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Author: MalaccaSecurities   |   Latest post: Mon, 18 Jan 2021, 10:39 AM


Mplus Market Pulse - 18 Jan 2021

Author: MalaccaSecurities   |  Publish date: Mon, 18 Jan 2021, 10:39 AM

Market Review

Malaysia: The FBM KLCI (-0.5%) extended its losses after being traded mostly in the negative territory, dragged by profit taking activities in selected banking heavyweights. The lower liners, however, extended their gains on rotational play, while the broader market ended mixed.

Global markets: US stockmarkets extended their losses as the Dow slipped 0.6% in wake of the weaker-than-expected earnings from Wells Fargo, lower crude oil prices and sluggish retail sales data that declined -0.7% MoM in December 2020. European stockmarkets retreated, while Asia stockmarkets were mostly downbeat.

The Day Ahead

With the retreat of crude palm oil prices, coupled with the speculation of another round of Overnight Policy Rate (OPR) cut, investors could further reduce their position in plantation and banking heavyweights; that may translate to potential negative trading tone amongst banking stocks and dragging down the FBM KLCI this week. Also, market sentiment may remain weak amid the ongoing rising Covid19 cases despite the re-imposition of MCO. On the flipside, we expect some rotational play towards building materials segment amid the firmer commodity prices such as tin, iron, aluminium and etc.

Sector focus: Based on the above setup, traders may stay away from banking and plantation sector. Meanwhile, furniture and technology sectors may be on traders’ radar given the WFH mode could boost demand for furniture and technology stocks – the latter being higher demand for technology gadgets and 5G products. Also, the industrial products counters could trade higher for the session.

FBMKLCI Technical Outlook

The FBM KLCI broke the support of 1,630 last Friday, closing lower at EMA20 level. We expect the key index to consolidate before trending higher as both the MACD and RSI indicators are hovering sideways for now; the MACD Line is slightly above zero, while the RSI is hovering near 50. The FBM KLCI’s resistance will be pegged around 1,650-1,660. Support will be set around 1,620, followed by 1,590.

Company Brief

Samaiden Group Bhd has won a contract to build a 2.0-MWac biomass power plant in Hulu Terengganu from Gimzan Plywood Sdn Bhd. Construction for the contract valued at RM25.8m expected to start on 2nd February 2021 and will be completed within 23 months. (The Star)

KNM Group Bhd has proposed to raise up to RM54.9m by placing out 296.9m new shares at an assumed price of 18.5 sen each to investors. Proceeds from the exercise, which will expand its share capital base by up to 20.0%, will be utilised to buy raw materials and as payment to contractors (RM33.6m) and repay bank borrowings (RM20.0m). (The Star)

Notion VTEC Bhd's recent tests for Covid-19 among its employees found there were 87 positive and suspected cases. As precautionary and preventive measures, it had conducted tests on workers who had close contact with the infected workers. It had also carried out thorough disinfection work and the affected operational units are expected to resume their operations within three days once the disinfection and sanitisation are completed. (The Star)

Kanger International Bhd’s wholly-owned subsidiary, Kanger Ventures Sdn Bhd, has entered into collaboration agreements with multiple main contractors to carry out the remaining construction works across six sites in Kuala Lumpur and Pahang totalling RM495.9m. Under the terms of the agreements, Kanger will be responsible for the project management role and coordinate the remaining construction work of the six projects. (Bernama)

SKP Resources Bhd is temporarily closing its Johor Bahru operations from 16th January 2021 till 29th January 2021 to facilitate Covid-19 screening of its employees, after five of them tested positive last week. This temporary closure is expected to result in a capacity loss of 3.0% of its annual output. (The Edge)

Batu Kawan Bhd has updated that it now controls 92.1% of Chemical Company of Malaysia Bhd (CCM), after receiving more acceptances for its RM3.10 takeover offer. With its shareholding rising above 90%, Batu Kawan will not be maintaining CCM’s listing on the Main Market of Bursa Malaysia. The group said the offer will remain open for acceptance until 2nd February 2021. (The Edge)

Daya Materials Bhd, a Practice Note 17 (PN17) company has secured an RM23.9m construction sub-contract in Banting, Selangor. The sub-contract awarded to its 51.0%-owned subsidiary Daya CMT Sdn Bhd involves the construction of a recycle pulp and packaging paper plant in Mahkota Industrial Park. It was awarded by Sing Foong Niap Engineering Sdn Bhd and is targeted to be completed by 30th June 2021. (The Edge)

