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Mplus Market Pulse - 26 Jan 2024

Publish date: Fri, 26 Jan 2024, 10:40 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Market Review

Malaysia: The FBM KLCI (+0.53%) Closed Higher, Despite the Mixed Regional Markets, Due to Buying Pressure in Selected Banking, Utilities and Industrial Products Heavyweights. On the Broader Market, the Property Sector (+1.85%) Was the Leading Sector, While the Technology Sector (-0.24%) Declined.

Global markets: Wall Street closed higher as 4Q23 GDP came in at 3.3% QoQ as compared to 2% consensus. This has offset the drop in Tesla following a weak set of results and warned a softer growth in 2024. Meanwhile, the European and Asia stock markets ended mostly higher; the latter was bullish after PBOC’s moves.

The Day Ahead

The FBM KLCI surged for the fourth session and once again crossed and closed above the 1,500 psychological level. We believe the overall sentiment on the local front may stay bullish in tandem with the Hang Seng Index spiking above the 16,000 level following the news where China ramps up stimulus and PBOC announces policy easing measures. Also, the US stock markets continued its bullish tone following the release of better-than-expected GDP data. We believe the market will be focusing on corporate earnings and next week’s FOMC meeting. On the commodity markets, Brent oil headed above USD80/bbl mark as EIA indicated that the US inventories were declining.

Sectors focus: Given the solid close on Hong Kong and the US markets, we believe buying support may persist on the local front, especially within the Technology sector. Meanwhile, the news on BLAND, IJM, MRCB and KTMB to join forces to bid for the KL-SG HSR job may provide support towards the Construction, Building Material and Property sectors. Besides, we believe the Transportation & Logistics sector may see trading opportunities with the ongoing tension in the Red Sea.

The FBM KLCI ended higher for the 4th consecutive session. The technical readings on the key index were positive, with the MACD Histogram forming a rounding bottom formation, while the RSI maintains above the 50 level. The resistance is envisaged around 1,510-1,520 and the support is set at 1,4-1,470.

Company Brief

Berjaya Land Bhd’s (BLand) 70%-owned subsidiary Berjaya Rail Sdn Bhd (BRail) has teamed up with IJM Corp Bhd's unit IJM Construction Sdn Bhd, Malaysian Resources Corp Bhd (MRCB) and national railway company Keretapi Tanah Melayu Bhd (KTMB) to bid for the Kuala Lumpur-Singapore high-speed rail (HSR) project. Other technical members of the consortium include Japan’s Hitachi Rail STS, which specialises in providing signalling systems, Hyundai Rotem Co, a South Korean company that manufactures rolling stock, and German rail operator Deutsche Bahn AG’s unit DB Engineering & Consulting GmbH. (The Edge)

Green Packet Bhd said it is disposing of its 15% stake in CSH Solutions Sdn Bhd for RM3.5m to Lai Kwok Ching, as part of its portfolio consolidation exercise. Green Packet bought the stake in October 2022 for RM8m. The audited net assets of CSH Solutions stood at RM2.56m at end-June 2023, which will result in a gain of RM944,900 following the disposal announced on Wednesday. (The Edge)

Jade Marvel Group Bhd has withdrawn its plans to raise up to RM80m through the issuance of redeemable convertible preference shares (RCPS) to fund its moneylending business and working capital. Jade Marvel said its board of directors and Sycamore Capital SPC, the subscriber for the proposed RCPS issuance, have mutually agreed to terminate the subscription agreement and supplemental subscription agreement. It did not, however, disclose the reason for the termination. (The Edge)

DXN Holdings Bhd posted a 16.47% rise in net profit to RM78.36m in the third quarter ended Nov 30, 2024 (3QFY2024) from RM67.28m a year ago, underpinned by higher revenue on the back of continuous sales growth in the Latin American and Indian region. The global health and wellness direct selling group company declared a third interim dividend of 0.9 sen per share, to be paid on March 8. (The Edge)

Pavilion Real Estate Investment Trust (Pavilion REIT) said its net property income (NPI) rose 38.97% to RM134.64m for the fourth quarter ended Dec 31, 2023 (4QFY2023), from RM96.89m a year earlier, due to increased revenue from its malls, including newly acquired Pavilion Bukit Jalil. Quarterly revenue increased 47.54% to RM208.22m from RM141.13m in 4QFY2022, on the back of the revenue contribution by Pavilion Bukit Jalil that was acquired in June 2023, higher property occupancies that led to increase in rental income, as well as higher revenue rent from existing retail malls and advertising income. The REIT declared a final income distribution per unit (DPU) of 4.6 sen, payable on Feb 29. (The Edge)

