Bursa joins Asean markets to end morning weaker

Asean markets slumped on the final trading day of 2020 while at Bursa Malaysia, the FBM KLCI was weighed down by losses in Sime Darby Plantation, Maybank and Top Glove.

At 12.30pm, the KLCI was down 9.04 points or 0.55% to 1,635.37. Turnover was lacklustre at 2.98 billion shares valued at RM2.98bil. The broader market was cautious with 560 losers to 402 gainers and 484 counters unchanged.

China's Shanghai Composite rose 0.83% and Hong Kong's Hang Seng Index added 0.31% while Taiwan's Taiex gained 0.14%. South Korea and Japan markets were closed.

Among Asean markets, Singapore's Straits Times Index slipped 0.89%, Thailand's SET fell 0.86% and Jakarta's Composite 0.95% lower.

Sime Plantation fell 17 sen to RM5 after it was accused of using forced labour prompting the US to ban imports of its palm oil. It erased 1.79 points from the KLCI.

Crude palm oil for third month delivery fell RM11 to RM3,577 per tonne.

KL Kepong lost 20 sen to RM24, IOI Corp was flat at RM4.40 and also unchanged was PPB Group at RM18.86.

Among the banks, Maybank fell five sen to RM8.52 and erased 0.86 of a point, CIMB five sen lower at RM4.33, Hong Leong Bank 18 sen to RM18.38 but Public Bank rose eight sen to RM20.78. Aeon Credit lost 16 sen to RM11.92.

As for glove makers, Top Glove fell seven sen to RM6.05 and erased 0.87 of a point, Hartalega six sen lower at RM12.14 and Supermax three sen to RM5.95. Kossan fell 15 sen to RM4.45.

Get Free Signal for KLSE Makret

Tenaga shed two sen to RM10.50, GentingM three sen to RM2.70 and Genting two sen to RM4.51.

US light crude oil eased three cents to US$48.37 and Brent one cent to US$51.62.

Petronas Chemicals fell five sen to RM7.45, Petronas Dagangan and Petronas Gas unchanged at RM21.40 and RM17.34. Dialog shed two sen to RM3.45.

Toyo Ventures was the top gainer, up 23% ot 39 sen to RM1.69 and its warrants 30 sen to RM79.5 sen.

MPI added 32 sen to RM25.20 and JF Tech 17 sen to RM4.99.

Cover Story: Taking Over The Reins At A Trying Time

ON the 83rd floor of the Petronas Twin Towers last week, Tengku Muhammad Taufik Tengku Aziz, the president and CEO of Petroliam Nasional Bhd (Petronas), met up with The Edge for a 2½-hour interview, the longest that any CEO of the national oil company has had with us so far.

And the hours seemed to pass very quickly with humorous exchanges and banter, but with all questions answered and peppered with facts on the oil company and its direction. It was a frank and good interview.

Then again, the times they are a-changing — and for the first time since it was set up in 1974 to become the custodian of the country’s hydrocarbon resources and main regulatory body for upstream activities by concessionaires such as Shell and ExxonMobil at the time — Petronas may slip into the red. It is a situation brought about by the total collapse of the oil and gas (O&G) market and economic standstill owing to Covid-19 and impairments from the acquisition of assets a few years ago, when things were rosier and oil prices not so volatile.

And while all these challenges are looming and taking their toll on operations, there is the shareholder — the federal government — which looks to the oil company for dividends and other forms of support to help in its running of the country’s economy during the pandemic. This requires the top brass at Petronas to perform the delicate balance of meeting both the needs of the company and that of the government of day.

Quite recently as well, the O&G industry was abuzz with talk of several individuals at Petronas being investigated by the authorities for corruption — another issue Muhammad Taufik has to grapple with, as there is no longer this perception that the national oil company has high standards of integrity.

At 46, Muhammad Taufik may seem young, but his demeanour, how he handles himself, his stature, confidence and capability — how he explained the numbers at Petronas — were impressive, to say the least. And with age on his side, he could be at the helm of the national oil company for the foreseeable future, setting the direction for Petronas’ next phase of development, including diversifying into renewable energy and speciality plastics.

A Petronas scholar, Muhammad Taufik served in the early 2000s as executive assistant to former Petronas chairman Tun Azizan Zainul Abidin — the man who, among others, crafted Petronas’ mission statement to be an organisation of high integrity and professional values. The late Azizan was also the one who kick-started Petronas’ global expansion.

Five months into the job as president and CEO, Muhammad Taufik shares his experiences, views on the industry and the difficulties encountered in a Covid-19 economy and market. Here are excerpts of the interview.

KLCI settles up after MSCI gauge climbs to record high

 

The FBM KLCI closed up 9.42 points or 0.58% at 1,644.41 today after MSCI's gauge of Asia-Pacific shares climbed to a record high on world economic recovery bets in anticipation of continued global monetary and fiscal policy support. Fund managers’ portfolio window dressing is also seen contributing to Malaysian share gains.