MESB Bhd plans to venture into the waste recycling business, as it sees its lossmaking trading and retailing of apparel and leather products business to continue to face challenges amid the Covid-19 pandemic. The waste recycling business has a favourable outlook to enhance its prospects and financial performance, as well as reduce its sole dependency on the existing business. (The Edge)

Seacera Group Bhd is selling a 72,770-sqm land in Taiping, Perak to AT Systematization Bhd’s glove unit for RM10.5m. The land being sold to AT Glove Engineering Sdn Bhd was valued at RM11.7m by an independent valuer in June 2015. (The Edge)

Tenaga Nasional Bhd (TNB) will implement the government-approved enhanced terms for the electricity connection charge and connected load charge, effective 15th January 2021. A connection charge is the upfront payment made by consumers who require new electricity supply infrastructure or an upgrade of existing infrastructure to cater for additional power supply. (The Edge)

Genting Malaysia Bhd's (GenM) wholly-owned subsidiary Genting UK PLC permanently closed its Genting Casino Southport, in the north-west of England, with 38 staff members facing redundancy. The gaming group has already closed casinos in Margate, Torquay and Bristol and has reduced its workforce in London, Glasgow, Edinburgh, Blackpool and Birmingham. (The Edge)

Federal Land Development Authority (Felda) has acquired 5.1m FGV Holdings Bhd shares for a total of RM6.6m on 14th January 2021, following an earlier purchase of 22.0m shares, as part of its efforts to take the group private. The smaller tranche of shares was also bought at RM1.29 apiece, one sen below its cash offer of RM1.30 for FGV shares. (The Edge)

Source: Mplus Research - 18 Jan 2021

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Mplus Market Pulse - 15 Jan 2021

Author: MalaccaSecurities   |  Publish date: Fri, 15 Jan 2021, 10:44 AM

Market Review

Malaysia: The FBM KLCI (-0.1%) finished mildly lower, dragged down by the weakness in gloves heavyweights as investors also booked in further profits from the previous gains. The lower liners, however, continue their winning streak, while the broader market finished mixed.

Global markets: US stockmarkets edged lower after erasing all their intraday gains as the Dow fell 0.2% after the weekly unemployment claims data rose to the highest level since August 2020. European stockmarkets were upbeat, but Asia stockmarkets finished mixed.

The Day Ahead

Tracking the negative sentiment on Wall Street, coupled with the pullback in the FBM KLCI yesterday, we expect trading tone on the local front to further consolidate. Also, the overheated rally in the technology stocks may take a breather with traders digesting their gains over the next few days. Given some of the essential sectors are still operating under MCO 2.0, companies shall be able to register some earnings at least for this quarter. Meanwhile, we expect traders to lookout for LSS4 and immigration related news over the near term. Sector focus: Under the MCO 2.0, traders may rotate their funds into furniture related stocks, on the back of their earnings certainty in February reporting season. Meanwhile, we expect construction, building materials, furniture and O&G sectors to trade slightly higher today – the O&G sector might be benefited from firmer crude oil price (currently trading above USD56).

FBMKLCI Technical Outlook

The FBM KLCI has taken a pause above the EMA9 yesterday. Based on the technical indicators, MACD Histogram has extended another green bar, while the RSI is hovering above 50. Hence, we should be expecting the FBM KLCI to take a mild breather along EMA9 before surging higher towards the envisaged resistance around 1,650-1,660. Meanwhile, support will be set around 1,630, followed by 1,620.