Energy infrastructure group Wasco Bhd is disposing of a parcel of land together with storage buildings erected on site in Shah Alam for RM40m to Array Metal (M) Sdn Bhd. The freehold land, measuring 18,363 sq m, is located along Jalan Bukit Kemuning in Section 34. Wasco had spent RM10.19m for the acquisition and related costs, and it has a carrying value of RM7. (The Edge)

Maju Offshore Capital Sdn Bhd has ceased to be loss-making Bina Puri Holdings Bhd’s substantial shareholder after it sold a 2.96% stake in the company for RM4m. Maju Offshore Capital offloaded the stake comprising 100m shares via a direct business transaction on Monday. A check with Bloomberg showed that a block of 100m Bina Puri shares was traded at 4 sen apiece or a cumulative RM4m on Monday — a 50% discount to that day’s closing price of 8 sen. (The Edge)

Malaysia Building Society Bhd (MBSB) has appointed former Kumpulan Wang Persaraan (Diperbadankan) (KWAP) CEO Datuk Wan Kamaruzzaman Wan Ahmad as its chairman with immediate effect.His appointment confirms an earlier report by The Edge Weekly. MBSB's previous chairman Tan Sri Azlan Zainol passed away in January last year. (The Edge)

Alam Maritim Resources Bhd said the High Court has granted it a nine-month extension, starting from Jan 25, to hold meetings with creditors in relation to its scheme of arrangement. Concurrently, the restraining order against Alam Maritim’s creditors was also extended for nine months, also starting from Jan 25. “The orders granted by the High Court were obtained as part of Alam Maritim’s overall restructuring and rehabilitation plan by way of a proposed scheme of arrangement with its creditors,” it said. (The Edge)

Fajarbaru Builder Group Bhd has been appointed as the developer of a RM192m affordable housing project in Putrajaya by the federal territory’s local authority. Fajarbaru said it accepted a letter of offer from Perbandanan Putrajaya to be appointed as developer for the integrated development of Residensi Cemara — a township comprising 480 units of Residensi Madani and 320 units of Residensi Wilayah — in Precinct 11, Putrajaya. The construction and property development outfit added that the project has a gross development value of RM192m with a development period of three years. (The Edge)

MISC Bhd has added two vessels to its current fleet, namely the floating production storage offloading vessel (FPSO) Marechal Duque de Caxias; and Eagle Veracruz, the group’s latest liquefied natural gas (LNG) dual-fuel very large crude carrier (VLCC) under wholly-owned petroleum tanker arm AET. Eagle Veracruz, named on Tuesday, will be the third vessel delivered to Shell Tankers (Singapore) on long-term charter. FPSO Marechal Duque de Caxias, MISC’s first ultra-deepwater asset, was named in Yantai, China on Jan 17 this year, and will sail in mid-February to its production location in the Mero Field offshore Brazil. (The Edge)

IHH Healthcare Bhd’s unit Pantai Medical Centre Sdn Bhd has inked an agreement with Pelaburan Hartanah Bhd (PHB) for the development of a new medical block adjacent to the current Gleneagles Hospital Kuala Lumpur complex. The healthcare group said the new medical block will be leased from PHB for two decades and that the new expansion would herald a new growth phase for Gleneagles Hospital Kuala Lumpur, as one of the largest private hospitals in Malaysia by 2027, with over 700 beds. (The Edge)

Barakah Offshore Petroleum Bhd will explore other options in disposing of its Kota Laksamana 101 pipelay and accommodation barge, as its agreement to auction the vessel has lapsed. Barakah Offshore had targeted a minimum going price of US$11.4m (RM53.9m) for the 12-year-old vessel under the auction process. The group said it will decide on the final mode of the disposal — either via direct disposal or auction — after obtaining shareholders’ approval on the matter. (The Edge)

The public portion of metal fabricator Wentel Engineering Holdings Bhd’s initial public offering (IPO) was oversubscribed by 17.72 times against the proposed 57,500,000 issue shares. A statement by the placement agent, Tricor Investor & Issuing House Services Sdn Bhd on Wednesday stated that a total of 10,430 applications for 1,076,196,900 issue shares with a value of RM279,811,194.00 were received. (The Edge)

Betamek Bhd's net profit for the third quarter ended Dec 31, 2023 rose more than twofold to RM5.05m from RM1.66m a year earlier, on the back of higher revenue of RM59.22m versus RM54.73m, which was mainly from its vehicle audio and visual products segments, adding that revenue was entirely derived from customers in Malaysia. (The Edge)

Source: Mplus Research - 26 Jan 2024

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