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Author: MalaccaSecurities   |   Latest post: Tue, 11 May 2021, 8:47 AM


Mplus Market Pulse - 4 Mar 2021

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Market Review

Malaysia: The FBM KLCI (+1.2%) delivered a sturdy performance to extend its gains, largely boosted by bargain hunting activities in gloves heavyweights. The lower liners also rebounded, while the broader market ended finished mostly higher, anchored by the healthcare sector (+2.6%).

Global markets: The US stockmarkets extended their losses as the Dow (-0.4%) fell into the negative territory in the final trading hour as selloff in technology stocks intensified to overshadow the gains in banking stocks after the 10Y Treasury yield rose towards near 1.5%; Nasdaq plunged 2.7%. Both the European and Asia stockmarkets ended on a positive tone.

The Day Ahead

Bargain hunting activities emerged on the glove counters after more than one week of pullback, lifting the FBM KLCI and the healthcare sector higher. Market will be looking forward to the second Monetary Policy Committee meeting today to gauge market movements. However, economists anticipate an unchanged stance on the Overnight Policy Rate (OPR) amid expectation of an economic recovery. We believe the lower liners will continue to remain upbeat if the positive market sentiment persists. Meanwhile, the Brent oil price has seen a rebound.

Sector focus: Given the daily Covid-19 confirmed cases remained below 2,000 for the third straight day, we believe the traders will focus on recovery-theme sectors such as aviation, consumer products and gaming. Besides, traders may look out for oil & gas and plantation counters given the rebound in commodities prices.

The FBM KLCI advanced and closed slightly above the EMA 120 level. Technical indicators have turned slightly positive with the MACD Histogram extending another green bar, while the RSI crossed above 50. We expect the key index to move within the sideways drift, with the support level pegged at 1,560 and resistance is envisaged around 1,600-1,620 over the near term.

Company Brief

Yinson Holdings Bhd’s 80% owned Rising Sun Energy (K) Pvt Ltd (RSEK) has secured the letter of award to develop 190.0MW grid-connected solar photovoltaic power project in Rajasthan, India. The Power Purchase Agreement (PPA) is to supply 25 years of solar power generated electricity to NTPC Ltd. The contract was estimated to be valued at RM1.50bn and is scheduled to commence in April 2022. (The Star)

Datasonic Group Bhd has teamed up with a partner in Vietnam to target electronic passport and other ICT projects. The company has entered into a teaming agreement with Pham Gia Ecocon Plus Vietnam Co Ltd to work together in proposing the e-Passport and/or other ICT projects to the Ministry of Public Security in Vietnam. The agreement is for a period of five years. (The Star)

MyEG Services Bhd’s 4QFY21 net profit rose 6.7% YoY to RM75.5m, boosted by revenue from Covid-19 health screenings, and online motorcycle insurance and road tax renewal service. Revenue for the quarter increased 10.1% YoY to RM149.9m. A final dividend of 1.7 sen per share was proposed. (The Edge)

Genting Malaysia Bhd’s senior management team has taken a temporary voluntary 20.0% salary cut for three months, and the company has written to staff for them to consider a variation in their employment contract, with a suggested variation staggered depending on job grade, from 15.0-20.0% reduction in salary or one day no pay leave per week. (The Edge)

Vivocom Inernational Holdings Bhd has proposed a private placement to raise gross proceeds of up to M99.4m, paired with one-for-three bonus warrants. The placement size represents 10.0% of its total issued shares, and will be offered to third party investors to be identified later. The placement shares may be issued based on a discount of up to 10.0% to the five-day volume-weighted average market price of Vivocom shares immediately preceding the price-fixing date. (The Edge)

MISC Bhd has completed its maiden ethane cargo delivery, which is also the largest to-date in the history of ethane shipping at over 51,000 tonnes. Its first very large ethane carrier (VLEC) Seri Everest has completed the cargo discharge at Lianyungang port, Jiangsu province, China on 28th February 2021. (The Edge)

Jaycorp Bhd has announced it has voluntarily decided to halt operations at its 60.0%-owned joint-venture company Honsoar Jaycorp Cabinetry Sdn Bhd for 10 days for sanitisation purposes. This was after 28 employees were tested positive for Covid-19, from 137 employees screened in Kawasan Perindustrian Sri Gading, Batu Pahat, Johor. (The Edge)

Nexgram Holdings Bhd has proposed to cancel RM142.6m of its issued share capital, in a move to reduce the group’s accumulated losses. The exercise will enable it to reduce its accumulated losses via cancellation of the share capital which is lost or unpresented by available assets of the group. (The Edge)

Greatech Technology Bhd is erecting a second factory building at Batu Kawan Industrial Park to relocate its Kedah manufacturing and assembly operations to a single location at Batu Kawan Industrial Park in Penang. Its wholly-owned subsidiary Greatech Integration (M) Sdn Bhd has awarded the letter of award for the construction of the main building works today. (The Edge)

Minetech Resources Bhd has registered as a solar photovoltaic (PV) investor with Sustainable Energy Development Authority Malaysia under the Net-Energy Metering (NEM 3.0) Programme. As a registered PV investor, the group is now allowed to sell electricity via the renewable power purchase agreement under the NEM 3.0 programme to government agencies, businesses and individuals. (The Edge)

Source: Mplus Research - 4 Mar 2021

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