Company Brief

The Federal Land Development Authority (Felda) bought 22.0m shares of FGV Holdings Bhd from the open market as it moves closer to take over the plantation company. The shares were purchased at RM1.29 each. The cash offer of RM1.30 per share would be opened for acceptances until 5.00pm on 2nd February 2021, unless extended or revised with an announcement to be made two days prior to the closing date. (The Star)

Most of AirAsia X Bhd's (AAX) lessors support a restructuring plan, and the Malaysian airline has received interest from potential investors for fundraising after reorganisation, court documents filed this month show. In emails attached to the court filings, supportive lessors wanted to continue discussions with the budget airline and potential new investors, seeking more equitable terms and new commercial arrangements. (The Edge)

Pharmaniaga Bhd is in the midst of negotiation with the Ministry of Health for the purchase of the Covid-19 vaccine from China’s Sinovac Life Sciences Co Ltd for distribution in Malaysia. This is in response to Bursa Malaysia's query, Pharmaniaga said approval of the National Pharmaceutical Regulatory Agency (NPRA) is required for manufacturing and distribution of the Covid-19 vaccine in Malaysia. (The Edge)

Boustead Heavy Industries Corp Bhd (BHIC) has handed over the littoral mission ship (LMS) named Sundang to the Government through the Royal Malaysian Navy (RMN). This is the second of four units of LMS being built by Wuchang Shipbuilding Industrial Group Shipyard (WSIG) in Shuangliu, China, under a contract signed in 2017 between Malaysia’s defence ministry and Boustead Naval Shipyard Sdn Bhd (BNS), with the cooperation of China Shipbuilding and Offshore International Co Ltd. (The Edge)

See Hup Consolidated Bhd is selling nine plots of land in Penang measuring 853,863 sqf in total for RM47.0m cash to Tek Seng Holdings Bhd and a vehicle controlled by the latter’s executive chairman and managing director. The proposed disposal is expected to generate a pro forma gain of RM28.1m. The market value of the property is RM45.2m, as appraised by C H Williams. (The Edge)

JCY International Bhd has reported that a major customer has decided to reduce and eventually stop purchases of one of the company's component products, which will have negative impacts on JCY's financial standing. This comes as HDD producers are embarking upon a rationalisation of their supply chain, which in turn affects HDD component suppliers. (The Edge)

Dayang Enterprise Holdings Bhd has been awarded a three-year maintenance contract by Mubadala Petroleum’s entity, MDC Oil & Gas (SK320) Ltd. The value of the contract is based on work orders issued by Mubadala Petroleum throughout the contract duration and shall include any or all other work and services which is generally related to the scope of works in this PM-MCM Contract at a fixed schedule of rates. (The Edge)

Property developer Platinum Victory Sdn Bhd's executive director Gan Yee Hin has emerged as a substantial shareholder of Red Ideas Holdings Bhd, the developer of the private community platform JaGaApp. Gan acquired 8.4m shares in the LEAP Market-listed technology-based company via a direct business transaction, bringing his total shareholding to 13.4m or a 12.8% stake. (The Edge)

George Kent (Malaysia) Bhd will use the proceeds from its latest sukuk wakalah programmes to finance investments, capital expenditure and working capital requirements. The proceeds from the Islamic Commercial Papers (ICP) programme of up to RM100.0m and Islamic Medium-Term Notes (IMTN) programme of up to RM500.0m will also go towards refinancing existing borrowings and financings, including the refinancing of future Islamic financings, the group said. (The Edge)

Jiankun International Bhd has proposed to undertake a private placement of up to 20.0% of the total number of issued shares in the company to raise an indicative maximum amount of RM23.0m, which will partly fund the group’s planned land acquisition in Melaka and development costs of the tract. The development of the leasehold land at Pekan Klebang within Central Melaka District is expected to contribute positively to the earnings of the group. (The Edge)

Perak Transit Bhd has teamed up with concession owner Energetic Point Sdn Bhd to operate Terminal Sentral Kuantan in Pahang, which serves as a hub for express buses as well as local city buses. The collaboration is in line with the group’s business plans to develop and operate integrated public transportation terminals in other cities. (The Edge)

Source: Mplus Research - 15 Jan 2021

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foo 《2021年财政预算案》带来的利好消息分析员均认为,政府没有如市场预料般向4大手套厂征收暴利税而是要求相关公司捐献合计4亿令吉供政府购买疫苗和医疗设备。政府今年将拨款10亿令吉推动国内高附加价值科技领域的研究和发展活动受惠的工业区有槟城峇都加湾、吉打居林科技园区内的航天和电子领域。基于政府拨款1亿5000万令吉支持中小企业迈向数码科技,大众投行分析员认为,阁代科技(GREATEC,0208,科技股)可从该措施获利,因阁代科技在上述两科技园区内均有厂房。维毅集团(ISTONE,0209,科技股)、MMS创投(MMSV,0113,科技股)、腾达科技(PENTA,7160,科技股)和伟特科技(V I T R O X,0097,科技股)这些自动化解决方案供应商会是受惠公司。
18/01/2021 10:14 AM

