Market Review

Malaysia:. The FBM KLCI (+0.4%) advanced to snap a 5-day losing streak on the  back of bargain hunting activities in two-thirds of the key index components. The  lower liners also advanced, while the healthcare sector (+1.3%) outperformed  amongst the mostly positive sectorial peers.

Global markets:. Wall Street turned volatile as the Dow (-1.0%) sank on concern that  policymakers were unable to strike a deal to raise the debt ceiling offset the strong  economic data in retail sales, manufacturing production and industrial production.

The Day Ahead

The FBM KLCI rebounded to end the session higher, snapping the 5-day losing  streak as bargain hunting activities emerged. Overall, the US stock markets were  weaker, awaiting news on the debt ceiling negotiations between congressional  leaders and President Joe Biden. Meanwhile, Janet Yellen reiterated her concerns  if the debt ceiling is not raised and the country may face defaulting as early as 1st June. Given the uncertainties in the US, we believe the selling pressure may  spillover to the local front, capping the upside potential on the FBM KLCI.  Commodities wise, the Brent crude oil price is hovering along USD 74-75, while the  CPO fell below RM3,500. Gold price fell below USD2,000.

Sector focus:. With the negative performance from Wall Street, we opine that  traders may focus on defensive stocks within the telco, utilities and consumer  sectors. Meanwhile, we like the tourism and healthcare related stocks after the  reopening of China borders since January. 

FBMKLCI Technical Outlook

The FBM KLCI rebounded after a 5-day losing streak. Technical indicators are  suggesting that the momentum is relatively weak at this juncture, with the negative  MACD Histogram and the RSI is below 50. We believe the upside could be capped  around 1,435-1,450. Support is located around 1,400-1,410.

Company Brief

Gamuda Bhd clarified that the Penang South Islands (PSI) land reclamation project  had undergone a comprehensive and transparent due process that led to the  approval of the PSI project. Gamuda, which is the majority shareholder of the  project's developer SRS Consortium Sdn Bhd, reported that approval of the PSI  project covers not only the concerns of the environmentalists and the antidevelopment lobby, but also balances that with the well-being of the communities  in the vicinity of the project. (The Star)

Cahya Mata Sarawak Bhd (CMSB)’s unit has obtained an interim injunction to  restrain Syarikat SESCO Bhd from terminating electricity supply to its phosphate  complex, pending a hearing on the application between both parties. The Kuching  High Court had on yesterday granted Cahya Mata Phosphates Industries Sdn Bhd  (CMPI) the ex parte ad interim injunction till 25th May 2023, when the inter parte  hearing is scheduled. This development follows the Emergency Arbitrator's refusal  to grant interim measures to CMPI concerning a power purchase agreement (PPA)  dispute with SESCO. (The Edge)

Malaysian Bulk Carriers Bhd (Maybulk) has proposed to undertake a RM275.0m capital reduction to eliminate its accumulated losses. As at 3rd May 2023 (the  latest practicable date prior to this capital reduction announcement), the issued  share capital of Maybulk was RM338.8m, comprising 1.0bn shares. The proposed  capital reduction will result in its share capital being reduced to RM63.8m, resulting  in a capital reduction of RM275.0m, which will be utilised to set off its accumulated  losses of RM259.1m at the company level. The corporate exercise requires  approvals including from shareholders via an extraordinary general meeting, as  well as its creditors. (The Edge)

Bintai Kinden Corp Bhd made further announcements on its boardroom changes  yesterday including the return of its former CEO Datuk Tay Chor Han as its new  group managing director effective 15th May 2023. Tay replaces Ku Chong Hong,  who was redesignated to executive director cum chief financial officer. (The Edge)

Kejuruteraan Asastera Bhd (KAB) wholly owned subsidiary KAB Energy Holdings  Sdn Bhd (Kabeh) is partnering with PT CNEC Engineering Indonesia, a subsidiary of  China National Nuclear Corp, and Transcend Global Ltd (TGL) to develop potential sustainable energy solutions (SES) projects regionally. Through the partnership,  Kabeh and PT CNEC will collaborate to identify and develop various proposed  projects, while TGL will assist in conducting financial feasibility studies for  shortlisted projects and facilitate the merger and acquisition (M&A) of projects by  the special purpose vehicle (SPV). (The Edge)

Country Heights Holdings Bhd's chief financial officer (CFO) Yong Sie Hoong has  resigned to pursue other personal goals, effective 16th May 2023. Yong, 48, was  appointed to the role on 22nd August 2022, replacing Choh Kim Chiew and is a  member of the Malaysian Institute of Accountants (MIA) and CPA Australia. (The  Edge)

YNH Property Bhd is disposing of a piece of freehold land measuring  approximately 5.1-ac in Desa Seri Hartamas to the Sunway group for RM170.0m cash. YNH will receive an additional RM50.0m cash from the Sunway group, should  it manage to obtain a new development order (DO) from the authorities for a  project, with a minimum plot ratio of 7 in the net land area, within 1 year from the  date of the signing of the sales and purchase agreement (SPA). (The Edge)

MSM Malaysia Holdings Bhd has requested that Putrajaya intervenes to adjust the  retail price of sugar to safeguard the profitability and sustainability of the local  sugar industry. The industry has not received any government subsidy for a  decade. (The Edge)

Hume Cement Industries Bhd’s 3QFY23 net profit soared 14.1x YoY to RM27.0m,  driven by a revision of the retail selling price of cement and higher cement sales  volume. Revenue for the quarter rose 50.7% YoY to RM288.1m. (The Edge)

Foundpac Group Bhd’s 3QFY23 net profit slipped 25.0% YoY to RM2.0m, attributed  to the reduction in revenue from both its precision engineering and the accessory  cables and connectors segments. An interim dividend of 1.0 sen per share, payable  on 26th June 2023 was declared. Revenue for the quarter dropped 9.6% YoY to  RM15.8m. (The Edge)

YAM Tunku Kamariah Aminah Maimunah Iskandariah Sultan Iskandar, a member  of the Johor royal family, has been appointed as a non-executive chairman of AHB  Holdings Bhd. Tunku Kamariah is the eldest sister of the Sultan of Johor, Sultan  Ibrahim Almarhum Sultan Iskandar. (The Edge)

Vinvest Capital Holdings Bhd was issued an unusual market activity (UMA) query  by Bursa Malaysia Securities Bhd, following a sharp fall in its share price and  trading volume yesterday. The counter plummeted 52.8% or 9.5 sen to 8.5 sen a  share, and became Bursa’s top sixth daily loser. (The Edge)

NTPM Holdings Bhd saw its major shareholder Teoh Teik Lin dispose of 5.7%  stake in the paper products manufacturer and ceasing to be a substantial  shareholder. Teik Lin offloaded 64.5m shares held through Kota Beras Sdn Bhd  and Teoh Peng Heong & Sons Sdn Bhd. Meanwhile, his cousin Dr Teoh Teik Toe  has disposed of 8.7m shares at 53 sen per share on 15th May 2023, at a premium  of 8.16% to the closing price of 49 sen. He then resigned from the post of nonindependent non-executive on Tuesday, due to personal commitment. (The Edge)

IJM Land Bhd has announced that its 51.0%-owned UK subsidiary RMS (England) 2  Ltd (RMS 2) has partnered with UK-based railway company Network Rail to explore  development opportunities through Network Rail’s portfolio. Under the partnership,  both parties will explore opportunities to develop mixed-use schemes, residential,  commercial or logistic properties in Central London and South East London. (The  Edge)

Source: Mplus Research - 17 May 2023