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