Good Morning, Folks. If you’re tired of starting over, then you need to learn to stick through and overcome difficult things instead of running away from them.
Justin Timberlake, Carey Mulligan, Stark Sands – 500 Miles (Inside Llewyn Davis OST)
Knowing your risk tolerance level will help you to choose the right investments and avoid panicking during an economic downturn.
The Script – The Man Who Can’t be Moved
If your reason is mistrust, it’s important to remember that the market is cyclical and stocks going down is inevitable, but a downturn is temporary. It’s wiser to think long term, instead of panic selling when stock prices are at their lows.
STAR (Jan 22) KUALA LUMPUR: AirAsia Group Bhd, Green Packet Bhd, Dagang Nexchange Bhd (DNeX), Pantech Group Holdings Bhd, CIMB Group Holdings Bhd and Bintai Kinden Corp Bhd are among the stocks to watch on Friday, according to JF Apex Research.
AirAsia is proposing to issue up to 668.39 million new shares or 20% of its current share capital for private placement to raise RM454.51mil. The proposed sum is based on an indicative price of 68 sen per share.
A tech fund promoted by Green Packet is funding the majority shareholders of Nuglobal Ventures Sdn Bhd which is keen on taking over Khazanah Nasional Bhd’s semiconductor fabricating company SilTerra Malaysia Sdn Bhd.
DNeX clarified that it has not entered into any definitive agreement to acquire Khazanah Nasional Bhd’s semiconductor fabricating company SilTerra Malaysia Sdn Bhd.
It said the company nevertheless is constantly evaluating various proposals to grow its business organically or through acquisitions including that of SilTerra.
UOA REIT’s net rental income for the fourth quarter ended Dec 31, 2020 fell 10.81% year-on-year no thanks to rental rebates given to eligible tenants.
Pantech said its third-quarter net profit fell 14.8% yoy as revenue dropped partly due to a decrease in sales of the company’s products to O&G customers at a time when the industry contended with the impact of the Covid-19 pandemic.
CIMB’s 94.8%-owned subsidiary CIMB Thai Bank PCL saw its net profit for FY20 decline 36% year-on-year mainly due to increase in provisions and an expected credit loss.
Bintai Kinden announced that it intends to diversify into property development and management as a strategy to reduce its “reliance solely on the mechanical and electrical (M&E) engineering business”.
On top of that, the company is also proposing a private placement exercise to raise fresh capital of RM58.43mil to fund the new venture.
Meanwhile, US markets were flat overnight amid corporate earnings and investors looking forward to President Joe Biden’s stimulus plan.
Earlier, European stocks declined after the European Central Bank kept interest rates unchanged.
“Following the mixed performances in the US and Europe, the FBM KLCI could remain lacklustre and test the support of 1,590 points,” JF Apex said.
TESSA’s Current Portfolio : HIBISCUS, PUNCAK, QES, MEDIA.
Stay Home When Possible, Stay Safe & Protect Others. Stay at least 6 feet away from others if you must go out.
Stay Healthy. Stay physically fit. Exercise regularly.
It’s not a lie, if everyone understands and knows what it means.
Zhulian, TNB, Hibiscus, Axis REIT, MAHB, AirAsia, Widad, YTL Corp, FGV, INIX, Public Bank and Cymao
EDGE KUALA LUMPUR (Jan 20): Based on corporate announcements and news flow today, stocks that may be in focus on Thursday (Jan 21) include Zhulian Corp Bhd, Tenaga Nasional Bhd, Hibiscus Petroleum Bhd, Axis REIT, Malaysia Airports Holdings Bhd, AirAsia Group Bhd, Widad Group Bhd, YTL Corp Bhd, FGV Holdings Bhd, INIX Technologies Bhd, Public Bank Bhd and Cymao Holdings Bhd
Zhulian Corp Bhd’s net profit rose 49% to RM13.55 million for the fourth quarter ended Nov 30, 2020, from RM9.1 million a year earlier, thanks to higher revenue. Earnings per share climbed to 2.95 sen from 1.98 sen. Revenue for the quarter increased 11.46% to RM43.6 million from RM39.12 million previously. With better earnings in the quarter, the group declared 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, which will be paid on March 10. It had declared six sen in the same period last year.
Tenaga Nasional Bhd (TNB) said 10,768 of its commercial customers who had previously received a 15% discount under the Penjana economic stimulus package are automatically eligible for the 10% discount under the new Permai package. The 10,768 customers are from six sectors that have been severely affected due to the Covid-19 pandemic, namely hotel operators, theme parks, convention centres, shopping malls, local airline offices, as well as travel and tour agencies.
Mandy Moore – Moonshadow
Hibiscus Petroleum Bhd said the UK Oil and Gas Authority (OGA) had yesterday (Jan 19) 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. Hibiscus said the licence agreement for the third offer is in the process of being fully executed.
Axis REIT saw its net property income (NPI) for the fourth quarter ended Dec 31, 2020 rise 8.31% to RM51.11 million from RM47.19 million a year earlier, thanks to higher revenue or total trust income. Axis REIT declared a final distribution per unit (DPU) of 2.25 sen, including a non-taxable portion of 1.42 sen, which will be paid on March 11. This brings the total DPU for FY20 to 8.75 sen from 9.26 sen in FY19.
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.
Speaking at a virtual media briefing today, the airport operator’s group CEO Datuk Mohd Shukrie Mohd Salleh said MAHB is looking at a model where the Government will not have to provide funds for the expansion and upgrading of profitable airports.
At the same time, he said its turnaround will depend on how early Malaysia opens its international borders. The airport operator is allocating RM400 million in capital expenditure this year, which will partly be used to upgrade its baggage handling system (BHS), to replace its aerotrains at the KLIA and for facial recognition implementation.
“Delay [Airbus aircraft orders] more than cancel.” The statement by AirAsia Group Bhd group CEO Tan Sri Tony Fernandes may have encapsulated the budget airline’s sentiment on its long-term business ties with aircraft manufacturer Airbus at a time when global Covid-19 pandemic-driven restricted movement policies have negatively impacted the aviation sector. Fernandes said during a live interview with CNN yesterday that from AirAsia Group’s standpoint, the company was expected to end up taking the airplanes, which it ordered from Airbus. “We are not cancelling any orders at the moment,” he said
Widad Group Bhd’s major stakeholder Widad Business Group Sdn Bhd, an integrated facility management, property and construction conglomerate, is planning to build a mixed development project in Pulau Langkawi with an estimated gross development value of RM40 billion. The group said the project, dubbed Widad@Langkasuka , is expected to be completed within 15 to 20 years.
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. According to a report by the Bristol Post, the group, through YTL Corp Bhd’s wholly-owned YTL Developments (UK) Ltd, plans to create a pop-up village which covers an 8.3-acre site at the north-east of the former airfield in Filton.
The Federal Land Development Authority (Felda) has bought 10 million more shares in FGV Holdings Bhd from the open market for RM13 million. FGV said the shares were purchased yesterday at RM1.30 per share. This raised the number of FGV shares acquired by Felda so far this week to 51 million shares. On Monday, the agency bought 41 million shares via the open market for RM53.3 million or RM1.30 each.
