Positive Tone On Bursa Exchange To Persist

Market Review

Malaysia: The FBM KLCI (+0.14%) closed marginally higher, bucking the mostly weaker performance of the regional markets, due to buying pressure in selected Banking and Utilities heavyweights. On the broader market, the Healthcare sector (+2.17%) was the leading sector, followed by the Construction sector (+1.12%).

Global markets: Wall Street closed mixed, however it logged a winning week overall, as sentiment was boosted by the positive economic data, namely the US GDP and PCE data. Meanwhile, the European stock markets ended higher, while Asia fell as there were selling pressure in EV stocks, tracking Tesla’s price plunge a day prior.

The Day Ahead

The FBM KLCI charged higher for the fifth session, hovering above the 1,500 psychological level; still supported by the Utilities heavyweights. Meanwhile, the US stock markets ended the week on a mixed note as the S&P500 snapped the 5-day winning streak after Intel’s softer revenue forecast. This week, the market should be watching closely on several events such as (i) China manufacturing PMI, (ii) FOMC meeting, (iii) jobs data in the US. Overall, we still expect the buying support to sustain within the Malaysia stock markets. On the commodity markets, Brent oil continues to climb higher, currently hovering above USD83/bbl mark amid potential China stimulus packages, coupled with the ongoing tension in the Middle East region.

Sectors focus: With the jump in the crude oil prices following the rising tension in the Middle East region, we expect the O&G sector to perform well going forward. Also, shipping rates may spike and the Transportation & Logistics sector is likely to see an upside move. Meanwhile, the continuation of buying momentum within the YTLrelated companies last week may continue as it should be supported by the KL-SG HSR and data centre theme for now. Besides, we do expect the Construction, Building Material, Property sectors to gain in tandem from these catalysts.

FBMKLCI Technical Outlook

The FBM KLCI ended higher for the 5th consecutive session. The technical readings on the key index were positive, with the MACD Histogram extending the first positive bar, while the RSI maintains above the 50 level. The resistance is envisaged around 1,510-1,520 and the support is set at 1,480-1,470.

Company Brief

Joe Holding Bhd, formerly GPA Holdings Bhd, is selling its entire 70% stake in its subsidiary GP Products Sdn Bhd (GPP) to long-time shareholder Lim Siew Sooi for RM12.7m. The divestment also involves GPP’s wholly owned GPA Technologies Sdn Bhd and 60%-owned GP Firstpower Technologies Sdn Bhd. Joe Holding said in a stock exchange filing on Friday that the disposal would allow it to reduce dependency on its traditional battery business, which is expected to be challenging in light of the expected greater demand for electric vehicle batteries in the market. (The Edge)

Nylex (Malaysia) Bhd, which was unable to submit a regularisation plan to address its Practice Note 17 (PN17) status by the extended deadline of Friday, said it is submitting an appeal against Bursa Securities' decision to suspend and delist its shares. The company risks suspension over the failure to submit the regularisation plan by the deadline, followed by delisting upon the expiry of two market days from the suspension date. Nylex said it is submitting the appeal on Friday, and subject to the appeal being considered favourably by Bursa Securities, it will seek a further extension of time to submit the regularisation plan. (The Edge)

Proven Venture Capital Ltd has disposed of its entire stake in PUC Bhd and ceased to be a substantial shareholder of the group. Proven Venture has disposed of 185.87m shares or a 7.85% stake in the technology group via an off-market transaction on Friday. The disposal came months after Proven Venture emerged as the substantial shareholder of the integrated media services and payment solutions provider in October last year via private placement subscription. Notably, Proven Venture is jointly owned by more than 100 limited partners consisting of high-networth entities and individuals. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) said it is acquiring leasehold plots in Demak Laut Industrial Park in Kuching from the Land and Survey Department of Sarawak measuring 8.85ha for RM21.62m cash. This follows an earlier filing by SCIB on Jan 17, which clarified it was in talks with the Sarawak state government to acquire the land plots for the purpose of expanding its production capacity. The five plots of land are located some 15km from Kuching City Centre. (The Edge)

Malaysian Resources Corp Bhd (MRCB), Berjaya Land Bhd (BJLand) and IJM Construction Sdn Bhd (IJM) confirmed that they are in a consortium, together with Keretapi Tanah Melayu Bhd (KTMB), to bid for the Kuala Lumpur-Singapore high-speed rail (HSR) project. MRCB said the company has signed a teaming agreement with Berjaya Rail Sdn Bhd, a subsidiary of Berjaya Land Bhd, to be part of the Berjaya HSR Consortium on Dec 15, 2023. It said the purpose of the agreement was to submit a non-binding conceptual proposal to MyHSR Corp Sdn Bhd, pursuant to the request for information (RFI) conceptual proposal for the HSR project. (The Edge)

