M+ Online Research Articles

Mplus Market Pulse - 14 Feb 2023

Publish date: Tue, 14 Feb 2023, 09:02 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my

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Staying afloat

Market Review

Malaysia:. The FBM KLCI (+0.04%) managed to recover all its intraday losses to close in the green, driven by the eleventh-hour buying support in selected banking and telco heavyweights. The lower liners, however, retreated, while technology sector (-1.3%) was the biggest loser among the mixed sectorial peers.  

Global markets:. The US stockmarkets extended their lead as the Dow (+1.1%) advanced ahead of the key inflation data release that is expected to see further easing. The European stockmarkets also turned upbeat, but Asia stockmarkets closed mostly in red.  

The Day Ahead  

Final hour buying support lifted the FBM KLCI into the positive territory amidst bearish regional markets sentiment. With a broad-based rebound on Wall Street overnight, the market could be positioning ahead of the release of the US CPI inflation report, where most of the traders could be anticipating a cooling inflation. Hence, we believe the bullish sentiment is likely to spill over to the regional markets as well as the local bourse especially on the technology sector. Commodities wise, the Brent crude oil traded above USD85, while the CPO price hovered above RM3,900.  

Sector focus:. We remain positive on construction, building material, and renewable energy sectors prior to the re-tabling of Budget 2023. Meanwhile, the technology sector may gain momentum in tandem with the rebound on Wall Street overnight. Besides, the energy sector may extend its gains amidst firm crude oil prices above USD85.

FBMKLCI Technical Outlook

The FBM KLCI eked out narrow gains after recouping all its intraday losses. Technical indicators however remained negative as the MACD Histogram extended a negative bar, while the RSI is hovering below 50. Support is pegged along 1,450- 1,460, while the resistance is set at 1,500-1,510.

Company Brief  

Malaysia Marine and Heavy Engineering Holdings Bhd's wholly owned subsidiary Malaysian Marine and Heavy Engeering Sdn Bhd has secured a contract from Carigali-PTTEP Operating Company Bhd to provide wellhead platforms and subsea pipelines for the Joint Development Area Field Development Project. The contract, which has a value of about RM1.40bn, will run for about 22 months. (The Star)  

Berjaya Food Bhd (BFood)’s 2QFY23 net profit dropped 8.7% YoY to RM35.5m, due to margin compression as a result of higher operating costs. Revenue for the quarter, however, increased 8.3% YoY to RM295.3m. A second interim dividend of 2.0 sen per share payable on 22nd March 2023 was declared. (The Edge)  

Guocoland (Malaysia) Bhd's 2QFY23 net profit jumped 126.9% YoY to RM8.5m, driven by higher share of associates and joint ventures' profit, coupled with wider profit margin in two property development projects in Cheras. Revenue for the quarter, however, dropped 27.2% YoY to RM76.9m. (The Edge)  

Pesona Metro Holdings Bhd has bagged a RM948.1m contract to build a residential development project in Cheras. Under the turnkey construction agreement signed with property developer Danau Lumayan Sdn Bhd, the project is split into 2 phases. The project, which commenced on 13th February 2023, is to be completed within 3 years. (The Edge)  

Tambun Indah Land Bhd’s 4QFY22 net profit fell 57.4% YoY to RM12.2m, due to lower net property sales and fewer ongoing projects, and the group adopted a cautious approach for new property launches given the overall market condition. Revenue for the quarter declined 49.8% YoY to RM53.9m. (The Edge)  

The Employees Provident Fund (EPF) and Kumpulan Wang Persaraan (Diperbadankan) (KWAP) had joined the herd selling MyEG Services Bhd shares last week. The EPF sold 66.0m shares on 8th February 2023, paring its shareholdings in the e-government services provider to 5.3% after it offloaded 49.7m shares the day before. KWAP, on the other hand, sold 1.5m shares on 10th February 2023, reducing its indirect interest to 1.2%. Meanwhile, investors shorted 162.3m shares in MyEG over the past 5 trading days amid a heavy selldown that wiped out RM2.61bn from the company's market capitalisation. (The Edge)  

Muhibbah Engineering (M) Bhd has won a RM172.6m construction contract from Penang Development Corp for a development in the Technoplex industrial area located in Bayan Lepas. The development involves a nine-storey office building and factory, a six-storey parking building with a TNB sub-station and mechanical requirements, and one unit of normal waste depot, office waste depot and recycling room. (The Edge)  

Permodalan Nasional Bhd (PNB)’s unit is selling 2 parcels of freehold lands in Kulai, Johor, spanning 435.2-ha., to Lagenda Properties Bhd’s 70.0%-owned subsidiary for RM398.2m cash. The land purchase, which will be funded by a combination of internally-generated funds and bank borrowings, is expected to be completed by year-end. (The Edge)  

Careplus Group Bhd is disposing of its 50.0% stake in Careplus (M) Sdn Bhd to Ansell Services (Asia) Sdn Bhd for RM37.5m amid the challenging outlook in the glove market due to lower demand and increased competition. In 2020, Ansell had bought the other 50.0% stake from Careplus for RM27.0m. (The Edge)

Source: Mplus Research - 14 Feb 2023

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