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 said that the article published today was a misleading and damaging statement.
Maybank Investment Bank (Maybank IB) has issued new European-style non-collateralised cash settled put warrants over the ordinary shares of Public Bank Bhd with an issue size of 100 million warrants. The put warrants’ issue price is set at 15 sen, on the basis of 30 put warrants for one Public Bank share. The listing of the put warrants is scheduled to be Jan 21, and the expiry date is set to be Nov 30. It has set an exercise price of RM18.0 Total gross proceeds of up to RM15 million is expected to be raised from the offer.
Cymao Holdings Bhd‘s unit has secured a subcontract worth RM134.02 million for a proposed mixed development project at Wilayah Sungai Kelian Baru, Mukim Batang Padang in Perak. Its wholly-owned subsidiary Billion Apex Sdn Bhd today accepted a letter of award from HYC Properties Sdn Bhd for site clearance, hoarding and earthworks for the proposed project.
Malaysian Medical Association (MMA) president Prof Datuk Dr M. Subramaniam stressed that the MCO will need time to be effective. “The Health Ministry hopes the situation will improve in four weeks. Restrictions under the MCO such as barring interstate and interdistrict travel, dining-in restrictions and work from home measures will over time, bring down the infectivity rate as there will be reduced people at workplaces, major towns and cities,” he said in a statement to Malay Mail. He also said the MCO was necessary as the basic reproduction number (R0) of Covid-19 infections was between 1.1 and 1.2 at the start of the lockdown.
Calculations of adjusted price of JFTech (0146) Note that the warrants are included in the calculations as the exercise price of RM1.16 is in-the-money. (1 x RM6.79, original share) + (2 x RM1.16, warrants exercise) = RM9.11 Divide this by 6 (1 original + 3 bonus + 2 warrants exercised into ordinary shares) RM9.11 / 6 = RM1.5183 = RM1.51 (round down)
Trade at your own risk. TESSA ONLY PROVIDE INFORMATION. No Investment Recommendations or Professional Advice. Nothing on this blog should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or product.
KIP REIT, Sentral REIT, Hai-O, T7, Bioalpha, Menang, Asia Media, Karyon, Boustead, i-Stone, F&N, FGV and Jade Marvel
EDGE KUALA LUMPUR (Jan 19): Based on corporate announcements and news flow today, stocks that may be in focus on Wednesday (Jan 20) include KIP REIT, Sentral REIT, Hai-O Enterprise Bhd, T7 Global Bhd, Bioalpha Holdings Bhd, Menang Corp (M) Bhd, Asia Media Group Bhd, Karyon Industries Bhd, Boustead Holdings Bhd, i-Stone Group Bhd, Fraser & Neave Holdings Bhd, FGV Holdings Bhd and Jade Marvel Group Bhd.
KIP REIT has reported a 5.7% drop in net property income (NPI) for its second quarter ended Dec 31, 2020 to RM13.9 million, from RM14.73 million a year ago, as the trust continues to be affected by the movement control order (MCO). KIP REIT said recognition of the amortisation of rental rebates of RM500,000 offered to eligible tenants affected by the MCO enforced in the second quarter of 2020 led to a slight dip in its earnings. Net profit fell 6.2% to RM8.66 million from RM9.23 million a year ago, as revenue fell 5.65% to RM18.62 million versus RM19.73 million previously. It has declared a second interim distribution per unit (DPU) of 1.59 sen, amounting to RM8.03 million. Payment of the DPU will be made on Feb 19.
Sentral REIT saw its NPI slip 2.4% to RM29.44 million in the fourth quarter ended Dec 31, 2020, from RM30.15 million a year ago, due to lower revenue and higher unrealised rental income. Revenue fell 2.9% to RM39.46 million from RM40.62 million. The lower revenue was mainly due to “the adjustments on the unrealised revenue on unbilled lease income receivable pursuant to requirements of MFRS 16 Leases, recognised on a straight-line basis over the lease terms”. The REIT’s unrealised rental income for the quarter stood at RM2.35 million, compared with RM1.36 million a year earlier. Its distributable income stood at RM20.61 million, with distributable income per unit at 1.92 sen, compared with RM18.61 million and 1.74 sen respectively in the prior year. The group declared a final DPU of 3.65 sen, payable on Feb 26.
Hai-O Enterprise Bhd has proposed a share exchange with BesHom Holdings Bhd, which will also take over the group’s listing status. Hai-O said the exercise will see its entire 300.3 million shares exchanged with BesHom shares on a one-for-one basis. Upon the completion of the share exchange, BesHom will become the new holding company of the group. It will also assume the listing status of Hai-O on the Main Market of Bursa Securities, and Hai-O will be delisted.
T7 Global Bhd has won a contract extension from Petronas Carigali Sdn Bhd to provide underwater inspection services using a mini remotely operated vehicle. The contract was first awarded in August 2019, for a one year duration until Sept 2, 2020. It has now been extended to May 31, 2021.
Bioalpha Holdings Bhd has proposed to undertake a rights issue of up to 83.34 million new shares and up to 208.34 million new irredeemable convertible preference shares (ICPS) to raise funds primarily for the group’s working capital requirements. The health-supplement manufacturer said the company’s fundraising plans include a private placement of 290 million new ICPS in the group, where Khazanah Nasional Bhd’s wholly-owned unit Malaysian Technology Development Corp (MTDC) is a major shareholder. The rights issue of up to 83.34 million new shares will be undertaken on the basis of one rights share for every 15 existing shares held while the rights issue of up to 208.34 million new ICPS will be implemented on the basis of one rights ICPS for every six existing Bioalpha shares held.
Two of Menang Corp (M) Bhd‘s shareholders holding a collective 13.29% stake in the property developer have requisitioned an EGM to be convened to remove four existing directors and appoint two new ones. Menang said Datuk Lee Chin Hwa and Nicholas Pun Chee Cheang, who hold 8.31% and 4.98% of the group’s shares respectively, are seeking to remove group executive chairman Raja Shahruddin Rashid, non-independent non-executive director Dr Christopher Shun Kong Leng, independent non-executive directors Wong Koon Wai and Sivagurunathan Narayanasamy, as well as any other persons that might have been appointed by the board of directors between now and the holding of the EGM. At the same time, they are seeking to appoint Yee Chun Lin and Chee Wai Hong to the board.
Asia Media Group Bhd expects its newly-appointed legal advisers and other professionals to take three to four months to complete investigations linked to losses in the group. The group said in response to queries from Bursa Malaysia on its announcement dated Jan 15 relating to the appointment of the legal firm of Krish Maniam & Co to investigate “the possibility of losses caused by certain individuals with decision-making powers, prior to the present board of directors’ entry”. According to Asia Media, the inspection is essentially linked to the write-downs and depreciation of the group’s assets and its whereabouts, that directly or indirectly led to the current impairment and write-downs. Asked by Bursa to quantify the write-downs and depreciation amount, Asia Media said: “Our initial estimated losses are to the tune of RM103,198,076.00 in impairment losses.
