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market pulse
Market Pulse

Spurred by bargain hunting

The FBM KLCI closed with modest gains after paring the morning session losses, but gains were capped by the weakness in index-linked glove counters amid softer glove ASP expectation and market talks over windfall tax on glove companies. Meanwhile, Bank Negara Malaysia (BNM) kept the OPR unchanged at 1.75% and this may suggest that Malaysia’s economic outlook may be neutral to upward bias despite the resurgence of Covid-19 cases as well as the implementation MCO3.0. In the US, however, jobless claims fell more than forecast as market condition improved following the economy reopen. Commodities wise, the copper price rose above USD10,000 while the CPO price surged above RM4,200.

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market pulse
Market Pulse

Bank Negara’s OPR decision in focus

The FBM KLCI declined for the fourth consecutive session due to persistent selling pressure from the foreigners and the broader market may further consolidate as concerns over the expansion of MCO 3.0 to several districts in Johor, Perak and Terengganu, which may dampen the buying interest today. Investors will keep an eye on the overnight policy rate (OPR) announcement by Bank Negara Malaysia (BNM). On a side note, the government has launched a RM3.5bn Jaringan Prihatin stimulus package to subsidise data plan subscriptions and mobile device purchases. Commodities wise, oil prices have been rising, boosted by higher fuel demand amid easing of lockdowns in the US and parts of Europe during summer.

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Stock Digest

Hartalega Holdings Bhd – 5th May 21

While ASPs for the quarter under review is still on the rise, we reckon that the upward trajectory has already hit an inflection point. Still, demand remains relatively robust as it continues to outweigh the current supply. At the same time, the resurgence of Covid-19 cases globally will continue to support the demand over the near term.

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technical focus
Technical Focus

Technical Focus – PESTECH

An international electrical power technology company that offers solutions for High Voltage (HV) and Extra High Voltage (EHV) electrical system with products and services exported to 20 countries across the globe. Outstanding orderbook of RM2.21bn will provide earnings visibility till FY27, supported by 3 concession projects. Aims to venture into the electric vehicle industry, though it is still on the premature stage, particularly in Malaysia market. Technically, traders may anticipate for a breakout above RM1.10, targeting the next resistances at RM1.22-1.28 with long term target set at RM1.43.

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market pulse
Market Pulse

No reprieve yet

The FBM KLCI posted losses for the third consecutive session as upward momentum on glove heavyweights has waned quickly on profit taking in the afternoon session. Tracking the negative performance on overnight Dow, our local exchange is expected to remain subdued on the back of rising Covid-19 cases which led to a tighter MCO implementation on six districts in Selangor. Meanwhile, the technology sector may see further pullback following the overnight decline of Nasdaq in Wall Street. On commodities, Brent oil price has seen a spike near to 2-month high on the back of demand optimism, while lumber futures charged towards all-time-high region.

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market pulse
Market Pulse

Dour trend persists

The FBM KLCI stayed on a downbeat note despite solid expansion of Malaysia’s PMI in April as the key index succumbed to selling in most index components, led by PETDAG and glove heavyweights. The key index is likely to trade in consolidation over the near term as investors’ are still cautious switching among recovery and healthcare-related stocks. Commodities wise, the CPO price jumped around 5.0% to close above the RM4,000 level, while tin futures are at another record high position. On a side note, according to Intel’s CEO, the global chip shortages situation may not resolve anytime soon.

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TradePlus ETF

What’s Trending (3rd May 2021)

The US financial markets continued its upward climb with the support of better than expected financial results, and optimism that the economy may be gradually shifting back into gear after being clouded by virus concerns for more than 1-year. Bond yields also climbed marginally higher towards the end of the month after staying quiet for the earlier part of the month

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Stock Digest

Tuju Setia Bhd – 3rd May 21

Tuju Setia has completed a total of 18 high-rise building construction projects with an aggregate value of RM2.23bn since commencing operations in 2006. We like Tuju Setia for its strong earnings visibility, backed by an outstanding orderbook of RM953.1m and a strong clientele base. We project earnings to grow by 45.2% YoY to RM23.7m in FY21f, mainly due to the resumption of projects execution from the strong outstanding orderbook. Tuju Setia is valued by pegging its FY21f core EPS of 7.5 sen to 11.0x PE (slight premium to peers average of 9.6x), leading to a FV of RM0.82.

