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Mplus Market Pulse - 11 Aug 2023

Publish date: Fri, 11 Aug 2023, 09:05 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Focus shifting on Malaysia state elections

Market Review

Malaysia:. The FBM KLCI (-0.2%) pared some of its gains from previous session, dragged down by pullback in selected banking and plantation heavyweights yesterday. The lower liners also edged lower, while the plantation sector (-1.0%) underperformed the mostly negative sectorial peers.

Global markets:. Wall Street rebounded as the Dow (-0.2%) rose after the July’s inflation rate came in softer-than-consensus expectations (+3.3% YoY) at +3.2% YoY. The European stockmarkets extended their lead, but Asia stockmarkets ended mixed.

The Day Ahead

With China slipping into the deflationary mode last month, the FBM KLCI was pressured lower before quick bargain hunting activities, which cushioned the downside move yesterday. As we approach the Malaysia state elections over the weekend, we expect trading activities to remain cautious. The lower liners may also set for a rangebound trading with the on-going corporate reporting season. Given that the US inflation has moderated, we reckon that Wall Street may head higher over the near term. Going forward, investors will be monitoring the outcome of Malaysia state elections as well as the US producer price index data to be released tonight. Commodities wise, the Brent crude oil staged a pullback below USD87/bbl, while the CPO prices hovered above RM3,700/MT.

Sector focus:. Reopening of the Green Energy Tariff (GET) programme by the Energy Commission (EC) is expected to benefit players involves in the renewable energy sector. On the flipside, the plantation sector may continue to struggle after palm oil inventories rose to a 5-month in July 2023.

FBMKLCI Technical Outlook

The FBM KLCI managed to recover from its intraday low to close slightly lower as the key index and formed a hammer candle yesterday. Technical indicators remained mixed as the MACD Histogram extended another negative bar, while the RSI came off from the overbought territory. The immediate resistances are located along 1,480-1,500, while the support is pegged around 1,420-1,440.

Company Brief

IHH Healthcare Bhd is acquiring the entire equity interest in Bedrock Healthcare Sdn Bhd (BHSB) for RM245.0m. IHH wholly-owned subsidiary, Pantai Holdings Sdn Bhd, had entered into a share purchase agreement with Saravita Holdings Sdn Bhd and nine individual founders to acquire BHSB. The acquisition is expected to be completed by 1H24. (The Star)

Berjaya Corp Bhd (BCorp) founder and adviser Tan Sri Vincent Tan and BCorp's unit Berjaya Land Bhd (BLand) are suing caretaker Kedah Menteri Besar Datuk Seri Muhammad Sanusi Md Nor over alleged defamatory remarks relating to the Selangor Maritime Gateway (SMG) project. Tan and BLand are seeking general damages, compensatory damages, aggravated damages and exemplary damages. Apart from that, the lawyers have also filed an application for the High Court to issue an injunction to stop Sanusi from making similar remarks in the future. (The Edge)

Advancecon Holdings Bhd’s associate has bagged a RM45.5m award as the contractor for the proposed construction and completion of earthworks and other related works, in relation to the Miri combined cycle gas turbine power plant project. Advancecon’s 30.0%-owned associate company Advancecon (Sarawak) Sdn Bhd (ASSB) had accepted the letter of award (LOA) from Petros Power Sendirian Bhd for the project. The contract period is 12 months from the date of the LOA. (The Edge)

Prolexus Bhd intends to raise up to RM102.6m which represents about 92.4% of its market capitalisation of RM111.0m through a renounceable rights issue of irredeemable convertible unsecured loan stocks (ICULS) to trim its bank borrowings and to fund its working capital. The renounceable rights issue entails the issuance of up to RM102.6m nominal value of 2.05bn ICULS at its full nominal value of 5 sen each, on the basis of 5 ICULS for 1 existing Prolexus share, on an entitlement date to be determined. (The Edge)

NCT Alliance Bhd is undertaking another private placement exercise of about 10.0% of its share base to raise some RM54.4m, based on an illustrative price of 37 sen, mainly to fund its property development of the Grand Ion Majestic and Ion Vivace projects. Based on the illustrative gross proceeds, almost all of it or RM53.9m, will be allocated for investment opportunities to expand the group’s property development activities. (The Edge)

Pentamaster Corporation Bhd’s 2QFY23 net profit rose 23.2% YoY to RM23.7m ago, on the back of higher revenue and better product mix. Revenue for the quarter improved 16.9% YoY to RM176.9m. (The Edge)

Sentral REIT's 2QFY23 net property income grew 4.6% YoY to RM29.2m, driven by higher revenue generated from Menara Shell and Platinum Sentral, partially offset by the decrease in revenue from Wisma Technip and QB2. Revenue for the quarter gained 4.6% YoY to RM38.2m. An interim income distribution of 3.19 sen per unit, payable on 18th September 2023 was declared. (The Edge)

EA Holdings Bhd has urged its shareholders not to attend and vote at an extraordinary general meeting (EGM) on 22nd August 2023 called by substantial shareholder Ng Cheng Shin. The notice of EGM issued by Ng on 7th August 2023 is independent of the company and against the terms of two interim injunction orders dated 1st August 2023 and 2nd August 2023 obtained by Vinvest Capital Holdings Bhd in the High Court. The notice is treated by the company as defective and void. (The Edge)

Practice Note 17 (PN17) company Top Builders Capital Bhd has announced that its external auditor, Kreston John & Gan, has resigned on a voluntary basis. The auditor's term of office will end 21 days after the resignation notice date of 9th August 2023 in line with the Companies Act 2016. (The Edge)

Southern Cable Group Bhd has received an extension of contract from Tenaga Nasional Bhd (TNB) worth RM332.1m to supply underground power cables to the utility giant. The group secured the 1-year extension until July 2024 through its wholly-owned subsidiary Southern Cable Sdn Bhd. (The Edge)

Source: Mplus Research - 11 Aug 2023

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