Healthcare Stocks Leading The Broad Market

Market Review

Malaysia: The FBMKLCI (-0.15%) continued its bearish tone for the third consecutive day and closed lower at 1608.97 pts, mainly dragged down by TENAGA and CIMB. Meanwhile, the Healthcare (+1.77%) sector experienced the largest gain, as HARTA's special dividend announcement boosted the sentiment for gloves-related counters.

Global markets: Wall Street retreated further, with the Dow notched for 4 losing days, as investors awaiting new US inflation data set for release this week. The European markets ended lower, while Asian markets ended mixed despite Beijing's stimulus package which is expected to boost sentiments across the region.

The Day Ahead

The FBMKLCI continued to trend lower for the third consecutive day, with 9 out of 13 sectors ended negatively. Similarly, Wall Street retreated further as investors traded cautiously ahead of the upcoming US CPI and PPI data which may influence the Fed's rate outlook in the FOMC meeting scheduled for December 17-18. Traders will also monitor other key events this week, including (i) initial jobless claims and (ii) ECB rate decision. In the commodities market, Brent crude oil rose marginally above the USD72 level, while gold is approaching the USD2,700 level. Nevertheless, Bitcoin broke below the USD100k level, while CPO prices had experienced a sharp pullback, violating below the RM5,000 mark.

Sector Focus: We reiterate our optimism towards the Construction and Building Materials sectors following the realisation of earnings from the establishment of data centre facilities which started earlier this year. Meanwhile, buying interest might also emerge in the data centre midstream industries under the Technology sector, such as IT solutions, cybersecurity, HDD, EMS and OSAT, spurred by the completion of data center facilities as well as the Google Cloud news yesterday. Lastly, traders can also look for trading opportunities in glove counters, as strong momentum in share price persists.

FBMKLCI Technical Outlook

The FBMKLCI retreated after hitting the 60-day MA line. Although the MACD Histogram expanded positively, the RSI hooked below 50, indicating that the momentum is mixed at this juncture. Resistance is envisaged around 1,623-1,628, and support is set at 1,588-1,593.

Company Briefs

Wan Nadiah Wan Abdullah Yaakob confirmed that she has been dismissed as the CEO of TMC Life Sciences Bhd (TMCLIFE) over alleged misconduct, adding that she will appeal the decision. Wan Nadiah said "I wish to confirm that I have not been accused of any crime, criminal breach of trust, financial mismanagement or integrity related issues. In any event, I continue to firmly deny all the allegations of misconduct the company has made against me and will be exploring all available options for a fair resolution, including seeking legal recourse". (The Edge)

Southeast Asia's second-largest bank Oversea-Chinese Banking Corp (OCBC) and fifth-largest CIMB Group Holdings Bhd (CIMB) are vying for a controlling stake in Bank Pan Indonesia (Panin Bank), three people with knowledge of the matter said. Singapore-based OCBC and Malaysia's CIMB have submitted non-binding offers for the stake offered by Australian lender ANZ and Indonesia's Gunawan family, which founded Jakarta-listed Panin Bank in 1971, two of the people said. Meanwhile, Malayan Banking Bhd (MAYBANK), Southeast Asia's fourth-largest bank, is working with an adviser on a potential bid, said the third source and a fourth person with direct knowledge of the matter. (The Edge)

Gamuda Bhd (GAMUDA) is acquiring a 20% stake in Cloud Space Sdn Bhd, a Google Cloud premier partner, for RM18m. The purchase could lead the way for Gamuda to tap into the RM36bn technology services market, with core offerings in cloud and AI- capabilities. In a related development, Gamuda is also teaming up with Dagang NeXchange Bhd (DNEX) to provide on-premises Google Cloud services to Malaysian businesses and government agencies. It has entered into a partnership with DNeX to form a joint venture company to provide novel air-gapped Google Distributed Cloud Services to Malaysia in both the public and private space. (The Edge)

SkyWorld Development Bhd (SKYWLD) has signed an agreement with the Penang state agencies to jointly develop the country's largest affordable housing project that is valued at RM13bn. Under the joint development agreement signed with the Penang Development Corporation and its subsidiary PDC Properties, the project aims to deliver over 38,000 Rumah Mampu Milik Madani and Rumah Bakat Baru Madani homes priced at between RM225,000 and RM420,000. Targeting the M40 group or those with household income below RM11,800 a month, the first phase will be launched in 2026, and the entire project spans 10 years. (The Edge)