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technical focus
Technical Focus

Technical Focus – LUXCHEM

One of the leading industrial chemicals suppliers in Malaysia with over 1,000 types of different products across various grades exported to more than a dozen of countries. Earnings growth will emanate from the acquisition of a 55.0% equity stake in Lexis Chemical, Lexis Specialties and Lexis that comes with a profit guarantee of RM60.0m in net profit over three years till FY23. Healthy balance sheet with a net cash position of RM150.9m in 1QFY21, translating to net cash per share of 15.1 sen (c.16.4% of share price). Technically, the flag-formation breakout above RM0.91 may lift price higher, targeting the next resistances at RM1.01-1.10 with long term target set at RM1.27.

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market pulse
Market Pulse

Struggling above 1,600

In tandem with regional weakness, the FBM KLCI ended the week lower with persistent selling in technology counters on the broader market. Investors are likely to stay cautious as Covid-19 daily confirmed cases remained elevated and may keep an eye on Malaysia’s Markit Manufacturing PMI that will be released today and the Bank Negara Malaysia’s interest rate decision on Thursday. Commodities wise, both the CPO and Brent oil prices have seen a decline. In the US, growth momentum is building in line with higher estimated payrolls and lower unemployment in April on the back of climbing vaccination rate.

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macquarie structured warrants 20200914
Macquarie Warrants

SUPERMX-C1I and MAHSING-C32 among most active

The FBM KLCI started last week on an upbeat note, rising 0.9% to its month-high of 1,623.47 points on Monday (26 April). On Monday, among the big four rubber glove makers, Kossan saw the biggest intraday rally, gaining 6.9% followed by Supermax

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market pulse
Market Pulse

Hovering around 1,600

After recouping all the intraday losses, the FBM KLCI closed with marginal gains of 0.1% and remained above 1,600 psychological level. Meanwhile, we expect the glove heavyweights to resume its rebound move over the near term given the rising Covid-19 infections globally. On the commodities wise, the CPO price staged a pullback after recent rallies, while the oil price climbed above USD68.

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technical focus
Technical Focus

Technical Focus – SALUTE

Engages as a one-stop vertically integrated solutions for electronics and plastic manufacturing industry, supported by notable clientele such as Sony, Canon, Hewlett Packard, Panasonic, Vodafone, Hitachi and Nokia. Focus on the hearing devices segment with development of Bluetooth 5 reduces battery power consumption and improves connectivity range. Healthy balance sheet with a net cash position of RM42.1m in 2QFY21, translating to net cash per share of 10.9 sen (c.18.3% of share price). Technically, traders may anticipate for a short-term resistance breakout above RM0.59 to target the next resistances at RM0.63-0.66 with long term target set at RM0.75.

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market pulse
Market Pulse

Back into consolidation

The FBM KLCI staged a pullback partly dragged by profit taking activities in glove heavyweights following the recent rebound. We expect investors to remain on tenterhooks and focus on sectors with high earning certainties with the interstate travel ban remaining in force while stricter Covid-19 curbs were implemented in more parts of the country. Commodities wise, the CPO price has seen a surge on the back of gains in soybean oil, while Brent oil price has seen a mild spike. Meanwhile, a 10-year O&G services blueprint was launched to push export and R&D.

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market pulse
Market Pulse

Momentum building up

The FBM KLCI extended gains for the third consecutive session, partly powered by the persistent buying interest in glove counters on the back of surging Covid-19 infections in several countries such as India and Brazil. Nevertheless, the upward momentum in glove stocks may be waning once the Covid-19 cases, coupled with the ongoing vaccination programme. Meanwhile, we believe market sentiment may remain cautious ahead of any potential lockdown announcement in the near future.

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technical focus
Technical Focus

Technical Focus – LCTITAN

Regarded as Malaysia’s largest integrated producer of olefins and polyolefins as well as one of the largest polyolefins producers in Southeast Asia. Lotte Chemical Indonesia New Ethylene (LINE) project expansion is largely on track for completion in 2023. Average selling prices (ASP) is expected to improve, on the back of pick-up in commercial demand as well as the uptrend seen in naphtha price amid the recovery in crude oil prices. Technically, a breakout above RM2.79 may lift price to target the next resistances at RM2.95-3.08 with long term target set at RM3.35.

