Unabated volatility

Market Review

Malaysia:. The FBM KLCI (-0.8%) erased all its previous session gains, spooked by the renewed volatility on Wall Street overnight. The lower liners, however, ended mixed, while the telecommunications & media (+2.7%) sector outperformed the mostly negative sectorial peers to close at 2-year high.

Global markets:. Wall Street extended its decline as the Dow (-0.7%) slid after the renewed concerns on banking turmoil negated the better-than-expected corporate earnings from tech-giants such as Alphabet and Microsoft. The European were also downbeat, but Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI surrendered its gains in the previous session amid heavy selldown in selected banking and energy heavyweights; the former was affected by the renewed concerns over the US banking crisis. Similarly, on the global front, fears over the potential recession resurfaced, as investors await the US Fed interest rate decision next week. Hence, the cautious sentiment on the local front may persist at least for the near term. Commodities wise, the Brent crude oil price extended its downtrend move towards USD77, CPO price hovered above RM3,550, while the gold price stayed below USD2,000.

Sector focus:. Investors may see further selldown in energy counters along with declining crude oil prices amid worries over a potential contraction in the economic activities. We believe the traders may position themselves within the defensive sectors such as telecommunications and utilities amid the uncertain environment.

FBMKLCI Technical Outlook

The FBM KLCI reversed its gains to close below the 1,420 level. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI hovered below 50. Investors may monitor its support at 1,410, followed by 1,400, while the resistance is pegged along 1,440-1,450.

Company Brief

Pekat Group Bhd has secured a solar photovoltaic (PV) project for the contract sum of RM29.1m in Kulai, Johor from D&Y Textile (M) Sdn Bhd. Pekat Solar Sdn Bhd had accepted a letter of Award to design, supply, install, test and commission grid connected solar PV systems under self-consumption (SELCO) scheme at three of its facilities in Sedenak Industrial Park, Kulai. The entire project is scheduled to be completed within an 8-month period by December 2023. (The Star)

Aneka Jaringan Holdings Bhd has secured a RM30.3m contract to undertake the bored piling works for a proposed development in Melaka. The commencement date of the contract is 2nd May 2023 and shall be completed on 1st January 2024. (The Star)

Asia Digital Engineering (ADE), the engineering and maintenance subsidiary of Capital A Bhd, has secured an investment of USD100.0m (RM446.0m) from investment firm OCP Asia Ltd to expand its maintenance, repair and overhaul (MRO) business. The investment will be used for the construction and operationalisation of a new 14-line aircraft maintenance hangar facility in Sepang as well as ADE's further business expansion. (The Edge)

Datin Koh Ah Nee, the wife of TCS Group Holdings Bhd’s group managing director Datuk Tee Chai Seng, has resigned from her post as executive director to pursue other personal interests. Koh, 61, controls a 9.3% stake in TCS Group. Meanwhile, the company has appointed Sharon Chew Mun Hoong, 51, as the group's independent and non-executive director. She has over 20 years of experience in the financial services and capital market industry. (The Edge)

Nestle Malaysia Bhd has announced the retirement of Datin Seri Azlin Arshad from the group's board. She retired as an independent non-executive director with effect from 26th April 2023. Azlin, 49, had previously served as deputy chairman at Syarikat Takaful Keluarga Malaysia Bhd, senior vice president of Astro Malaysia Holdings Bhd and deputy chief executive officer of ECM Libra Financial Group Bhd. (The Edge)

Menang Corp (M) Bhd, which has been issued an unusual market activity query, has reported that ongoing talks to build a digital hub in Negeri Sembilan, as well as potential land acquisitions in the state and Klang, Selangor, could be the reasons behind the surge in its share price and volume. (The Edge)

Teladan Setia Group Bhd has inked a Memorandum of Understanding with Micro Energy Holdings (M) Sdn Bhd (MEH) to install solar photovoltaic systems in its Taman Bertam Heights Phase 2A Gated and Guarded housing development project in Melaka. The project is expected to be launched in 3Q23 and to be completed by 2026. (The Edge)

Bahvest Resources Bhd has received an extraordinary general meeting (EGM) requisition from its shareholders to remove 3 directors — non-executive chairman Datuk Seri Dr Md Kamal Bilal, managing director and chief executive officer Datuk Lo Fui Ming and executive director Lo Teck Yong from its board and replace them with 3 other individuals. The shareholders also request for the record of depositors to facilitate the circulation of notices of EGM to shareholders. As no notice of EGM has been circulated to shareholders, Bahvest reported that no proper EGM will be convened on 25th May 2023. (The Edge)

Careplus Group Bhd is teaming up with an individual Woon Howl Chuen to venture into the renewable energy and energy efficiency management business, in a bid to provide an alternative source of income that will enhance the group's profitability in the future. No information was given on Woon. Under the deal, Woon will subscribe for new Masterclean Technologies shares for RM1.00 apiece, which will result in Careplus' equity interest in Masterclean Technologies reducing by 7.7% to 92.3%. (The Edge)

Sabah-based Victoria Capital Sdn Bhd, has resurfaced as a substantial shareholder of Borneo Oil Bhd after exiting the company in 2019. Victoria Capital bought 488.1m shares or a 5.0% stake in the company on 26th April 2023. Following the stake acquisition, Victoria Capital is now the company’s third largest shareholder after Lee Shing Hong Securities Ltd with a 13.0% stake and MT 23 Resources Ltd (5.3%). (The Edge)

Quah Seik Lee has ceased to be a substantial shareholder of NWP Holdings Bhd after divesting a 4.0% stake to the group’s executive director Tan Wye Chuan, who is also the son of chairman Datuk Tan Lik Houe. Quah sold the stake comprising 23.4m shares to Wye Chuan in a direct business transaction on 20th April 2023. Quah, who surfaced as a substantial shareholder in June 2023 with an 8.7% stake, is the wife of businessman Bryan Loo, who is the founder and chief executive officer of Loob Holding Sdn Bhd, which owns the bubble tea chain brand Tealive. After the latest transaction, Quah's stake in NWP has come down to about 3.5% or 20.3m shares. Wye Chuan’s shareholding, meanwhile, rose to 6.5% or 37.8m shares. (The Edge)

Japan's Mitsui & Co Ltd has surfaced as a substantial shareholder of LGMS Bhd, with a 25.0% stake or 114.0m shares in the ACE Market-listed cybersecurity specialist. Mitsui emerged as a substantial shareholder after it acquired 104.9m shares on 26th April 2023. (The Edge)

Source: Mplus Research - 27 Apr 2023