Muted recovery

Market Review

Malaysia:. The FBM KLCI (-0.2%) retreated ahead of the extended weekend break as profit taking activities emerged on selected banking and plantation heavyweights. The lower liners ended mixed, while the technology sector (+0.9%) outperformed the mostly negative the sectorial peers.

Global markets:. Wall Street edged lower as the Dow (-0.2%) reversed all its intraday gains after the ISM Manufacturing PMI in April 2023 stood at 47.1; the sixth consecutive month of contraction led to the rising concern over recessionary risk. Both the European and Asia stockmarkets ended mostly upbeat.

The Day Ahead

The FBM KLCI retreated despite the rally on Wall Street as the sentiment was dragged down by selling pressure in the financial and plantation heavyweight. Investors may remain wary following the decline on Wall Street after First Republic was sold to JPMorgan. Meanwhile, the US Federal Reserve and ECB as well as Bank Negara Malaysia will be having their interest rate decisions this week, thus expecting softer trading activities on the overall markets. Commodities wise, the Brent crude oil price hovered below USD80, while the CPO traded above RM3,330. Gold price hovered above USD1,980.

Sector focus:. Given the persisting global uncertainties, we favour the utilities and telecommunication sector amid their defensive characteristics. Meanwhile, investors may look out for stocks in the travelling sector on the back of improving travelling activities. The commodities linked sectors may not be attractive amid a pullback in commodities prices.

FBMKLCI Technical Outlook

The FBM KLCI retreated as the key index remained in a rangebound move below its daily EMA9. Technical indicators as the MACD Histogram extended a negative bar, while the RSI hovered below 50. Resistance is pegged along 1,430-1,440, while the support is located around 1,400-1,410.

Company Brief

Eco World International Bhd is undertaking a corporate exercise to reduce RM1.50bn of its issued share capital pursuant to Section 117 of the Companies Act 2016. The corresponding credit arising from the proposed capital reduction will be used to set off against the company’s accumulated losses while the remaining balance will be credited to the retained earnings of the company. The company intends to distribute its estimated excess cash of up to RM900.0m in 2023, after setting aside funds for the group’s estimated working capital and funding requirements and subject to meeting its sales targets and receiving the relevant approvals. The proposed capital reduction (PCR) is subject to the approval of the shareholders of the company at an extraordinary general meeting (EGM) to be convened and any other relevant authorities and/or parties, if required. The date of the EGM will be announced by the company in due course and the PCR is expected to be completed by 2H23. (The Star)

A few interesting names have just popped up in the latest top 30 largest shareholders’ list of stockbroking firm Apex Equity Holdings Bhd. They are Hextar Group boss Datuk Eddie Ong Choo Meng, KIP Real Estate Investment Trust (KIP REIT) co-founder Datuk Eric Ong Kook Liong, and Sanichi Technology Bhd founder Datuk Seri Dr Jacky Pang Chow Huat, who have surfaced as new shareholders, albeit not substantial ones, of Apex Equity. Choo Meng owned 6.4m shares or a 3.2% stake in the company as at 31st March 2023. (The Edge)

Apex Healthcare Bhd's 40.0%-owned associate Straits Apex Group Sdn Bhd (SAG) has proposed to divest its entire interest in Straits Apex Sdn Bhd (SA) to healthcare-focused private equity firm Quadria Capital for an enterprise value of USD240.0m (RM1.06bn). Upon completion of the transactions, SAG will have a 40.0% effective stake in the SA group of companies, while the remaining 60.0% effective equity interest will be owned by Quadria through its affiliates. (The Edge)

Wah Seong Corp Bhd said its managing director (MD) and group chief executive officer Chan Cheu Leong, 72, is retiring and will be succeeded by deputy MD Gian Carlo Maccagno, 59, effective 1st July 2023. Chan will be redesignated as nonindependent non-executive director following his retirement as MD, nearly 21 years since his appointment on 22nd May 2002. (The Edge)

Bintulu Port Holdings Bhd’s Datuk Abdul Mutalib Alias will be stepping down as the chairman upon the expiry of his 2-year tenure on 1st May 2023. (The Edge)

Samaiden Group Bhd via its indirectly owned Samaiden Energy (Cambodia) Co Ltd has signed a 5-year Memorandum of Understanding with Royal Group Co Ltd, Management Venture Asia (Cambodia) Ltd and Panna Energy Sdn Bhd to develop unutilised plots of land alongside the railway tracks operated by Cambodia's Royal Railway PLC for RE and other sustainable economic projects. (The Edge)

Teladan Setia Group Bhd is eyeing a move to the Main Market of Bursa Malaysia. The group has satisfied the requirements for the transfer, based on the equity guidelines issued by the Securities Commission Malaysia and the Main Market Listing Requirements of Bursa Securities. (The Edge)

Dufu Technology Corp Bhd’s 1QFY23 net profit dropped 40.6% YoY to RM10.9m, mainly due to lower revenue in hard disk drive (HDD) components as well as higher raw material costs incurred. Revenue for the quarter fell 14.1% YoY to RM74.2m. (The Edge)

Source: Mplus Research - 2 May 2023