Four employees at Karyon Industries Bhd‘s wholly-owned plastic additives and industrial chemicals unit have tested positive for Covid-19.In a bourse filing, the group said the four production workers employed at Allbright Industries (M) Sdn Bhd had tested positive.The workers are currently receiving medical treatment at designated government facilities, as directed by the Ministry of Health, it noted.
Boustead Holdings Bhd said it will not be able to comment at this juncture on a media report by The Edge yesterday on the intention of Lembaga Tabung Angkatan Tentera (LTAT) to privatise the groupvia selective capital reduction and repayment.
i-Stone Group Bhd’s subsidiaries PA Metal Technics Sdn Bhd (PAMT) and i-Stone Engineering Sdn Bhd (IEN) have been given the green light by the Ministry of Health to resume operations after the balance of its employees tested negative for Covid-19. The automisation machine manufacturing group said the rest of its employees working at IEN and PAMT in Johor Bahru were screened for the virus.
Fraser & Neave Holdings Bhd (F&N) is set to establish halal food as the cornerstone of its growth, following its acquisition of Sri Nona companies for RM60 million, which was announced in December last year, besides exploring ways to reimagine its business through organic growth and business synergies to ensure a more sustainable future. Sri Nona is best known for its flagship product, the NONA Ketupat (rice cakes) range, which is the number one ketupat brand in Malaysia, and its range of oyster sauce, which is among the top three in its category.
The Felda Land Development Authority (Felda bought 41 million shares in FGV Holdings Bhd from the open market for RM53.3 million. FGV said the shares were purchased at RM1.30 per share yesterday. On Jan 14, Felda bought 22 million FGV shares from the open market for RM28.38 million.
Jade Marvel Group Bhd said the group and JSC Land Sdn Bhd have mutually agreed to terminate their joint venture agreement (JVA) to develop a project in mainland Penang. Jade Marvel, through its unit Great Marvel Sdn Bhd (GMSB), will instead complete the development on its own. Jade Marvel on Sept 21 last year announced its JVA with JSC to develop a housing project with a gross development value of RM25 million on a 3.23-acre freehold land owned by the former in Simpang Ampat, Seberang Perai Selatan.
There are moments on most days when I feel a deep and sincere gratitude, when I sit at the open window, and there is a blue sky or moving clouds.
Ane Brun – To Let Myself Go
Two of Menang Corp (M) Bhd‘s shareholders have commenced a court action against the company and its chairman Raja Shahruddin Rashid. The group did not state why the action was initiated by the two shareholders, Toh May Fook and Liew Sook Pin.
Kelington Group Bhd has said it clinched several new contracts totalling RM118 million during the fourth quarter of 2020. The integrated engineering solutions provider said the new contract wins lifted the group’s total new orders in financial year 2020 to RM490 million. This marked a new all-time high of new orders secured, surpassing the previous year’s record of RM386 million.
EcoFirst Consolidated Bhd is buying seven parcels of land in Sungai Buloh for a combined RM70 million. The land parcels are intended to be developed into a mixed development project with an estimated gross development value of more than RM550 million, which is slated to commence by the end of this year.
Serba Dinamik Holdings Bhd has won US$135.8 million (RM548.2 million) worth of contracts, including eight operations and maintenance (O&M) jobs won by its 75%-owned subsidiary PT Serba Dinamik Indonesia in Indonesia. Additionally, its India-based wholly-owned unit SDIT International Ltd has secured an ICT contract in India. Meanwhile, its local wholly-owned unit Serba Dinamik Sdn Bhd has secured an O&M contract and one engineering, procurement, construction and commissioning contract in Malaysia. However, the two contracts have no specific values affixed as they are on a “call-out” basis, where work orders will be issued as and when needed.
UEM Sunrise Bhd has appointed Sufian Abdullah to the post of chief executive officer, which has been left vacant for some four months after the departure of Anwar Syahrin Abdul Ajib. The group said the appointment of Sufian, 46, would take effect on Feb 2.
GHL Systems Bhd has expanded its service offerings to include vehicle insurance and road tax renewal services following a tie-up with Loanstreet. GHL said its services enable end-to-end road tax and insurance delivery services right to the consumers’ doorsteps for a quick and hassle-free process.
Genetec Technology Bhd said today the manufacturing systems specialist is not aware of any rumour or report concerning the group’s business and affairs that might have accounted for the company’s share trade activity, which saw the stock’s price hit limit up while volume registered a ninefold spike. Genetec said there is no corporate development in relation to the group’s business and affairs that has not been previously announced including those in the stage of discussion, which might have accounted for Genetec’s share trade activity which saw its share price rise as much as 60 sen or about 30% to RM2.63 today.
Ecobuilt Holdings Bhd has secured a RM166.37 million contract to undertake a mixed commercial development project in Kota Kinabalu, Sabah. The group’s wholly-owned subsidiary E&J Builders Sdn Bhd has been appointed the main contractor for the project by Golden Wave Sdn Bhd.
Lii Hen Industries Bhd has estimated that capacity loss arising from the temporary closure of operations of its subsidiaries due to Covid-19 will increase to 4.6% from 3.5% of the total estimated annual output volume for the financial year under review. Lii Hen said the affected facilities will resume operations in stages.
Twenty-two Covid-19 cases have been found among migrant worker tenants staying at AME Elite Consortium Bhd‘s worker dormitories in Kulai and Senai, Johor.
SCGM Bhd announced today its subsidiary Lee Soon Seng Plastic Industries Sdn Bhd (LSSPI) received notification last Saturday that two of its production floor workers tested positive for Covid-19 in a routine test. SCGM said this resulted in a mass screening exercise being carried out for all LSSPI employees.
Parkson Holdings Bhd said Parkson Vietnam Co Ltd (PVC) has received a letter from its landlord in Vietnam alleging, among others, that PVC Is required to pay a total amount of VND66.2 billion (RM12 million) to the landlord for unpaid and outstanding rental and late-payment charges. This is for the period of April 15, 2019 to Jan 14, 2021 and compensation for early termination of the lease.
Top Glove Corp Bhd has refuted claims by the Canadian Broadcasting Corp over alleged unsuitable working conditions at its factories. The rubber glove manufacturer said the allegations raised in the report and the way in which they were presented were misleading and damaging on the basis that they suggested a breach in existing policies that it currently has in place.
SKP Resources Bhd expects 3% of its sales revenue for the financial year ending March 31, 2021 to be impacted by the temporary closure of its Johor Bahru operations. It said the temporary shutdown is expected to lead to some delays in its delivery schedule for two weeks.
Household appliance manufacturer Milux Corp Bhd has proposed a bonus issue of up to 176.29 million shares on the basis of three bonus shares for every one share held. The group said upon completion of the bonus issue, Milux’s issued share capital would rise to 235.06 million shares from the current 58.76 million shares. The value of the share capital will remain at RM59.07 million. – EDGE (Jan 18)
Trade at your own risk. No Investment Recommendations or Professional Advice. Nothing on this blog should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or product.