Mplus Market Pulse - 14 Jan 2021

Author: MalaccaSecurities   |  Publish date: Thu, 14 Jan 2021, 9:00 AM

Striding higher 

Market Review

Malaysia: The FBM KLCI (+1.5%) recovered all its previous two session of losses driven by bargain hunting, coupled with the higher crude oil prices whereby the local bourse recorded more than half of the constituents finished higher yesterday. The lower liners extended their gains, while the healthcare sector (0.1%) was the sole decliner on the broader market.

Global markets: US stockmarkets ended on a mixed note as the Dow (-0.03%) slipped but the S&P 500 (+0.2%) extended its gains as in investors monitor on the progress over the much anticipated stimulus bill. Meanwhile, both the European Asia stockmarkets ended mostly higher.

The Day Ahead

Tracking the gains on regional markets, the FBM KLCI has closed at the highest level since the beginning of the year, with buying interest seen in the recovery themed stocks such as banking and gaming heavyweights. Investors shrugged off concerns on the first day of MCO 2.0 while the essential sectors remain opened. The key index may take a little following yesterday’s rallies, but we expect the downside to be limited. The lower liners saw some rebound signs as the indexes made significant headway yesterday after recent consolidation.

Sector focus: We expect traders to focus on stocks with earnings certainty ahead of the February reporting season. Sectors that may be under the limelight include furniture, technology, gloves. Meanwhile, we believe financial services may trade higher as momentum has picked up during the final hour of trading yesterday.

The FBM KLCI has breakout above its immediate resistance at 1,630, albeit accompanied by lower trading volume. With the technical indicators turning positive, where MACD Histogram has extended another green bar, while the RSI is rising above 50, we expect the key index may surge higher in the near- to mid-term after taking a mild breather. The FBM KLCI’s key resistance will be located around 1,660. However, should the key index drops below 1,630, next support is located around 1,590.

Company Brief

Eco World Development Group Bhd has ceased its merger talks with UEM Sunrise Bhd and it will now focus on its own business plans for FY21. The decision also came due to the current challenging environment with the re-implementation of Movement Control Order. (The Star)

Heitech Padu Bhd has secured a fresh three-year contract from the Inland Revenue Board worth RM35.2m. The renewed contract was for the supply, delivery and renewal of CA Gen software, Access Gen (TSO) and Composer Report for IRB's mainframe system. The contract is for a period of three years starting from 1st February 2021 to 31st January 2024. (The Star)

Greatech Technology Bhd has acquired a piece of land in Batu Kawan, Penang for RM13.4m cash, as the company seeks to relocate its plant in Lunas, Kedah to a new site closer to its headquarters. Greatech entered into a deal with Penang Development Corp on 13th January 2021 to purchase the 5.9-ac. site. The physical construction is expected to be completed by end-2021. (The Star)

Landmarks Bhd has reported that The Andaman, a resort owned by the company in Langkawi, Kedah, has stopped its operations due to a major fire incident. All guests and staff have been evacuated safely and any property and financial losses arising from this incident are covered by insurance policies taken up by the company. (The Star) Malaysian Rating Corp Bhd (MARC) has assigned preliminary ratings of MARC-1IS and A+IS to George Kent (Malaysia) Bhd’s proposed RM100.0m Islamic Commercial Papers (ICP) Programme and RM500.0m Islamic Medium-Term Notes (IMTN) Programme. The ratings outlook is stable and reflect George Kent’s conservative capital structure, strong liquidity position and a relatively stable water meter manufacturing business that is well supported by a long-standing relationship network, an extended geographical footprint and brand recognition. (The Edge)

Chin Hin Group Property Bhd has proposed to acquire a 1,943-sqm piece of vacant land in Kuala Lumpur for RM20.9m to develop office lots. The group indirect 51.0%- owned unit, BK Alliance Sdn Bhd is buying the land from Suez Domain Sdn Bhd. The 94-year lease on the land expires in 2112. (The Edge)