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market pulse
Market Pulse

Rising Covid-19 cases kept gains in check

The FBM KLCI finished the week on a flat note amid tepid market sentiment, but the key index was supported by buying interest in glove counters over the past week. We opine the key index may continue to trend sideways in the holiday-shortened week without significant catalyst in the market. The market may focus on the US’s Federal Reserve interest rates decision to gauge their investing direction. Trading interest may remain robust on small cap and lower liners.

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macquarie structured warrants 20200914
Macquarie Warrants

Gloves, HSI warrants continue to take centre stage

As Covid-19 cases in the country and globally continued to mount, there were renewed interest especially in the rubber glove makers which were hard hit over the first quarter of 2021. Shares of glove makers continued to log impressive gains for a third week in a row with Kossan Rubber Industries and Supermax Corporation leading gains, rallying by 13% and 12.1% respectively for the week.

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technical focus
Technical Focus

Still within consolidation

Positive cues from the regional peers coupled with extended buying momentum in glove heavyweights pushed the FBM KLCI to close above the 1,600 level. While investors may be piling into stocks with higher earnings certainties ahead of the earnings season, market sentiment could remain jittery on the back of higher local daily Covid-19 confirmed cases as well as weak performance on Wall Street overnight. Commodities wise, the CPO price was on firmer footing, trending nearer to the RM4,000 level, while the Brent oil may be heading higher above for the session. Besides, lumber futures are trading around the all-time-high region.

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market pulse
Market Pulse

Dampened by rising Covid-19 cases

The FBM KLCI mirrored the regional weakness to dip below the 1,600 level, but the glove counters finished in the positive region following the release of Kossan’s remarkable results, bucking the market downtrend. However, the sector may see some pullback due to concerns over glove’s ASP on the back of the ongoing Covid-19 vaccination programme. Meanwhile, the CPO prices continue to hover near the RM4,000 level, but positive impact was not reflected on the plantation counters. Tracking the overnight gains on Wall Street, the local bourse may see some mild rebound.

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technical focus
Technical Focus

Technical Focus – MYNEWS

Largest homegrown retail convenience store chain in Malaysia with 542 outlets, supported by 2,000 employees that are currently serving over 6.0m customers on monthly basis. Allocated RM50.0m as capital expenditure to target additional 100 stores under existing four brands in 2021, namely myNEWS, myNEWS SUPERVALUE, WHSmith and CU. Recovery in store sales is largely on track, backed by the higher stores-footfall, coupled with the rising number of stores. Technically, a recovery above RM0.95 may lift price towards the next resistances at RM1.04-1.12 with long term target set at RM1.20.

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market pulse
Market Pulse

Still in consolidation

The FBM KLCI bucked regional downtrend to close higher on the back of bargain hunting activities in selected beaten-down stocks. Although market sentiment may remain tepid tracking the overnight losses on Wall Street, the local bourse may be supported by buying interest in high earning certainty stocks ahead of the earnings season. Meanwhile, the CPO price has seen a surge back above RM3,800/MT following a mild pullback in the previous session.

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market pulse
Market Pulse

Re-visiting 1,600

The FBM KLCI closed lower as market sentiment remained cautious despite the roll-out of the second phase of Covid-19 vaccination. We expect the local bourse to continue its sideways movement on the back of market concerns over inoculation rate coupled with the daily Covid-19 confirmed cases staying above the 2,000 level for the fifth consecutive day. Meanwhile, the technology sector has seen a surge after the announcement regarding Microsoft partnership under the US$1.0bn Bersama Malaysia initiative.

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Uncategorized

Kim Loong Resources Bhd – 19th Apr 21

Kim Loong continues to maintain a healthy tree profile (Immature: 21%, Young Mature: 5%, Prime Mature: 32%, Old Mature: 16% and Pre-replanting: 26%), of which more than 50% of the group’s palm trees will be able to generate sustainable earnings over the foreseeable future.

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technical focus
Technical Focus

Technical Focus – AEMULUS

Engages in the design and development of automated test equipment (ATE) and test and measuring instruments (TMI) for the semiconductor industry. Expansion into the China market through a joint venture with facility at China able to produce own AMB 7600-SR 5G testers and AMB 7300 Radio Frequency filter testers able to cater for China-based RF and 5G-related design in-house demand. Returned to the black over the past 3 quarters with 1QFY21 net profit at RM1.5m on top of revenue at RM11.5m. Technically, traders may anticipate for a breakout above RM0.885 to target the next resistances at RM0.975-1.04 with long term target set at RM1.15.

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