You know what, Monday blues are an interesting phenomenon. Even though you experience it, you do not try to find a cure for it. You accept it like diabetes. It is not a feeling you like, but you know neither will you be cured nor will it kill you.
Foreign buying on Bursa at RM326.06m last week
SUNBIZ (Jan 18) PETALING JAYA: Foreign investor was net buyer last week with inflow amounting to RM326.06 million, according to MIDF Research.
As market reopened on Monday last week, foreign investors bought RM87.85 million net of local equities, with retailers and local institutions as net buyers and net sellers to the tune of RM1.59 million and RM89.45 million respectively.
“Contrary to expectation, emergency declaration by Prime Minister last week did not spark mass exodus of foreign investors from our equity market. Foreign investors were net buyers every day during last week. Largest foreign inflow was recorded on Wednesday at RM127.24 million at the smallest inflow was on Friday at only RM3.69 million,“ MIDF said in its fund flow report today.
It was opposite for local institutions. Local institutions were net sellers every day for last week. Largest net selling was recorded on Tuesday at RM103.43 million and smallest net outflow was on Thursday at RM12.28 million.
Retailers were buyers except on Wednesday. Despite the net buying activities, overall daily inflows were small and recorded below RM7.0 million except on Friday. The largest net inflow was on Friday and smallest on Tuesday, to the tune of RM67.56 million and RM1.50 million respectively.
Overall, for third week of 2021, retailers are the only net buyers at RM735.89 million while local institutions and foreign investors were net sellers at RM724.94 million and RM10.96 million.
“In comparison to another three South East Asian markets that we tracked last week; Thailand, Indonesia and Malaysia recorded foreign net inflow Philippines experienced the only net outflow.”
In terms of participation, the retail investors recorded a weekly decrease of 3.63% in average daily trade value (ADTV) while the foreign investors and local institutions experienced declines in ADTV of 4.89% and 18.08% respectively.
Anson Seabra – Walked Through Hell
RHB Technical Analyzer
18 January 2021
FKLI & FCPO: FKLI: Mild Pullback For Consolidation
Maintain long positions. After hitting into a wall of resistance, the FKLI retraced 6 pts to settle at 1,631 pts last Friday. During the latest session, the index gapped 2 pts lower to open at 1,635 pts, and fell to the day’s low of 1,625.50 pts. Buying interest emerged near the day’s low, lifting the index towards the day’s high of 1,640.50 pts. However, selling pressure resurfaced as the index retraced towards the day’s low for the rest of the session, ending the day at 1,631 pts. We foresee the index consolidating between the sideway zone ie the resistance of 1,650 pts and support of 1,603.5 pts. Expect the daily average trading range to contract during consolidation or volatility tapering. A breakout of either threshold will see a new trend forming with volatility increasing. Since the index is trading above the 50-day SMA line, we maintain a positive trading bias.
CONSIDERING that 2020 had been a tumultuous year economically, financially, socially and politically to many citizens of the world, the FBM KLCI had fared reasonably well to end the year 2.42% higher at 1,627.21 points (2019: 1,588.76 points).
As to how 2021 will pan out for investors – in particular, minority shareholders – below are eight trends to expect and to take cognisance of in the year of the “metal Ox”:
More diversifications into healthcare, glove and personal protective equipment (PPE) sector
Judging from the previous year’s experience, all the wannabes (majority of which are penny stocks) into these three areas did experience a sharp run-up in their share prices after their announcements.
But often, the joy for investors was short-lived as their share prices tended to normalise to current level. The reason behind this phenomenon is definitely food for thought for investors.
As pointed out in our newsletter last week, success boils down upon (i) the business segment and gestation period; (ii) the financial muscle; and (iii) the reputation of the board/management.
A rise in ESG awareness
This is an alarm bell for public listed companies (PLCs) in the labour-intensive industries, notably the manufacturing (glove making), plantation and construction/property development sectors.
The environment, social and corporate governance (ESG) yardstick will increasingly become a pre-requisite for foreign funds and institutional investors when they park their funds in a particular PLC regardless of how profitable the company is.
In Malaysia, ESG adoption began emerging prominently in 2018 when some of the country’s largest asset owners, namely the Employees Provident Fund, Kumpulan Wang Persaraan (Diperbadankan) and Khazanah Nasional Bhd became signatories of the UN Principles for Responsible Investment, thus demonstrating their commitment to responsible investments.
Lower dividend pay-out
Investors who dabble in blue-chip/defensive counters hoping to reap handsome dividends which are well above the existing fixed deposit rate may be slightly disappointed.
Many PLCs – notably banks and other high dividend yielding consumer sector stocks – are still recovering from the aftermath of last year’s movement control order (MCO) which has adversely impacted their performance for at least two financial quarters.
Having to factor in the uncertainties of COVID-19 pandemic, many PLCs may choose to conserve cash by being less generous over the next few financial quarters.
Having said that, star stock performers like the Big Four glove makers may continue to dole out record dividend pay-outs.
Upside pressure due to re-introduction of RSS
The current pressure is only coming from regulated short selling (RSS), the suspension of which was lifted on Jan 1. But brace for more market volatility with the return of intraday short-selling (IDSS) and intraday short-selling by propriety day trader (PDT short sale) once the suspension is lifted after Feb 28 when the market regulators feel that the time is ripe to lift its suspension.
To re-cap, Bursa Malaysia and the Securities Commission (SC) lifted the temporary suspension on RSS activities from Jan 1 onwards premised on the objective of achieving market efficiency through a better price discovery mechanism.
The ban on short-selling activities was first imposed on March 23 last year to mitigate potential risks arising from heightened volatility and global uncertainties triggered by the unprecedented COVID-19 pandemic.
Whether it is the RSS or IDSS, short-selling is necessary to make the stock market more vibrant and to increase market liquidity. Bringing back short-selling activities would also make the local bourse more appealing to foreign investors.
Surge in the number of PN17 listed issuers after the 12-month relief measures
On April 17 last year, Bursa Malaysia announced that listed issuers that trigger certain criteria in Practice Note 17 (PN17) and Guidance Note 3 (GN3) of the Listing Requirements from April 17, 2020 to June 30, 2021 have been exempted from the PN17 or GN3 classification for a period of 12 months from the date of triggering the specified criteria.
Instead, the affected issuers are only required to make an immediate announcement that they have triggered the specified criteria and the relief provided.
After the 12-month period, affected listed issuers which trigger any of the PN17 or GN3 criteria will be classified as such and must comply with all the obligations under paragraph/Rule 8.04 and PN17/GN3 of the Listing Requirements.
As of Nov 30, there are a total of 25 companies classified under PN17 (22 companies) and GN3 (three companies) which represent 2.77% of the total number of 902 listings on the Main Market and ACE Market of Bursa Securities.
