations. The group has responded to and refuted every point that Cecile raised in her letter of resignation. (The Edge)

Carlsberg Brewery Malaysia Bhd is likely to see weaker earnings growth in 2023, as the low base effect dissipates. The brewer’s annual net profit surged 57.7% YoY to RM317.1m in FY2022, driven by top-line growth and higher profits in both its Malaysia and Singapore operations, combined with a higher share of profit from Lion Brewery (Ceylon) plc (LBCP) in Sri Lanka. (The Edge)

Passenger traffic at the 39 airports operated by Malaysia Airports Holdings Bhd (MAHB) in the country continued to gain traction in March 2023, more than doubling to 6.7m (+119.1% YoY). International passenger movements surged 604.7% YoY to 3.0m. The airport operator remains optimistic about travel demand, on the back of active resumption of airline operations and routes at its airports nationwide. (The Edge)

AirAsia Super App, one of the portfolio companies of Capital A Bhd, has clarified that it is authorised to sell flights from any airline on its online travel agency (OTA) platform as it holds a travel agent licence. It is also an International Air Transport Association-accredited (IATA) agent to sell flight tickets. (The Edge)

Siab Holdings Bhd has accepted a settlement arrangement from Yong Tai Bhd following their mutual agreement to terminate two high-rise property projects with a combined outstanding contract value of RM190.5m. The projects are Impressions U-Thant, a 10-storey luxury condominium with 108 units at Jalan U Thant, Kuala Lumpur, and Amber Cove, a 36-storey serviced apartment block with 838 units at Impression City, Kota Laksamana, Melaka. (The Edge)

GIIB Holdings Bhd is selling a 1.7-ha parcel of industrial land in Tuaran, Kota Kinabalu, Sabah to metal and steel product wholesaler Kozai Realties Sdn Bhd for RM14.0m cash. GIIB wholly-owned subsidiary Big Wheel Green Tyres Sdn Bhd has entered into a sale and purchase agreement with Kozai Realties for the proposed disposal. (The Edge)

KIP Real Estate Investment Trust's (REIT) 3QFY23 net property income grew 13.3% YoY to RM16.4m, on higher revenue from three newly acquired industrial properties and higher occupancy rates recorded from its retail segment. Revenue for the quarter rose 15.9% YoY to RM21.8m. (The Edge)

Bursa Malaysia has granted a time extension of 6 months to Iskandar Waterfront City Bhd (IWCity) to submit its regularisation plan following the company’s status as a Paragraph 8.03A-affected listed issuer. Paragraph 8.03A-affected listed issuer means that the obligations of the affected listed issuer remain the same as that of a Practice Note 17 (PN17) issuer, including the requirement to submit and implement a regularisation plan within the prescribed time frame. (The Edge)

OCR Group Bhd’s units are being sued by their contractor over alleged payment default of RM30.9m in relation to projects in Kuantan and Petaling Jaya. Kencana Amanjaya Sdn Bhd is suing OCR’s 90.0%-owned subsidiary OCR Properties (Kuantan) Sdn Bhd relating to a residential project involving 979 terrace houses and 130 units of semi-detached houses in Kuantan. Kencana was appointed as contractor in January 2018 for this project via a letter of award, which was terminated in April 2021. Kencana’s claims include RM16.4m of outstanding debt and general damages arising from breach of contract. (The Edge)

Mudajaya Group Bhd has partnered with Hong Kong-based Concord New Energy Group Ltd (CNE) to jointly bid for tenders to undertake solar and wind energy power projects. The group’s wholly-owned unit Mudajaya Energy Sdn Bhd which operates power plants in Malaysia and Indonesia is looking at developing such projects in Southeast Asia and China. (The Edge)

Computer Forms (M) Bhd's remaining substantial shareholder, Arena Evolusi Sdn Bhd, has reduced its stake in the group to 4.8% from 5.5%. Arena disposed of the stake comprising 1.8m shares via the open market on 17th March 2023. (The Edge)

The suspension for trading of Jerasia Capital Bhd’s shares in Bursa Malaysia will begin from 25th April 2023 instead of 21st April 2023 as announced earlier, with Bursa Malaysia closed on Friday and Monday for the Hari Raya holidays. Trading of its securities will be suspended until further notice because the High Court ordered the group to be wound up for failing to pay some RM24.0m owed to AmBank (M) Bhd. (The Edge)

KKB Engineering Bhd is poised to recover with its full-fledged integrated capabilities FY23. The engineering sector is expected to turn a new page with the completion of projects secured pre-pandemic and the replenishment of its order book. (The Edge)

Parlo Bhd has obtained the approval from the Companies Commission of Malaysia (CCM) to hold its AGM and circulate its audited financial statements for FY23 on or before 9th June 2024. (The Edge)

Source: Mplus Research - 20 Apr 2023