Extended pullback ahead of festive break

Market Review

Malaysia:. The FBM KLCI (-0.2%) recorded its fourth day losing streak as investors stayed muted prior to the extended weekend festive break. The lower liners also ended negatively, while the technology sector (-0.9%) underperformed to register its fourth consecutive session of decline.

Global markets:. Wall Street edged mildly higher as the Dow (+0.2%) rose with investors breeze through the recent batch of corporate earnings and anticipate new economic data to provide insights on the Federal Reserve move next month. The European stockmarkets ended in red, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI marked the fourth session of losing streak as cautious sentiment continued to trigger profit taking activities prior to the Hari Raya break. Meanwhile, Wall Street ended mixed to kick off the new week as investors await more earnings reports this week, especially from several giant technology companies. Besides, key focus this week will include the US GDP and PCE data. Commodities wise, the Brent crude oil traded above USD82, while the CPO price hovered above RM3,700; Gold price saw a slight rebound but remained below USD2,000.

Sector focus:. The energy sector may still be favoured by traders as crude oil prices remained resilient above psychological USD80. Besides, investors may turn away from technology stocks ahead of the technology earnings week in the US. We expect the traders to shift their trading tone towards stocks with defensive characteristics such as utilities and telecommunications.

FBMKLCI Technical Outlook

The FBM KLCI extended its decline for the fourth consecutive session after hovering mostly in the negative territory. Technical indicators turned negative as the MACD Histogram turned negative, while the RSI hovered below 50. Investors may watch for the support 1,440-1,450, and the resistance pegged along 1,400- 1,410.

Company Brief

Advancecon Holdings Bhd has won a contract worth RM86.0m from Perbadanan Kemajuan Negeri Selangor (PKNS) to undertake infrastructure works for Sierra Alam (Phase 1) in Shah Alam, Selangor. The overall contract period would be 24 months from the date of site possession, or a date to be informed by PKNS. (The Star)

MISC Bhd has entered into a USD527.0m (RM2.30bn) syndicated loan facility to finance 6 very large ethane carriers. The 11-year sustainable-linked non-recourse term loan is the group’s debut sustainability-linked loan and is structured to align with its long-term business strategy and sustainability aspirations. (The Edge)

Cypark Resources Bhd has accepted a letter of award dated 13th April 2023 from Selgate Corp Sdn Bhd for the execution and completion of the remaining works for the proposed construction of a 10-storey private hospital, together with a 6-storey parking lot in Rawang, Selangor. The contract sum for the job is RM108.8m, and it is targeted to be completed by 29th January 2024, with a construction period of 9 months from the date of site possession or commencement. (The Edge)

Aeon Co (M) Bhd is acquiring a piece of land measuring 8.7-ha in Kota Bharu, Kelantan for RM165.0m. Aeon is buying the land from Liziz Standaco Sdn Bhd using internally-generated funds. The purchase is in line with the group’s corporate strategy of developing its future retail business, and is expected to be completed within 5 months. (The Edge)

KSK Land Sdn Bhd has terminated its contract with Grand Dynamic Builders Sdn Bhd, a wholly-owned subsidiary of GDB Holdings Bhd, as the main contractor of mixed development 8 Conlay at Jalan Conlay, Kuala Lumpur. Following the termination, KSK Land has been in discussion with a new potential main contractor. (The Edge)

Pestech International Bhd’s unit has won an asset replacement and rehabilitation contract worth RM34.9m from Tenaga Nasional Bhd in Cahaya Baru, Pasir Gudang, Johor. The group will focus primarily on the replacement of equipment such as busbar disconnectors, feeder disconnectors with earth switches, circuit breakers, current transformers, capacitor voltage transformers, surge arresters and marshalling kiosks, and digital relay panels. The contract was awarded to a joint venture between its wholly-owned subsidiary Pestech Sdn Bhd and Mega Linear Sdn Bhd. (The Edge)

Pavilion Real Estate Investment Trust (Pavilion REIT)’s 1QFY23 net property income rose 11.5% YoY to RM104.8m, thanks to higher rental income due to increased occupancy, rent revenue, and advertising and marketing income at its retail malls. Revenue for the quarter grew 16.2% YoY to RM156.4m. (The Edge)

LPI Capital Bhd's 1QFY23 net profit grew 13.8% YoY to RM73.8m, thanks to higher investment return that was mainly contributed by fair value gains amid recovery in the bond market. Revenue for the quarter grew 11.3% YoY to RM463.3m. (The Edge)