More privatisation exercise as market undervalues stocks
When major shareholders think that the price of their stocks have been bashed to an unreasonable level or that the market for their stocks have become so illiquid that raising fund becomes difficult, they would start to question the listing status.
Against the backdrop of a pandemic-stricken economy, MSWG’s main concern is that it will become a trend for companies with low price-to-book (or price earnings) ratios to be privatised at very low offer prices on the premise that it is still higher than the prevailing share price, and the offer offers an option for the shareholders to exit.
What is needed is for the regulators to consider adopting the practice in Singapore where offers must be both ‘fair and reasonable’ before it comes to the table – if it is not, it is a non-starter.
Currently, an offer that is ‘not fair but reasonable’ can come with an ‘accept’ advice by the Independent Advisors and is open for shareholders acceptance.
An acceleration of fund-raising activities
On Nov 10, the SC and Bursa Malaysia unveiled a temporary relief measure which allows eligible PLCs and REITs (eligible listed issuers) to issue new rights shares or units to their existing securities holders on a pro rata basis, up to 50% of the total number of issued shares or issued units.
Under this expedited process, eligible listed issuers will be granted greater flexibility to manage market uncertainties while making capital calls, and fast track secondary fundraising, subject to conditions, eg the eligible listed issuers must have controlling securities holders who will provide an irrevocable undertaking to subscribe for their full entitlements with not more than a 30% discount to the theoretical ex-rights price on these newly issued shares or units.
Moreover, such rights issue must be a plain vanilla issuance where it can only be utilised for ordinary shares or units and not any other types of securities such as warrants or convertible shares.
This new general mandate for rights issue is in addition to the enhanced 20% general mandate for the issue of new securities, commonly utilised for private placements. Both relief measures are valid until Dec 31, 2021.
Given that many PLCs are facing operational challenges – including raising working capital and repaying bank borrowings – the market regulators believe that an expedited process for rights issues will enable them to be more agile by being able to raise funds from their existing securities holders within a shorter time-frame to meet their capital and financial needs.
Impact from imposition of MCO 2.0
It is too early to tell how implementation of the latest MCO 2.0 which comes side-by-side the declaration of a state of emergency (until Aug 1) to curb the recent spike of COVID-19 infection rate will pan out.
For now, speculation is rife that the MCO 2.0 (from 13 to 26 January) will likely extend beyond two weeks with an estimated daily loss of RM750 mil/day which is much lower than RM2.4 bil/day during the first MCO from March to May 2020.
Based on preliminary assessments, some of the sectors that might be negatively impacted include (i) brewers; (ii) consumer; (iii) gaming; (iv) REITs; (v) airlines/airports; and (vi) banks (as the MCO 2.0 raises the possibility of further overnight policy rate cuts). – Jan 18, 2021
Devanesan Evanson is the CEO of the Minority Shareholders Watch Group, an independent research organisation to encourage good governance among public listed companies with the objective of raising shareholder value over time. He can be reached at firstname.lastname@example.org.
The views expressed are solely of the author and do not necessarily reflect those of Focus Malaysia.
Daisy Clark – Battle Scars
Wear a mask. Save lives. – Wear a mask – Clean your hands – Keep a safe distance
Good Morning, Folks. Stock and bond markets in the U.S. will be closed Monday, January 18 in observance of Martin Luther King, Jr. Day, offering traders a short break from what’s already been a hectic year.
Bored? Come over to Bursa Malaysia aka KLSE – KUALA LUMPUR STOCK EXCHANGE.
The Proclaimers – I’m Gonna Be (500 Miles)
STAR (Jan 16) Eye On Stock – Spritzer
Spritzer Bhd (code: 7103) gapped up at Friday’s opening to challenge the 200-day simple moving average (SMA) but erased all its gains to close unchanged at day’s end.
The stock has been facing consolidation pressure ever since it bottomed out at a recent low of RM1.87 on Monday. There have been two attempts thus far to break above the 200-day SMA, but both were unsuccessful. At present, the stock remains at risk of resuming its correction unless buying interest is sustained to make a break above the resistance.
Based on the daily price chart, a breakthrough of the 200-day SMA and the nearby 21-day SMA would see the counter trading above all the key moving averages. This would free the bulls to roam higher towards an initial resistance of RM2, and higher still to a stiffer hurdle of RM2.04.
The RM2.04 mark serves as the 50% Fibonacci retracement level, a crossing of which would suggest strong upward momentum. For the present, momentum remains weak following Friday’s performance. Although the slow-stochastic has risen out of oversold conditions, it is hovering at a low level of 24 points.
The 14-day relative strength index has flattened out above 30 points, also indicating a lack of upward momentum. Meanwhile, the daily moving average convergence/divergence line remains on a downtrend as it heads lower below the zero line.
Based on the trading volume, investor interest in the stock remains tepid as compared to the build up of volume seen in the early December period as the stock built up to a strong rally. This would suggest that there is yet to be a strong catalyst to give the stock the necessary push to break out of the current bearish channel.
At the lower end of the chart, support is found in the RM1.85-RM1.87 range, a negative breach which would signal an extension of the downtrend.
The comments above do not represent a recommendation to buy or sell.
ARA JOHARI – BUNGA
EDGE (Jan 15) KNM, Kanger, SKP, Batu Kawan, CCM, Daya Materials, Samaiden, MESB, Seacera, AT Systemization, Notion-VTec, TNB, GenM and FGV
KUALA LUMPUR (Jan 15): Based on corporate announcements and news flow today, stocks that may be in focus on Monday (Jan 18) include: KNM Group Bhd, Kanger International Bhd, SKP Resources Bhd, Batu Kawan Bhd, Chemical Company of Malaysia Bhd (CCM), Daya Materials Bhd, Samaiden Group Bhd, MESB Bhd, Seacera Group Bhd, AT Systemization Bhd, Notion-VTec Bhd, Tenaga Nasional Bhd (TNB), Genting Malaysia Bhd (GenM) and FGV Holdings Bhd.
KNM Group Bhd plans to raise up to RM54.93 million via a private placement to pay off its bank borrowings and to fund some ongoing projects. The process equipment manufacturer aims to issue up to 10% of its share capital or 296.92 million shares, which will be placed out to third-party investors to be identified. It said RM20 million of the proceeds raised will be used to repay bank borrowings, while RM33.63 million will be used to procure raw materials, pay subcontractors and other related expenses for its ongoing contracts in Indonesia, Malaysia and Guyana.
Kanger International Bhd has diversified into the construction business by signing six deals totalling RM495.9 million today. It involves the group undertaking the remaining works at six construction sites in Kuala Lumpur and Pahang, the group said. The jobs were awarded by the main contractors of the projects and will provide a steady stream of revenue for the group during the tenure of the deals. The scope of works includes management of subcontractors appointed by the main contractors and the handling of financial matters which include fulfilling payments to the sub-contractors promptly.
SKP Resources Bhd is temporarily closing its Johor Bahru operations from Jan 16 till Jan 29, to facilitate Covid-19 screening of its employees, after five of them tested positive last week. This temporary closure is expected to result in a capacity loss of 3% of its annual output, SKP said.