WCT Holdings Bhd has reported that a judicial committee has upheld the Dubai Court of Appeal's decision that recognises a final award of RM1.2bn in favour of the company in its dispute with Meydan Group LLC over the Nad Al Sheba Dubai Racecourse project. WCT will continue to pursue its legal rights in respect of the final award, which was issued by the Arbitral Tribunal in 2015 when it initiated arbitration proceedings against Meydan in 2009 over the cancellation of the RM4.6bn race course project in Dubai. (The Edge)

AE Multi Holdings Bhd has bagged another project to set up the production facility for PNE PCB Bhd, a new entrant to the rubber glove industry. The company announced that its unit AE Multi Industries Sdn Bhd has received a letter of award from PNE Glove Sdn Bhd to design, build and deliver on a turnkey basis a glove manufacturing factory of up to 59,000 sqf within eight months. The factory will have the capacity to house up to 10 glove-dipping lines for the sole purpose of manufacturing medical grade nitrile gloves. (The Edge)

Aeon Credit Service (M) Bhd has been granted a renewal for its money-lending licence under the Moneylenders Act 1951 and Moneylenders (Control and Licensing) Regulations 2003 by the Ministry of Housing and Local Government. The licence is valid for another two years effective 15th January 2021 till 14th January 2023 and is subject to renewal with the Ministry. (The Edge)

Dayang Enterprise Holdings Bhd has won a contract extension from Sarawak Shell Bhd for the provision of an accommodation workboat, Dayang Opal. This is under the umbrella contract for offshore support vessel services for Petronas’ Petroleum Arrangement Contractors’ drilling and project activities. (The Edge)

Petronas Dagangan Bhd (PetDag) and Maxis Bhd have inked a strategic partnership to jointly offer converged solutions focusing on safety, security and sustainability for businesses. The firms said the partnership will focus on leveraging big data and advanced analytics to co-create hyper personalization for an enhanced retail experience. (The Edge)

Genting Malaysia Bhd’s Resorts World Genting (RWG) has issued a notice that it anticipates a decline in number of visitors following the implementation of the MCO, Conditional MCO (CMCO) and Recovery MCO (RMCO). It will be operating at a lower capacity and that some of its offerings may not be available from 13th January 2021. (The Edge)

Wintoni Group Bhd has been granted a further extension of time, until 30th June 2021 to appoint a replacement sponsor and submit its regularisation plan, subject to the appointment of a sponsor by 1st March 2021. (The Edge)

Source: Mplus Research - 14 Jan 2021

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Mplus Market Pulse - 13 Jan 2021

Author: MalaccaSecurities   |  Publish date: Wed, 13 Jan 2021, 9:20 AM

Market Review

Malaysia: The FBM KLCI (-0.3%) retreated but managed to recoup most of its intraday losses as political uncertainty were temporary brushed aside following the implementation of State Of Emergency (SOE). Amidst the positive broader market, the lower liners finished higher, but the broader market closed mixed.

Global markets: US stockmarkets finished mildly higher as the Dow climbed 0.2% on a choppy trading session as investors shift their attention to the prospects of economic recovery, coupled with the Covid-19 vaccine rollout, targeting 50% of population by May 2021. European stockmarkets extended their losses, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI recouped most of its intraday losses in the afternoon session yesterday, as market sentiment was lifted by a nationwide state of emergency proclaimed by the Yang di-Pertuan Agong that will be enforced until 1st August 2021. While the move should be reducing some of the political uncertainties in the country, the key index still closed lower as the number of Covid-19 cases remains high. However, we believe the local bourse should find stability soon as some bargain hunting activities were noticed in the market. The lower liners may extend their gains yesterday as the rise in the indexes was supported by rising trading volume throughout the day.

Sector focus: Investors are likely to participate within the healthcare sector which sees earning certainties amid rising Covid-19 cases. Besides, transportation & logistics counters should be also under the limelight due to further lockdown measures starting today.

FBMKLCI Technical Outlook

While the FBM KLCI continued to close below the EMA20 level, a consolidation is expected to the key index with the 1,600 level continues to hold. Immediate resistance at 1,660, while support is pegged at 1,570, followed by 1,560. Indicators remained mixed as the MACD Histogram has extended another green bar, while the RSI remains below 50.