Tower Real Estate Investment Trust’s (Tower REIT) 3QFY23 net property income dipped 4.6% YoY to RM4.0m, weighed down further by higher electricity tariff, minimum wage hike, as well as interest, housekeeping and security expenses. Revenue for the quarter, however, expanded 7.7% YoY to RM8.6m. (The Edge)

MKH Oil Palm (East Kalimantan) Bhd is offering up to 250.7m shares in an initial public offering as it seeks to list on Bursa Malaysia’s Main Market. The 250.7m shares representing 24.5% of its enlarged issued share capital of 1.02bn comprise 220.0m new shares and an offer for sale of 30.7m existing shares. The issue price as well as the opening and closing dates of the IPO have yet to be fixed. (The Edge)

Westports Holdings Bhd has reported that additional taxes totalling RM143.2m imposed on its wholly-owned subsidiary Westports Malaysia Sdn Bhd (WMSB) has been set aside. This came after the Ministry of Finance reviewed Westports' appeal letter dated 24th December 2021 relating to tax imposed on lease payments made by the subsidiary. (The Edge)

RAM Ratings has revised Cahya Mata Sarawak Bhd’s (CMSB) outlook from ‘stable’ to ‘positive’ due to the group’s improved business and financial profiles, driven by its new phosphate production business and solid position in Sarawak's cement industry. The rating agency also reaffirmed the Sarawak-based cement manufacturer’s AA3/P1 corporate credit ratings and the AA3 ratings of its RM2.00bn Islamic MTN Programme (2017/2037). (The Edge)

OCR Group Bhd has maintained that there is no operational impact on the group arising from the lawsuit filed by a former contractor over alleged payment default of RM30.9m in relation to projects in Kuantan and Petaling Jaya. The claims by the ex-contractor, Kencana Amanjaya Sdn Bhd, are baseless and frivolous, and that it has instructed its solicitors to contest the matter to fully defend its interest. (The Edge)

Boustead Plantations Bhd has appointed Lt Gen (R) Datuk Azizan Md Delin as a new non-independent non-executive director. The appointment took effect on 20th April 2023. Azizan, 63, had served more than 41 years in the Malaysian Armed Forces. The pinnacle of his military career was as the Army Western Field Commander. (The Edge)

Creador has moved the ownership of a 14.7% stake in CTOS Digital Bhd to the private equity firm’s fifth fund; Creador V LP, from Creador II LLC previously. The roll-over of this investment was because Creador II, which was launched in August 2013, is approaching the end of its 10-year fund life by August 2023. Creador V, meanwhile, was launched in July 2021, and the purchase price for the 14.7% block was set at RM1.35 per share. (The Edge)

SHH Resources Holdings Bhd has appointed Yee Swee Meng as its new chief executive officer (CEO) with effect from 20th April 2023 after its former CEO James Teo Bok Yu resigned on 17th April 2023 to pursue other interests. Bok Yu is the son of SHH Resources founder and managing director Datuk Teo Wee Cheng, who along with his wife Datin Teo Chan Huat, are major shareholders in the group with a combined stake of 17.3%. (The Edge)

Citaglobal Bhd and Reneuco Bhd, which have won a tender to develop an independent power producer (IPP) project for the East Coast Rail Link (ECRL) network. Both parties signed an agreement to formalise their collaboration via a new special purpose vehicle (SPV) on 20th April 2023. Citaglobal will contribute 60.0% and Reneuco 40.0% of the RM500,000 initial share capital of the SPV. Citaglobal will lead the negotiations with Malaysia Rail Link Sdn Bhd (MRL) to finalise the terms and conditions for the IPP project. (The Edge)

TIME dotCom Bhd (TDC) believes it is well positioned for a rapid and tactical expansion of data centre facilities across primary and secondary cities in Asia after concluding the sale of stakes in its data centre companies to US digital infrastructure assets firm DigitalBridge Group, Inc. The partnership with DigitalBridge Group will focus on providing best-in-class services to multinationals, large enterprises, content providers, internet infrastructure providers and financial institutions. (The Edge)

Jerasia Capital Bhd's wholly-owned subsidiary Canteran Apparel Sdn Bhd (CASB) has received a winding-up petition from RHB Bank Bhd over unpaid debts amounting to RM28.8m. Case management via e-review and hearing for the winding-up petition have been fixed for 15th June 2023 and 21st November 2023 respectively by the Kuala Lumpur High Court. (The Edge)

Source: Mplus Research - 25 Apr 2023