Batu Kawan Bhd has updated that it now controls 92.14% of Chemical Company of Malaysia Bhd (CCM), after receiving more acceptances for its RM3.10 takeover offer. With its shareholding rising above 90%, Batu Kawan said it will not be maintaining CCM’s listing on the Main Market of Bursa Malaysia. The group said the offer will remain open for acceptance until Feb 2.
Daya Materials Bhd, a Practice Note 17 (PN17) company, said its subsidiary has secured an RM23.86 million construction sub-contract in Banting, Selangor. The sub-contract awarded to its 51%-owned subsidiary Daya CMT Sdn Bhd involves the construction of a recycle pulp and packaging paper plant in Mahkota Industrial Park. It was awarded by Sing Foong Niap Engineering Sdn Bhd and is targeted to be completed by June 30.
Samaiden Group Bhd has secured a RM25.8 million contract from Gimzan Plywood Sdn Bhd to develop a biomass-based power plant in Terengganu. The contract will commence on Feb 2, and the job is targeted to be completed within 23 months.
MESB Bhd plans to venture into the waste recycling business, as it sees its loss-making trading and retailing of apparel and leather products business to continue to face challenges amid the Covid-19 pandemic. The group said the waste recycling business has a favourable outlook to enhance its prospects and financial performance, as well as reduce its sole dependency on the existing business.
Seacera Group Bhd is selling a 72,770 sq metre land in Taiping, Perak to AT Systematization Bhd’s glove unit for RM10.5 million. The land being sold to AT Glove Engineering Sdn Bhd was valued at RM11.7 million by an independent valuer in June 2015. The deal is deemed to be a related party transaction because Asiabio Capital Sdn Bhd is a major shareholder of Seacera and AT Systematization.
Notion VTec Bhd announced today that some of its workers have been tested positive for Covid-19 and that the company has detected 87 positive and suspect cases thus far within its premises. The hard-disk drive manufacturer said as a precautionary and preventive measure, the company has conducted Covid-19 tests on workers who have had close contact with infected workers.
Tenaga Nasional Bhd (TNB) said it will implement the government-approved enhanced terms for the electricity connection charge and connected load charge, effective today. A connection charge is the upfront payment made by consumers who require new electricity supply infrastructure or an upgrade of existing infrastructure to cater for additional power supply. Meanwhile, the connected load charge is a mitigating tool to discourage consumers from over-declaring their electricity load requirement, TNB said.
Genting Malaysia Bhd‘s (GenM) wholly-owned subsidiary Genting UK plc permanently closed its Genting Casino Southport, in the north-west of England, with 38 staff members facing redundancy. According to gaming news portal G3 Newswire, GenM said the closure was “simply unavoidable” due to the lack of business as a result of Covid-closures. The gaming group has already closed casinos in Margate, Torquay and Bristol and has reduced its workforce in London, Glasgow, Edinburgh, Blackpool and Birmingham.
Federal Land Development Authority (Felda) has acquired 5.14 million FGV Holdings Bhd shares for a total of RM6.64 million yesterday, following an earlier purchase of 22 million shares, as part of its efforts to take the group private. The smaller tranche of shares was also bought at RM1.29 apiece, one sen below its cash offer of RM1.30 for FGV shares. To date, the agency has acquired 27.1 million of FGV’s shares from the open market, representing a 0.74% equity stake.
Eric Clapton – Wonderful Tonight
Don’t go out unless necessary. If you must go out of the house, wear a face mask and keep at least 6 feet (2 meters) of distance between you and other people.
Today is Saturday, which means that the only decision that you should be making is whether to have a bottle or a glass of Coca-Cola. LOL
No work is pending, all the duties done, let’s have some fun.
Neil Young – Hey hey, My my. The lyrics“The king is gone but he’s not forgotten” – “The King” is Elvis Presley, who died in 1977, two years before this song was released.
STAR (Jan 16) Short Position – Pui’s challenge, Online betting, lack of options
Pui’s challenge fizzles out
FOR three weeks beginning Dec 18,2020, there were doubts if Batu Kawan Bhd would be successful in its offer to take over Chemical Company of Malaysia Bhd (CCM).
This is following the emergence of low-profile seasoned investor Pui Cheng Wui in CCM with a 16.12% stake.
If Pui did not accept the offer, Batu Kawan would not be able to reach the 90% acceptance level threshold to take CCM off Bursa Malaysia.
Pui purchased the shares, amounting to 27.56 million, from the open market. The amount is staggering and would have cost Pui some RM83mil, assuming he purchased the shares at RM3.08 each. Batu Kawan’s offer for CCM was RM3.10 per share, hence leaving him a two sen margin.
The plantation group launched the offer on Nov 17,2020, after buying a 56.32% stake from Permodalan Nasional Bhd (PNB). Batu Kawan appeared to have everything sewn up until the emergence of Pui as a substantial shareholder on Dec 18.
Pui’s entry in CCM was seen as an attempt to seek a higher price from Batu Kawan. The independent advisers felt that the offer was under priced but reasonable considering the trading trend of CCM.
However, on Jan 4 this year Pui sold his block. When Pui sold his 16.12%, Batu Kawan had already amassed some 61% in CCM. In the latest announcement it had 92.14% of CCM.
If Pui had held on to the block of shares, it could possible be a battle that drags on for years. Assuming Batu Kawan mops up the rest of the shares except for Pui’s block, the company would not fulfil the free float requirement of Bursa Malaysia and would have to be suspended.
The shares of a company that is suspended is really of little use to its beneficial owner. Banks are generally do not accept the shares as collateral and it is cannot be sold easily. Pui probably read the trend and disposed of his block by accepting the offer.
Pui would have made some money. But not as much as it could have been had Batu Kawan been forced to revise the offer.
ONCE again, legal gaming and number forecast operators (NFOs) are on the backtrack. The second movement control order (MCO 2.0) is going to hit their takings and by virtue of that, the government will see a correlated drop in tax revenues from the operators. And just like the first movement control order (MCO), the illegal operators will benefit as they operate largely in the online world.
As people move to do more things online, they naturally would turn to online gaming sites.
Most of these sites are run illegally – they are unlicensed and do not contribute any tax to the government, unlike the licensed gaming and NFOs.
Analysts are expecting a significant hit to the earnings of the latter. NFO’s can’t operate in states under the MCO while those allowed to operate in the conditional MCO and recovery MCO states will likely see a sharp decline in patrons due to the pandemic.
The punters have an avenue to go online via legalised platforms run by NFOs. After all, digital platforms are the very lifeline of life in lockdowns globally, be in ordering food or conducting meetings.
The government should facilitate the right parties to operate either a single platform or platforms by the legalised NFO players.
The parties will ensure that the government’s best interest is taken care of when draws go online.
There should also be a thorough know your customer system in place. Reporting levels also ought to be in place to avoid activities like money laundering.
This way, not only would illegal online platforms be less attractive, it would also mean more tax revenues to the government and finally, an option for the man on the street to do his or her betting online and thus limiting movements during the pandemic.