Company Brief

Ho Wah Genting Bhd is planning to raise up to RM34.6m by placing out new shares in the company to investors. Proceeds from the proposed private placement will be used to expand its healthcare business, repay short-term advances provided by Hong Kong-based Prime King Investment Ltd (RM10.0m) and as general working capital. Under the fund raising scheme, HWGB plans to issue up to 60.67 m new shares to new investors, at an assumed issue price of 57 sen a share. (The Star)

Spring Art Holdings Bhd has confirmed that some of its employees have tested positive for Covid-19. Following this, the operations of Spring Art’s factories A and B and its administrative office have been temporarily suspended and shall resume on 20th January 2021. The company added that the group had incurred an estimated cost of RM200,000 resulting from swab tests and disinfection works. (Bernama)

Phamaniaga Bhd set to carry out the fill and finish of Covid-19 vaccine developed by Sinovac Life, which is expected to be ready to be distributed to the public by end-March 2021. The agreement is for the supply of 14.0m doses of Covid-19 vaccine to be carried out for fill and finish activity. Sinovac Covid-19 vaccine has completed the phase three trials in Brazil and Turkey, and is now in the process of getting approvals in both countries. (Bernama)

QL Resources Bhd's takeover offer for shares it does not own in Boilermech Holdings Bhd has been extended to 29th January 2021. The initial deadline for the conditional mandatory general takeover offer at 95 sen per share was 14th January 2021. QL currently controls a 48.4% stake or 249.8m shares in Boilermech. (The Edge)

The Federal Land Development Authority (Felda) has issued an offer document in relation to its unconditional mandatory takeover offer for all remaining ordinary shares in FGV Holdings Bhd which it does not own, except treasury shares. The cash offer of RM1.30 per share would be open for acceptances until 2nd February 2021 unless extended or revised. (The Edge)

I-Stone Group Bhd has temporarily halted production activities at two of its subsidiaries in Johor Bahru after 11 employees tested positive for Covid-19. Four local engineers from i-Stone Systems Sdn Bhd contracted the virus from its customer's workplace, while seven foreign employees — four from i-Stone Engineering Sdn Bhd and three from PA Metal Technics Sdn Bhd have contracted the virus in a dormitory managed by a third-party service provider. (The Edge)

Handal Energy Bhd is looking to raise up to RM11.1m via a private placement to repay its borrowings and fund its working capital. It is planning to issue up to 49.5m new shares or 20.0% of its share capital to third-party investors to be identified. The indicative issue price of placement shares is assumed to be 22.5 sen apiece, which is a 2.28 sen or 9.2% discount to its five-day volume-weighted average market price of 24.78 sen. (The Edge)

Mulpha International Bhd's wholly-owned unit Mulpha Australia (Holdings) Pty Ltd has accepted a syndicated credit facility of A$342.0m (RM1.07bn) from OverseaChinese Banking Corp Ltd and United Overseas Bank Ltd in Australia to finance the refurbishment works at InterContinental Sydney Hotel and to refinance its existing borrowings. (The Edge)

ATTA Global Group Bhd's executive director Tan Kim Hee has been detained by the police. Tan was held by Johor police to assist an investigation not related to the group or any of its subsidiaries and associate companies. (The Edge)

MTD ACPI Engineering Bhd has won a RM33.4m construction contract from the Public Works Department in Pahang. The group wholly-owned subsidiary MTD Construction Sdn Bhd will undertake the Police Training Centre project in Bentong. The contract is due to be completed on 11th July 2022. (The Edge)

Malaysia Airports Holdings Bhd's (MAHB) passenger traffic for December 2020 rose 24.2% MoM to 2.3m. Malaysia's December 2020 traffic performance was impacted by the lifting of the interstate travel ban on 7th December 2020 with domestic passenger movements totalling 1.1m. (The Edge)

AirAsia Group Bhd domestic flights in Malaysia remain operational despite the planned implementation of the Movement Control Order across several states and federal territories from today until 26th January 2021 and that guests who do not wish to travel during this period can cancel their flights voluntarily and opt for unlimited flight changes without any additional cost. (The Edge)

Gas Malaysia Bhd has set the average natural gas selling price for the distribution segment of its unit Gas Malaysia Energy and Services Sdn Bhd at RM22.14/mmBtu for 1Q2021, which is RM11.51/mmBtu or 34.2% lower than 2020. (The Edge)

Source: Mplus Research - 13 Jan 2021

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Mplus Market Pulse - 12 Jan 2021

Author: MalaccaSecurities   |  Publish date: Tue, 12 Jan 2021, 8:49 AM

Market Review 

Malaysia: The FBM KLCI (-1.0%) started off the week on a dour note as the key index languished in the negative territory for the entire trading session prior to the press conference in regards to the MCO announcement by the PM yesterday. The lower liners were fairly mixed, while the broader market was again mostly lower.

