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Mplus Market Pulse - 13 Mar 2024

Publish date: Wed, 13 Mar 2024, 10:40 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Technology Sector Rally Still Persist

Market Review

Malaysia: The FBM KLCI (+0.64%) ended higher, in line with the positive performance in the regional stock markets, led by selected Utilities and Telco heavyweights. On the broader market, the Healthcare sector (+1.65%) was the leading sector, while the Technology sector (-0.57%) was the sole decliner.

Global markets: Wall Street ended higher led by the rally in NVIDIA, despite CPI data came in higher-than-expected. Both the European and Asian stock markets ended higher, the latter having Nikkei as the sole decliner as Japan’s inflation data came in hotter-than-expected which may delay the potential rate cuts from Bank of Japan.

The Day Ahead

The FBM KLCI ended more positively above the 1,550 level after a 4-day winning streak with the help of Utilities heavyweight such as TENAGA. Meanwhile, the US stock markets ended more positively with S&P500 hitting record highs despite core CPI and CPI data came in slightly above expectations. Still, the market could be looking at June for the Fed to reduce the interest rates. With the positive rebound on Wall Street, the buying interest may spillover towards stocks on the local front. On the commodity markets, Brent oil is ranging along USD81-83/bbl, while the Gold price pulled back below USD2160 after the spike in CPI. For the FCPO, it continues to trade on a positive note rising above RM4,150.

Sectors focus: We opine that the Technology stocks on the local front could turn positive with the help from the positive sentiment on Wall Street. Meanwhile, we like the commodities sectors such as the Plantation and O&G sectors given the firmer trading tone on FCPO and Brent oil price. Besides, we favour selected Consumer, Building Material, Shipping, Property and Utilities stocks.

FBMKLCI Technical Outlook

The FBM KLCI index continued trending upwards. The technical readings on the key index were positive, with the MACD Histogram forming a rounding top formation, while the RSI is above 50. The resistance is envisaged around 1,565-1,570 and the support is set at 1,540-1,545.

Company Brief

CTOS Digital Bhd said it is business as usual for the group as the recent court decision against its subsidiary does not prevent it from continuing to provide credit score services. The company said it continues to operate and provide the information to financial institutions and clients and insisted that the company is allowed to provide credit scores under the CRA, based on the Act’s definition of credit reporting business, credit information and credit report. (The Edge)

Microlink Solutions Bhd, whose share price plunged to its lowest in more than two years on Monday, said it is not aware of any possible explanation for the unusual market activity (UMA). The group was slapped with the UMA query on Monday after its shares dropped 36.1%, or 30 sen, to hit its limit-down of 53 sen, before continuing to nosedive throughout Tuesday, to close at 37 sen, down 16 sen or 30.19%, for a new four-year low. (The Edge)

Eversendai Corp Bhd said its unit is currently in talks with the Inland Revenue Board (IRB) to withdraw the winding-up petition initiated by the IRB, following the settlement of the amount allegedly owed. Its wholly owned unit Eversendai Engineering Sdn Bhd (EESB) received the winding-up petition letter from IRB on Feb 21, claiming a total of RM1.97m, being outstanding tax liabilities plus interest of 5% and cost. (The Edge)

Sarawak Consolidated Industries Bhd’s (SCIB) RM97.75m contract with Landasan Kapital (M) Sdn Bhd has fallen through following a mutual termination between the two parties. The engineering, procurement, construction and commissioning contract, originally planned to span 23 months, involved the supply of materials, labour, tools, and equipment for civil, structural, architectural, and mechanical works related to the construction of a residential project. (The Edge)

Financially troubled Sapura Energy Bhd has been granted a three-month extension by the Corporate Debt Restructuring Committee (CDRC) to push the deadline of its standstill period, which shields it from actions from its multi-currency financing creditors, to June 10. The CDRC’s decision had considered the current state of progress of the group’s proposed restructuring scheme, and the three-month extension starting March 11 that the group obtained from the court to convene meetings with its creditors for its debt restructuring and to restrain them from taking legal actions against it, following the expiry of the nine-month extension given previously that ended on March 10. (The Edge)

UEM Sunrise Bhd has appointed Datuk Azmar Talib as one of its independent non- executive directors, effective March 11. Currently the group CEO of TRX City Sdn Bhd, Azmar oversees the development of Tun Razak Exchange (TRX). With 40 years of experience under his belt, Azmar has worked in various sectors such as real estate, construction, banking, and project turnaround. (The Edge)

Source: Mplus Research - 13 Mar 2024

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