Market Review

Malaysia: The FBM KLCI (-0.02%) extended its losses after erasing all its intraday gains, dragged down by the eleventh hour selling pressure in selected index heavyweights such as Petronas Dagangan and IOI. The lower liners staged a mild recovery, while the broader market finished mostly lower yesterday.

Global markets: US stockmarkets extended their gains to all-time highs as the Dow added 0.8% on the Inauguration Day of Joe Biden that will speed up the progress of US$1.9tn economic stimulus package. European stockmarkets were upbeat, while Asia stockmarkets finished mostly higher.

The Day Ahead

Tracking the strong gains on Wall Street overnight after Joe Biden was sworn in as the 46th US president, we expect rebound could be seen on the local front especially on the technology sector. Nevertheless, market volatility remains in place amid the expansion of MCO to all states except for Sarawak due to the worsening of the Covid-19 situation. On the banking sector, we expect trading interest will be seen after BNM’s move to keep the interest rate unchanged until the next meeting. Meanwhile, we expect the vaccine rollout plan that could come in 1Q21 may benefit the distribution segment.

Sector focus: Given the above setup, investors may lookout for stocks within technology sector amid the rally in global tech stocks, coupled with the chip shortages narrative. Meanwhile, furniture and packaging industry may be traded actively as orders are packed at least for the near term and cold chain logistics may be focused ahead of the upcoming vaccine rollout plan.

FBMKLCI Technical Outlook

The FBM KLCI managed to hold above the psychological level at 1,600 albeit selling pressure was noticed in the final trading hour. The key index is expected to move sideways with support level pegged at 1,570-1,590, and resistance level at 1,620-1,640. Indicators remained negative for the third straight trading session as the MACD Histogram has extended another red bar, while the RSI remains below 50.

Company Brief

Unisem (M) Bhd has priced the last tranche of its new shares to be placed out at near record high, as global shortage of electronic chips fuelled investors' demand for semiconductor stocks. The issue price of the remaining 21.1m Unisem shares has been set at RM7.70 each. This was a 7.1% premium compared with the fiveday volume weighted average market price up to 19th January 2021 of RM7.19 a share. Proceeds from the fund raising exercise will be used to expand the group factories in Ipoh, Perak and in Chengdu, China. (The Star)

Widad Group Bhd’s major stakeholder Widad Business Group Sdn Bhd will be developing a high-impact project in Langkawi with an estimated gross development value (GDV) of about RM40.0bn over the next 15 to 20 years. Kedah Menteri Besar Muhammad Sanusi Md Nor has reported that the project consists of tourism-related components such as five-star hotels and resorts, as well as residences and healthcare facilities. (Bernama)

Zhulian Corp Bhd’s 4QFY20 net profit rose 48.9% YoY to RM13.6m, thanks to higher revenue. Revenue for the quarter increased 11.5% YoY to RM43.6m. A fourth interim dividend of three sen per share, as well as a special dividend of five sen per share, amounting to a total of eight sen, payable on 10th March 2021 was declared. (The Edge)

Tenaga Nasional Bhd (TNB) reported that 10,768 of its commercial customers who had previously received a 15.0% discount under the Penjana economic stimulus package are automatically eligible for the 10.0% discount under the new Permai package. (The Edge)

Hibiscus Petroleum Bhd has announced that the UK Oil and Gas Authority (OGA) had on 19th January advised that two of the three licence agreements pursuant to the OGA’s offer for award received by Hibiscus’ indirect wholly-owned subsidiary Anasuria Hibiscus UK Ltd have been fully executed. The licence agreement for the third offer is in the process of being fully executed. (The Edge)

Axis REIT’s 4QFY20 net property income (NPI) rose 8.3% YoY to RM51.1m, thanks to higher revenue or total trust income. Revenue for the quarter added 3.9% YoY to RM191.7m. A final distribution per unit (DPU) of 2.25 sen will be paid on 11th March 2021. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) is looking at several options in airport investments under the new operating agreement (OA) that it is currently negotiating with the Government, including the option of self-funding, supported by profit guarantees from the Government. The airport operator is allocating RM400.0m in capital expenditure in 2021, which will partly be used to upgrade its baggage handling system (BHS), to replace its aerotrains at the KLIA and for facial recognition implementation. (The Edge)

The Federal Land Development Authority (Felda) has bought 10.0m more shares in FGV Holdings Bhd from the open market for RM13.0m. This raised the number of FGV shares acquired by Felda so far this week to 51.0m shares. (The Edge)

INIX Technologies Holdings Bhd is taking legal action against The Edge on the article entitled “INIX Technologies application to supply Covid-19 vaccines yet to be received by NPRA”. The company reported that the article published was a misleading and damaging statement. (The Edge)

YTL Corp Bhd has reportedly submitted its planning application to local councils for a new development called the Hangout, a pop-up village which offers tipi-style restaurants, temporary retail and entertainment space in Bristol, the UK. The development covers an 8.3-ac. site at the north-east of the former airfield in Filton. (The Edge)

Maybank Investment Bank (Maybank IB) has issued new European-style noncollateralised cash settled put warrants over the ordinary shares of Public Bank Bhd with an issue size of 100.0m warrants. The put warrants' issue price is set at 15 sen, on the basis of 30 put warrants for one Public Bank share. (The Edge)

Cymao Holdings Bhd's unit has secured a subcontract worth RM134.0m for a proposed mixed development project at Wilayah Sungai Kelian Baru, Mukim Batang Padang in Perak. Its wholly-owned subsidiary bn Apex Sdn Bhd today accepted a letter of award from HYC Properties Sdn Bhd for site clearance, hoarding and earthworks for the proposed project. (The Edge)

Source: Mplus Research - 21 Jan 2021