Global markets: US stockmarkets snapped a four-day rally as the Dow (-0.3%) and S&P 500 (-0.7%) retreated from the all-time high on mounting concern over the stretched valuations, whilst the Covid-19 cases remain at large. European stockmarkets also turned downbeat, while Asia stockmarkets finished mixed.

The Day Ahead

Fear over the new lockdown measures has driven profit taking activities on the local bourse, leading the FBM KLCI to close lower after a choppy trading session yesterday. Following the Prime Minister’s special address on the implementation of tighter movement restrictions in most parts of the country, we expect the market outlook to remain subdued today as further lockdowns may cause further stress to the economy. However, the negative market sentiment may not last long while the market awaits for vaccine rollout. The lower liners might also see greater selling pressure.

Sector focus: We believe the plantation sector may continue to be under the limelight after emerging as the biggest winner across the broader market yesterday, supported by Malaysian lower palm oil inventories in December according to Malaysian Palm Oil Board (MPOB). Besides, follow-through buying interest in the technology sector may drive the sector higher.

FBMKLCI Technical Outlook

The FBM KLCI has formed a bearish candle as the key index did not manage to close above the EMA20 level. Downside pressure is expected to remain in place with the immediate support at 1,590, followed by 1,575. Indicators remained mixed as the MACD Histogram has extended another green bar, while the RSI remains below 50.

Company Brief

Advanceon Holdings Bhd has entered into two separate deals to design, build and maintain solar energy generating systems at two factories, each in Rawang, Selangor and Seremban, Negeri Sembilan. Both projects are for a period of 21 years that will generate a total of 994-kWp under the Net Energy Metering scheme. The project is Rawang is expected to commence in 1Q2021, while the project in Seremban is sscheduled to start in 2Q2021. (The Star)

Hubline Bhd has secured a RM63.2m contract from the Sarawak state department of health to provide aircraft and helicopter services. The aircraft and helicopters will be utilised for the flying doctor service, medical evacuation service and other ancillary health services. The contract is for 48 months, from 1st January 2021 to 31st December 2024. (The Edge)

HLT Global Bhd has proposed to acquire the remaining 45.0% stake in rubber glove subsidiary, HL Rubber Industries Sdn Bhd (HLRI) for RM90.0m via the issuance of 90.0m new HLT shares at RM1.00 per share. HLT decided to raise its stake in HLRI, given the favourable prospects of the rubber glove industry. (The Edge)

Public Bank Bhd is offering repayment relief for loan and financing customers who have been affected by the recent floods in several states. The repayment relief includes a deferment of monthly instalment for loan and financing of up to six months, on a request basis. (The Edge)

Three shareholders of Asia Media Group Bhd are seeking to replace four of the company’s existing directors with new ones. Chow Zee Neng, Sim Ah Yoke and Datuk Chu Boon Tiong, who collectively own at least 10.0% of the company’s shares, have written to the board of Asia Media to give notice of their intention to move resolutions to effect the proposed board changes at an EGM on 18th February 2020. They are seeking to remove existing directors Datuk Prof Raja Munir Shah Raja Mustapha, Datuk Kang Hua Keong, and Chua Yeong Lin. (The Edge)

Source: Mplus Research - 12 Jan 2021

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Mplus Market Pulse - 11 Jan 2021

Author: MalaccaSecurities   |  Publish date: Mon, 11 Jan 2021, 8:56 AM

Market Review

Malaysia: The FBM KLCI (+1.9%) rallied to close above the 1,600 psychological level on gains from the glove heavyweights on the back of growing fears of a new lockdown amid spike in Covid-19 cases. The lower liners ended lower, while the healthcare sector (+3.9%) outperformed the mostly red broader market.

Global markets: US stockmarkets finished the first week of 2021 to record high as all Dow (+0.2%) climbed higher amid investors’ hope for more political stability and trillions of USD stimulus packages demanded by the President-elect Joe Biden. European stockmarkets were in the green, while the Asian stockmarkets also closed mostly higher.