Lack of options a gain
WHEN the glove stocks were the rage of the stock market last year, they rallied strongly with the large players chalking up huge gains amid a downturn in the stock market.
The first movement control order (MCO), which forced businesses to shut and the loan moratorium that put more money in the hands of punters, led to a liquidity rally not seen on Bursa Malaysia in a long time just as the country was emerging from a devastating second quarter which saw the GDP shrink by 17.1%.
Penny stocks and those associated with the healthcare play were the vogue of punters.
As investors were looking to capitalise on the healthcare play, the technology stocks carried on with their steady rise.The same is seen in the plantation stocks where only the large and liquid names have benefited from the super strong price of crude palm oil.
The hanging question is when will the price cycle end?
As the interest in healthcare stocks start to wane, the Bursa Malaysia Technology Index, which rose by 84% last year, continued with its steady uptrend.
The tech counters have punched upwards, which brings about the question whether they, as a group, have seen valuations stretched to lofty levels.
Other cyclical sectors that have far greater linkages with the domestic economy are stuttering.
The fresh MCO, together with heightened uncertainty, is casting a pall on the stock market but liquidity is continuing to find a home in the charging tech counters.
The valuations of a lot of the tech stocks are frothy but the lack of rotation into other plays suggests there is little option for investors to take a bet on.
As those counters continue to move upward, there will be increasing questions of whether the fundamentals have been stretched. But it also illustrates the problem the market is digesting.
Willyecho – Killer Inside of Me
STAR (Jan 16) Malaysia not alone in launching Covid-19 emergency
THE state of emergency announced by Prime Minister Tan Sri Muhyiddin Yassin this week is not unique to Malaysia as several other countries have declared similar measures since last year to curb the pandemic.
One example is Italy, where this week, the government extended its “Covid-19 state of emergency” until the end of April.
Italy’s state of emergency was first introduced in January 2020 to curb the spread of coronavirus as numbers soared.
It gives power to the central government for officials to bypass the bureaucracy for much of the decision-making related to containing the pandemic.
According to the Swiss-based Centre for Civil and Political Rights, about 79 countries have introduced varying degrees of emergency status since last year. They include Australia, France, Finland, Indonesia, the Philippines and Thailand.
In Malaysia, the state of emergency was announced in conjunction with the second movement control order.
Apart from fighting a pandemic, there was a brewing political unease with which unless nipped, may have negatively impacted the country in its fight against the third and more sever wave of the Covid-19 outbreak with daily infections topping 3,000.
“While it averted destabilising political wrangling and holding an early election in the midst of a pandemic, the emergency rule has focused investors’ concerns over the country’s continuing political uncertainty, ” Sunway University economics professor Prof Yeah Kim Leng (pic below) tells StarBizWeek.The decision to invoke states of emergencies shows the difficult choices many world leaders have been facing for almost a year into the pandemic.
As the crisis enters a more critical phase globally, governments are under pressure to bring down infection numbers while also looking to boost economic activity.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid says that the call for a state of emergency gives focus so that the necessary energy and resources can be directed towards efforts to curb the virus through the rollout of vaccination programmes.
“Businesses and households would have more clarity and certainty on how the government would deploy their resources to stabilise the economy.
“To a large degree, the constitutional monarch can be deemed as a stabiliser at a time when there is excessive political uncertainty, ” he says.
In Italy, the move to extend the country’s state of emergency came at a time of a political crisis amidst the pandemic.
The ruling coalition led by Prime Minister Giuseppe Conte is battling to keep the government afloat after two of his ministers resigned.
Aside from Italy, another country that announced a state of emergency is Japan.
Japanese Prime Minister Yoshihide Suga declared a state of emergency in Tokyo and surrounding areas as Covid-19 infections and the number of deaths reached record levels.
The measure though was only for one month. For Japan, the emergency hands the power to the local government to urge people to stay at home after 8pm and limit business operations.
The effect is to increase powers of the prefectural governors to “urge” local people to avoid unnecessary gathering. Residents though have the right to ignore such requests and no penalties are involved.
Malaysia’s neighbouring countries Thailand, Indonesia and the Philippines have announced a state of emergency since last year.
Thailand, which had earlier been successful in containing the Covid-19 outbreak, is facing a new wave of infections.
The country’s state of emergency in relation to the Covid-19 outbreak was first declared last March. It was recently extended until the end of this month as the country faces a surge in coronavirus cases.
Last September, President Rodrigo Duterte (pic below) extended the Philippines’ state of emergency for another year in the name of addressing the Covid-19 crisis.
Duterte first placed the country under a state of emergency last March when the number of confirmed infections was approaching 200 people with about a dozen deaths.
Malaysia’s state of emergency will last until August this year.
Sunway University’s Yeah says many quarters have questioned the need for the emergency rule that was only applied in the past when the nation’s law and order was under threat.
But he adds, “Its current usage will enable the government to mobilise all its resources including the army to suppress the pandemic. It also averts a change in government and an early election in the middle of a pandemic, ” he says.
Phil Collins – A Groovy kind of Love
For your info stocks currently held by TESSA; PUNCAK, HIBISCUS, QES, & REV. No new additions to the list and I tell you that I had a tough decision to make last week…. Hmmm
14/1/2021 Bursa Trade Stat :Retail (38.88%) – net BUY 6.93 mil. Institution (45.61%) – net SELL 12.28 mil. Foreign (15.51%) – net BUY 5.35 mil. Total traded value 4868.96 mil.
Trade at your own risk. No Investment Recommendations or Professional Advice. Nothing on this blog should be construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any security or product.
Ringgit expected to outperform other Asian currencies
SUNBIZ (Jan 14) PETALING JAYA: The ringgit is expected to outperform other Asian currencies in 2021, due to the Malaysian currency being a proxy for the global reflation trade, its attractive valuations and the rise of the yuan driving the ringgit, according to Standard Chartered head of Asean and South Asia for foreign exchange (FX) research Divya Devesh.
“We have been positive on the ringgit since late 2020 and we think that during 2021 as well the ringgit will outperform the region more broadly. We’re targeting the ringgit at RM3.90 against the US dollar in 2021 and have an overweight recommendation on the currency,” he told a virtual press conference for its 2021 Global Research Briefing today.
Firstly, he said the ringgit tends to outperform during periods of recovery in global trade and global reflation and rising commodity prices should boost Malaysia’s exports.
“Looking at the correlation of Asian currencies (nominal effective exchange rate) versus global trade volumes, you can see that ringgit has the highest correlation to global trade volume across Asia. For a commodity exporter like Malaysia, commodity prices have rallied and some of the commodities that Malaysia exports like CPO and LNG prices have recovered strongly and that should help Malaysia’s exports and should be a bolster for the ringgit.”
Secondly, he said the ringgit offers attractive valuations. The ringgit’s real effective exchange rate (REER) is low even relative to its recent range and the currency is an outlier in the region in terms of FX valuations. Ringgit gains have lagged relative to commodity prices and ringgit also lagged behind other commodity currencies.