KLCC Property Holdings Bhd (KLCCP) is buying the remaining 40% equity interest in Suria KLCC Sdn Bhd, which owns and manages Suria KLCC Mall here, for RM1.95bn. KLCCP said it has entered into a share purchase agreement with Ocmador (Malaysia) City Retail Centre Sdn Bhd, Port Moresby Investments Ltd and Bold Peak Sdn Bhd for the proposed acquisition. It added that the proposed acquisition will be funded by external borrowings and is expected to be completed by the second quarter of 2024. Suria KLCC will become a wholly owned subsidiary of KLCCP after the completion of the proposed transaction. KLCCP and KLCC Real Estate Investment Trust (KLCC REIT) are collectively known as KLCCP Stapled Group. Already, the group owns a diverse property portfolio largely located within the Kuala Lumpur City Centre including Petronas Twin Towers, Menara ExxonMobil and Menara 3 PETRONAS under KLCC REIT. (The Edge)

Nova MSC Bhd has secured an automation project from a Singaporean firm which entails the supply, delivery, installation, testing and commissioning of a fully operational automated administration, labelling and sample processing system. The contract is valued at RM20.8m and there is also an option to purchase optional items and services as well as extend the maintenance by another five years amounting to approximately RM14.6m. Nova MSC said its unit novaCITYNETS Pte Ltd (NCN) has received a letter of award from Sys-Mac Automation Engineering Pte Ltd in Singapore to engage the company as a contractor for the project. (The Edge)

Ahmad Zaki Sdn Bhd (AZSB), a wholly-owned subsidiary of engineering and construction group Ahmad Zaki Resources Bhd (AZRB), has been served with a winding-up petition by Sukiada Engineering Sdn Bhd (SESB) for allegedly failing to settle an outstanding amount of RM168,115.25 excluding interest as at June 30, 2023. AZRB said, however, that AZSB is not a major subsidiary of the company and that it does not anticipate any financial and operational impact due to the filing of the petition.AZRB clarified that at the point of the petition being served, ongoing negotiations were taking place between the group and SESB to reach a mutually acceptable resolution. (The Edge)

G Capital Bhd has further downsized the capacity of its 70%-owned unit's solar photovoltaic (PV) system on the premises of a wholly-owned unit of Chin Well Holdings Bhd to 2MW. This came after design revisions following a supplemental power purchase agreement (SPPA) that was inked between its 70%-owned subsidiary Solarcity Malaysia Sdn Bhd and Chin Well’s Chin Herr Industries (M) Sdn Bhd.Based on the initial PPA dated May 2022, the solar plant to be built on Chin Herr’s premises was to have a capacity of 3MW (3,000.24KW). (The Edge)

Tropicana Corp Bhd has proposed to sell its Courtyard by Marriott Penang Hotel for a total cash consideration of RM165m, to a unit of IOI Properties Group Bhd, confirming The Edge report last month. The property developer said its wholly owned subsidiary, Tropicana Macalister Avenue (Penang) Sdn Bhd has entered into a sale and purchase agreement with IOI PFCC Hotel Sdn Bhd — an indirect subsidiary of IOI Properties — for the proposed disposal. Tropicana highlighted the proposed disposal is aligned with the group’s ongoing initiatives to monetise its landbanks and investment properties, reduce its net gearing and improve its financial position. (The Edge)

Johor Plantations Group Bhd has inked a venture agreement with Fuji Oil Asia Pte Ltd, a subsidiary of Japan's Fuji Oil Group, to develop a specialty oils and fats refinery operating on renewable energy. The plantation group, which is slated for a Main Market listing on the local bourse, said the strategic partnership brings together the expertise and commitment of two industry leaders and aligns with both companies’ dedication to environmental responsibility and innovation. According to the group, Fuji Oil Group is a renowned global food ingredient manufacturer. (The Edge)

Dataprep Holdings Bhd has announced that its Indonesia subsidiary has been selected as the winner and lead consortium member to construct and maintain passive telecommunication infrastructure in Bandung, Indonesia. Dataprep said the passive telecommunication infrastructure development will include construction and maintenance of underground telecommunication infrastructure including the ducting, manhole and handhole for installation of fibre optics and construction of telecommunication microcell pole. The consortium, led by Dataprep unit PT Dataprep Teknologi Indonesia Tbk, includes two other consortium members namely PT Bintang Trans Khatulistiwa Tbk and PT Raka Mitra Bersama Tbk. (The Edge)

Source: Mplus Research - 29 Jan 2024