The Day Ahead

Sharp gains in gloves heavyweights came as investors feared for another round of nationwide or certain states lockdown being imposed as buying activities have now catered towards the healthcare sector. As it is, all heads will turn to the Covid19 public health measures that are expected to be more stringent today. With the prospects of economy recovery remain clouded by the rising number of Covid-19 cases, we think that the lower liners may continue to remain under pressured over the near term on mounting concerns over the disruption of supply chain with numerous factories and retail outlets were temporary closed.

Sector focus: We remain upbeat on the healthcare sector as resumption of buying activities may prolong on the rising concern over the surging Covid-19 cases nationwide. At the same time, the surging crude oil prices will provide further uplift into the energy sector

FBMKLCI Technical Outlook

The FBM KLCI has formed a bullish candle to extend its gains as the key index remained firm above the 1,600 level. With signs of recovery stance remain in place; the immediate resistance is located at 1,650-1,680. Downside risks are at 1,600 and 1,580. Indicators remained mixed as the MACD Histogram extended another green bar, while the RSI remains below 50, suggesting the technical rebound remain on course.

Company Brief

The Employees Provident Fund (EPF) has ceased to be a substantial shareholder of Top Glove Corp Bhd, after disposing of 40.0m shares on 5th January 2021. The disposal of the shares reduced its shareholding to below 5.0%. Separately, Top Glove defended its board after BlackRock Inc issued a scathing statement earlier, attacking the firm's handling of a coronavirus outbreak and saying it had voted against the re-election of six directors to Top Glove's board. The six independent directors were re-elected at the company's annual general meeting, gaining between 86.5% and 72.3% of shareholder votes. The company claimed that the directors have served an average of six years, and that the board meets regularly to discuss the pandemic and other governance matters. (The Star)

AT Systemization Bhd has mutually agreed to terminate two memorandum of understanding (MOU) with Shanghai Jienaxin Mech & Elec Equipment Co Ltd to produce tooling parts for mask-making machines and disinfection chambers due to the absence of any further progress on the MOUs. (The Sun Daily)

APFT Bhd will be delisted from Bursa Malaysia on 13th January 2021, after the bourse dismissed the company’s appeal for an extension of time to submit its regularisation plan for approval. Bursa Malaysia said that upon APFT’s delisting, the Practice Note 17 company will continue to exist, but as an unlisted entity. (The Edge)

SKP Resources Bhd announced five employees of its wholly-owned subsidiary, Syarikat Sin Kwang Plastic Industries Bhd, have tested positive for Covid-19. The group will continue to adhere to the standard operating procedures as directed by the MoH. (The Edge)

VS Industry Bhd has set aside RM200.0m in capital expenditure (capex) for FY21 to expand and enhance its capacity and capabilities. Despite 2020 being an arduous year for the company in the face of unprecedented market challenges stemming from the Covid-19 pandemic and ongoing macroeconomic issues, it managed to secure two new customers from the United States. (The Edge)

A subsidiary of Bintai Kinden Corp Bhd has been appointed by South Korea’s SLAB Asia Co Ltd, as the exclusive distributor for the Greenie Medi Cold Chain Box designed for the storage and distribution of Covid-19 vaccines in Malaysia. The subsidiary, Bintai Healthcare Sdn Bhd, has also been appointed an authorised distributor for the product in Southeast Asian countries. The Greenie Medi Cold Chain Box was designed for the exclusive use in transporting and storing medical products at very low temperatures, as it keeps the inbox temperature at -70℃ for up to 120 hours. (The Edge)

Sentoria Group Bhd is selling two parcels of land measuring 747,069 sq m collectively in Kedah for RM27.9m, to repay bank borrowings. Its 75.0%-owned Sentoria Utara Sdn Bhd had inked a sale and purchase agreement (SPA) with Redvalley Development Sdn Bhd for the sale of the freehold parcels in Amanjaya, Kuala Muda. Sentoria will be using RM26.7m of the sale proceeds to repay bank borrowings, which it noted will save it RM1.6m worth of interest per year, based on the average interest rate of its borrowings of about 6.0% per annum. The balance RM1.2m will be used for working capital. (The Edge)


Source: Mplus Research - 11 Jan 2021

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