“We think the ringgit is still significantly undervalued even at these levels. Using REER as a measure of valuation, it’s 9% undervalued at current levels. Ringgit is the most undervalued currency in Asia at this point. Commodity prices have recovered but even at these levels, the ringgit has not appreciated enough to reflect the improvement in commodity prices,” explained Divya.
Thirdly, he said, US dollar-ringgit has been strongly correlated with US dollar-yuan.
“The correlation of US dollar-yuan versus US dollar-ringgit has increased significantly over the last few years. Essentially, yuan has emerged as an important driver of the ringgit. We’ve a fairly positive view on the renmimbi and to the extend that renminbi performs strongly this year and that opens the door for further ringgit appreciation as well.”
Commenting on rising Covid-19 cases in Malaysia, MCO 2.0 and state of emergency, Divya opined that foreign investors may take a wait-and-see approach, but does not think that this is immediately going to lead to outflows as the technical backdrop for flows remains positive.
“We’re still in an environment where the amount of negative-yielding debt globally is close to US$17 trillion. Against that universe of increasing negative-yielding debt, Malaysia still offers meaningful yield pickup in nominal and real terms. Across Asia, looking at the current inflation versus nominal 10-year yields and their difference, Malaysia offers the highest across the region.”
Standard Chartered chief economist of Asean and South Asia Edward Lee estimates that a one-month nationwide MCO may subtract 1-1.5 percentage points from 2021 gross domestic product (GDP) growth, assuming the impact is 50% less than the first MCO, given a better ability to cope with restrictions.
“This poses a downside risk to our 2021 GDP growth forecast of 7.5%. The impact may be even lower due to first, MCO 2.0 appears to be less restrictive and has not been applied nationwide. Second, the world is not in a synchronised lockdown this time around. Third, the ability to cope with restrictions should mitigate the impact of the MCO. Fourth, stimulus measures have already been implemented and remain largely in place. Lastly, the promise of a vaccine should help limit the downside hit to confidence.”
Lee expects Bank Negara Malaysia to pause on the Overnight Policy Rate given its firmly neutral stance, estimating that it will stay at 1.7% this year.
Lee expects Bank Negara Malaysia to pause on the Overnight Policy Rate.
A Great Big World, Christina Aguilera – Say Something
People who smile while they are alone used to be called insane, until we invented smartphones and social media — Mokokoma Mokhonoana.
So true, funny summary of how world is changing.
Yael Naim – New Soul
Rev Asia proposes to acquire iMedia along with rights issue as part of regularisation plan
SUNBIZ (Jan 14) PETALING JAYA: Rev Asia Bhd has proposed to acquire iMedia Asia Sdn Bhd and its subsidiary along with a rights issue with attached warrants for RM10 million, as part of its proposed regularisation plan submitted to Bursa Malaysia.
iMedia is an integrated digital media group focused on content, technology and social influencer marketing with over 15 million visitors.
The group said the purchase consideration will be satisfied fully through the issuance of new ordinary Rev Asia shares on completion.
Should iMedia’s audited net profit after tax achieve its target of RM3 million for FY2021, the group will issue an additional RM30 million in new shares, to incentivise both parties in growing the company’s financial performance over the long-term.
Upon joining REV Asia, iMedia will have access to the capital markets and liquidity to accelerate its acquisition and growth plans with a major emphasis on profitability.
Over the past year, iMedia has expanded its reach in the digital advertising space with the acquisition of four media sites and a social influencer platform.
Rev Asia’s chairman Datuk Larry Gan commented that iMedia is expected to enjoy a tailwind from digital adoption that was accelerated by the Covid-19 pandemic.
“We are extremely excited in taking the first step in working together with the team at iMedia to build a digital media leader again, not just in Malaysia, but in the region,” he said in a press release.
As part of the proposed regularisation plan, the group aims to undertake a renounceable rights issue with attached warrants to acquire Goody Technologies, Nara Media and Moretify and further working capital needs of the company.
Positive undertone to drive KLCI towards 1650-1668 levels after breaking above 1618 barriers.
AE Multi, Dayang, HeiTech, Eco World Development, UEM Sunrise, Chin Hin
STAR (Jan 14) KUALA LUMPUR: Stocks to watch on Thursday include AE Multi Holdings Bhd, Dayang Enterprise Holdings Bhd, Heitech Padu Bhd, Eco World Development Group Bhd, UEM Sunrise Bhd and Chin Hin Group Bhd, according to JF Apex Research.
The research house house also said WCT Holdings Bhd, Greatech Technology Bhd, AEON Credit Service (M) Bhd, Genting Malaysia Bhd and Wintoni Group Bhd could see trading interest following their latest corporate news.
AE Multi has bagged another project to set up the production facility for PNE PCB, a new entrant to the rubber glove industry.
Dayang Enterprise has won a contract extension from Sarawak Shell Bhd. The group said its wholly-owned subsidiary DESB Marine Services received the contract extension for the provision of an accommodation workboat, Dayang Opal.
The Inland Revenue Board has renewed a contract worth RM35.3mil for HeiTech Padu for supply, delivery and renewal of CA Gen software, Access Gen (TSO) and Composer Report for the mainframe system.
Eco World Development said the property developer’s board has decided not to pursue the proposed merger with rival UEM Sunrise following careful evaluation of the merger alongside EcoWorld’s own business plans and the current challenging environment with the re-implementation of the Movement Control Order (MCO).
Chin Hin Group Property has proposed to acquire a 1,943 sq metre piece of vacant land in Kuala Lumpur for RM20.91mil to develop office lots.
WCT said a judicial committee has upheld the Dubai Court of Appeal’s decision that recognises a final award of RM1.2bil in favour of the company in its dispute with Meydan Group LLC over the Nad Al Sheba Dubai Racecourse project.
Greatech Technology is buying 5.9 acres of leasehold land in Penang for RM13.37mil from the Penang Development Corp.
Aeon Credit has been granted a renewal for its money-lending licence under the Moneylenders Act 1951 and Moneylenders (Control and Licensing) Regulations 2003 by the Ministry of Housing and Local Government.
Genting Malaysia’s Resorts World Genting (RWG) has issued a notice that it anticipates a decline in number of visitors following the implementation of the MCO, conditional MCO (CMCO) and recovery MCO (RMCO).
It said it will be operating at a lower capacity and that some of its offerings may not be available from Jan 13, 2021.
Wintoni has been granted a further extension of time to appoint a replacement sponsor and submit its regularisation plan.
Meanwhile, US markets ended mixed with the Dow falling while the S&P and Nasdaq posted gains after Federal Reserve officials said interest rates will not be raised.
Earlier, European stocks climbed amid vaccine rollout and lockdown measures in the region.
“Following the mixed performances in the US and Europe, the FBM KLCI could hover sideways below the resistance of 1,650 points,” JF Apex said.
TESSA’s Gentle Reminder: Trade at your own risk. All the information made available here is generally provided to serve as an example only, without obligation and without specific recommendations for action.