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Author: MalaccaSecurities   |   Latest post: Fri, 27 Nov 2020, 11:03 AM

 

Mplus Market Pulse - 27 Apr 2020

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Consolidation In Place

  • The FBM KLCI (-0.9%) retreated following the announcement of the Movement Control Order (MCO) extension for additional two weeks to 12th May 2020 by the Malaysian Prime Minister last night. Consequently, the key index fell 2.7% W.o.W. The lower liners, however, closed mostly higher as the FBM Small Cap (+0.1%), FBM Fledgling (+1.2%), FBM ACE (+1.2%), all advanced, but broader market finished mostly lower.
  • Market breadth stayed positive as gainers outnumbered the losers on a ratio of 445-to-400 stocks. Traded volumes declined 7.2% to 4.69 bln shares as investors turned cautious after the recent run-up.
  • More than two-third of the key index components fell with the likes of Nestle (-50.0 sen), Petronas Dagangan (-42.0 sen), MISC (-32.0 sen), Malaysia Airport Holdings (-20.0 sen) and Petronas Chemicals (-16.0 sen). Major losers on the broader market include Heineken (- 72.0 sen), Carlsberg (-58.0 sen), LPI Capital (-20.0 sen), Hong Leong Industries (-18.0 sen) and QL Resources (-18.0 sen).
  • Meanwhile, Dutch Lady (+66.0 sen), United Plantations (+30.0 sen), Adventa (+20.5 sen), Kossan Rubber Industries (+15.0 sen) and Supermax (+13.0 sen) advacned on the broader market. There was only a handful of advancers on the FBM KLCI, namely Top Glove (+27.0 sen), Hartalega (+10.0 sen), Sime Darby (+2.0 sen), Dialog Group (+1.0 sen) and CIMB (+1.0 sen).
  • Asia benchmark indices were in the red as Nikkei (-0.9%) retreated as the potential coronavirus treatment by Gilead Sciences was played down by the World Health Organization. The Hang Seng Index (-0.6%) erased all its’ previous session gains, while the Shanghai Composite (-1.1%) extended its’ losses. Asia stockmarkets, meanwhile, was painted in red on last Friday.
  • U.S. stockmarkets ended the week on a positive note as the Dow (+1.1%) extended its’ gains as crude oil prices continue the recovery phase, coupled with the approval of additional US$500.0 mln stimulus package. On the broader market, the S&P 500 jumped 1.4% higher with all eleven major sectors in the green, while the Nasdaq rallied 1.7% higher.
  • Earlier, European stockmarkets - the FTSE (-1.3%), CAC (-1.3%) and DAX (- 1.7%), all erased their previous session gains as European Union leaders were divided over the size of a financial rescue package to stimulate the region’s economy. At the same time, U.K. retail sales slumped -5.8% Y.o.Y in March 2020 added to the woes.

THE DAY AHEAD

  • It appears that the recent market recovery has taken a stall as profit taking activities took precedence following the Phase 4 of Movement Control Order announcement by the Malaysian Prime Minister. Meanwhile, the World Health Organization’s declared that the Remdesivir drug from Gilead Sciences to treat Covid-19 was ineffective also compounded to the weakness across global equities.
  • As it is, we continue to think that the downward bias consolidation on the FBM KLCI may linger as the key index hovers between the 1,360 and 1,410 levels. A breakout above the consolidation band may power the key index towards the 1,420 and 1,455 levels. However, should the the support level fails to hold, the key index may see further pullback towards the 1,340 level.
  • The recovery in lower liners and broader market shares also took a pause as investors turned cautious on the recent events. The tapering buying sentiment was also evident on the declining trading activities across stocks on Bursa Malaysia for the past three consecutive trading days, suggesting that investors are turning more cautious on the increasingly toppish conditions.

COMPANY BRIEF

  • Maxis Bhd’s 1Q2020 normalised profit after tax fell 10.9% Y.o.Y to RM360.0 mln, mainly due to loss of wholesale business and higher impairment made to receivables as the group revised the expected loss rates in view of the Covid-19 pandemic and its impact on economies worldwide, which has caused a significant increase in credit risk. Revenue for the quarter, however, rose 4.9% Y.o.Y to RM2.34 bln.
  • A first interim dividend of four sen net per share, representing dividend payout ratio of 87% was declared. (The Star)
  • Fraser & Neave Holdings Bhd (F&N) has received the refund of a deposit paid in connection with its proposed acquisition of a piece of land in Perlis following the cancellation of the RM156.0 mln deal. The group will pursue and evaluate other opportunities for its proposed integrated crop and dairy farming project, when such opportunities arise. (The Edge)

    Majuperak Holdings Bhd is proposing to venture into the supply of natural gas and liquefied natural gas (LNG) for power and utilities, cogeneration and district cooling plants. The group’s subsidiary, Majuperak Energy Resources Sdn Bhd (MER), intends to set up a special purpose vehicle-e (SPV) with Petrolife Aero Sdn Bhd, an integrated energy company licensed by the Government to import and distribute LNG and natural gas. MER will own a 51.0% stake in the SPV and Petrolife the remaining 49.0%, under an agreement signed by the two parties. (The Edge)
     
  • Kuala Lumpur Kepong Bhd (KLK) is buying a 60% stake in an Indonesian oil palm company for RM341.6 mln to boost its plantation landbank. The stake in PT Pinang Witmas Sejati is currently held by Ladang Lekir Sdn Bhd, an indirect whollyowned subsidiary of the Perak State Agricultural Development Corporation. The remaining 40.0% equity interest is controlled by PT Trimitra Sumberbuana. (The Edge)
     
  • Cycle & Carriage Bintang Bhd’s (CCB) 1Q2020 net loss widened to RM9.7 mln, from net loss of RM4.4 mln recorded in the previous corresponding quarter, on poor sales owing to the softening demand in the premium luxury segment of the automotive industry. Revenue for the quarter fell 26.4% Y.o.Y to RM215.9 mln. (The Edge)
  • FGV Holdings Bhd (FGV) has widened its scope in the local food industry by producing Bright Cow brand dairy products through its subsidiary, FGV Dairy Farm Sdn Bhd. FGV Dairy Farm can process 800 tonnes of fresh milk per month including production from its 4.0- ha farm located in Linggi, Port Dickson. (The Edge)
  • Berjaya Land Bhd (BLand), controlled by tycoon Tan Sri Vincent Tan, has been accumulating shares in convenience store chain operator 7- Eleven Malaysia Holdings Bhd lately. BLand has so far bought a total of 7.0 mln shares or a 0.6% stake in 7-Eleven Malaysia for month-to-date.
  • As of the latest count, Tan owns a total 47.1% stake in the convenience store chain operator through direct and indirect interests amounting to a total of 542.0 mln shares. (The Edge)

Source: Mplus Research - 27 Apr 2020

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Labels: MAXIS, F&N, MJPERAK, KLK, CCB, FGV, BJLAND, SEM

Related Stocks

Chart Stock Name Last Change Volume 
MAXIS 5.02 -0.10 (1.95%) 1,821,000 
F&N 32.00 -0.10 (0.31%) 69,900 
MJPERAK 0.395 0.00 (0.00%) 108,000 
KLK 23.42 -0.20 (0.85%) 603,200 
CCB 1.56 -0.02 (1.27%) 15,800 
FGV 1.20 0.00 (0.00%) 8,839,100 
BJLAND 0.205 0.00 (0.00%) 640,000 
SEM 1.30 -0.02 (1.52%) 1,752,200 

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