Telecommunications network services provider OCK Group Bhd (OCK) is expanding its renewable energy portfolio with a proposed RM350m investment in a large-scale solar photovoltaic power plant in Malaysia through Solarpack Suria Sungai Petani Sdn Bhd. OCK had signed a conditional investment agreement with Spain-based Zelestra Corporacion SAU (Zelestra) and its wholly owned subsidiary Solarpack Asia Sdn Bhd (SPK Asia) for the proposed development. The investment involves OCK acquiring 1,000 redeemable preference shares in SPK Asia and for Zelestra to novate a loan of RM14.23m to OCK, which OCK will then pay in cash to Zelestra. (The Edge)

Solar energy firm Sunview Group Bhd (SUNVIEW) through its wholly owned unit Fabulous Sunview Sdn Bhd, has secured two contracts worth a combined RM196.1m to build two ground-mounted photovoltaic solar power plants with an installed capacity of 40MWp in Sungai Petani, Kedah. The first contract, valued at RM98.29m, was awarded by Dayasinar Energy Sdn Bhd, while the second, worth RM97.81m, was secured from Solarscape Energy Sdn Bhd. Both companies are involved in the operation of generation facilities that produce electrical energy. The company did not disclose the timeline for the commencement or completion of the project. (The Edge)

SNS Network Technology Bhd (SNS) has reported a five-fold rise in its third quarter net profit to RM10.2m from RM2.02m a year earlier, on improved margins and sales in both online and physical store channels amid higher demand for its information and communications technology (ICT) products. Gross margins grew to 11.3% from 7.4%, offsetting a 5.16% dip in revenue, which fell to RM249.71m from RM263.29m in 3QFY2024, primarily due to the absence of a major order from the education industry that had boosted revenue in the previous year. No dividend declared during the quarter. (The Edge)

PGF Capital Bhd (PGF) is acquiring two parcels of freehold land, totalling approximately 9.608 acres in Kulim Hi-Tech Park, Kedah, for a mixed development project - that will include a condominium, hotel, serviced residences, and several commercial elements - valued at RM600m. PFG, through its indirect joint venture company Nexel Development KHTP Sdn Bhd, is purchasing the land from Kulim Technology Park Corporation Sdn Bhd for RM12.7m. The proposed land acquisition is expected to be completed by early 2026, pending regulatory approvals, with the project to be developed in three phases over six years thereafter. (The Edge)

Mega First Corporation Bhd (MFCB), which has added a fifth turbine generator unit to boost the power generation capacity of its Don Sahong hydropower project in Laos, has secured a five-year extension to its 25-year concession for the project. Its 95%-owned unit Don Sahong Power Company Ltd, which owns and operates the project, has inked a supplemental concession agreement with the Government of The Lao People's Democratic Republic to change the commercial operation date of the project, which effectively gives rise to the extension. Among others, the agreement said instead of ending on Sept 30, 2045, the project will now end on Dec 31, 2049, as the commercial operation date has been moved to Jan 1, 2025 from Oct 1, 2020. (The Edge)

Automotive lighting product manufacturer JHM Consolidation Bhd's (JHM) 52%- owned subsidiary JHM Dekai Auto Lighting Sdn Bhd has bagged contracts worth RM300m from Perusahaan Otomobil Nasional Sdn Bhd (Proton) to supply parts for specific Proton car models. JHM said the supply of parts is expected to commence in the late third quarter of the financial year ending Dec 31, 2025 (FY2025) and will continue for a duration of five years. (The Edge)

MN Holdings Bhd (MNHLDG) has won a contract worth RM162.59m for design and building works at a hyperscale data centre in the southern region of Peninsular Malaysia. The contract was awarded to its wholly owned subsidiary Mutu Nusantara Sdn Bhd to undertake works involving the design, build and construction of a high- voltage main switching station and consumer containerised SSU for a data centre. The contract shall commence immediately, and is targeted for completion by July 2025. (The Edge)

Source: PublicInvest Research - 11 Dec 2024