Across Bursa Malaysia at 5pm, 7.82 billion securities were traded for RM3.65 billion.

"Stocks should return to base building mode to strengthen higher supports pending potential late window-dressing action ahead of the year-end,” TA Securities Holdings Bhd analysts wrote in a note today.

Globally, it was reported that Asian shares hit a record high on Wednesday with investors betting on a strong economic recovery next year, as there is little sign of policymakers winding back massive stimulus efforts aimed at staving off coronavirus-fuelled downturns.

It was reported that MSCI's gauge of Asia-Pacific shares excluding Japan rose 1.2% to hit a record high, led by gains in Chinese shares and bringing its gains so far this year to 18.9%.

"We think continued monetary and fiscal policy support means investors should take risk. Stocks will do better than bonds. Within bonds, corporate bonds should beat government bonds,” Reuters quoted Hiroshi Yokotani, head of Asia-Pacific fixed-income business at State Street Global Advisors, as saying.

FGV Appoints RHB IB As Independent Adviser Of Takeover Offer

 KUALA LUMPUR (Dec 30): FGV Holdings Bhd said today RHB Investment Bank Bhd (RHB IB) has been appointed as the independent adviser of the proposed unconditional mandatory takeover offer for FGV shares at RM1.30 each by the Federal Land Development Authority (Felda). 

In a statement to Bursa Malaysia today, plantation group FGV said RHB IB has been appointed to advise the group’s non-interested directors and holders of the offer shares in respect of the fairness and reasonableness of the offer.

FGV said the appointment is subject to the Securities Commission Malaysia's clearance of RHB IB’s eligibility as the independent adviser of the takeover offer.

On Dec 22, 2020, FGV said it had received the unconditional mandatory takeover offer notice at RM1.30 a share from Felda, which intends to delist FGV from the local bourse.

Felda’s takeover offer for FGV became unconditional after the collective FGV shareholding of Felda and persons acting in concert with it rose past 50%.

It was reported that at the offer price of RM1.30 a share, FGV is valued at some RM4.75 billion based on its issued share capital of about 3.65 billion.

At Bursa’s 12:30pm break today, FGV’s share price settled down one sen or 0.78% at RM1.28. 

FGV’s latest-reported net assets per share stood at RM1.13.

Genting-run Universal Studios Singapore fully booked

 Genting Bhd’s 52.66%-owned subsidiary Genting Singapore Ltd’s operating unit Resorts World Sentosa (RWS) said the Universal Studios Singapore theme park within RWS has reached capacity for Thursday (Dec 31) and Friday (Jan 1, 2021).

Meanwhile, RWS' S.E.A. Aquarium has reached capacity for today and tomorrow, according to a notice on RWS’ website.

"We encourage you to select another date to visit,” RWS said in the notice to potential visitors.

RWS’ notice coincides with the start of Singapore's Phase 3 reopening since yesterday at a time when the global community is still contending with the economic impact of the Covid-19 pandemic driven restricted movement policies to curb the outbreak.

It was reported that following Singapore’s exit from a two-month-long Covid-19-driven circuit breaker on June 1, authorities said the island nation would reopen in three phases. 

"Phase 2 started on June 19, and the Covid-19 task force had said in October that Phase 3 could begin before the end of the year,” CNA reported on Dec 14.

On Bursa Malaysia today, Genting’s share price closed down five sen or 1.1% at RM4.50 at 5pm for a market capitalisation of about RM17.33 billion. The stock saw some 10 million shares traded.

Brexit 'big bang' to trigger tectonic trading rift in Europe

LONDON: Europe will see its biggest transfer of share trading in more than two decades when stock exchanges open for business in 2021, with Brexit shifting its centre of gravity away from London.

While market players hope that years of preparations since Britain voted to leave the European Union means the transition of most euro-denominated assets like shares and derivatives out of the country will be relatively smooth, the long-term impact is unclear.

"This is a big bang event and that is one of the things that the market hasn't truly understood yet," Alasdair Haynes, chief executive of London-based share trading platform Aquis Exchange, told Reuters.

"This is literally everything moves on a specific day and we have got to pray to God that we don't have some extraordinary event happen in the market that creates high volumes," Haynes said.

While the landmark trade deal agreed last week set rules for industries such as fishing and agriculture, it did not cover Britain’s much larger finance sector, meaning automatic access to the EU's financial markets comes to an end on Dec 31.

The following days will provide a first taste of the effects of the shift and regulators on both sides of the English Channel will be on alert for market dislocations on Jan 4, the first trading day of the new year.

The EU wants to reduce reliance on the City of London for financial services and see more euro-based trading in Frankfurt, Paris, Amsterdam and other financial centres in the bloc.

That will split Europe's stock, bond and derivatives markets into two separate trading pools, raising concerns that investors will get less competitive prices.

EU banks must trade euro-denominated shares inside the bloc from Jan. 4, forcing them to switch from platforms run by the likes of Cboe Europe, Aquis Exchange, London Stock Exchange's Turquoise and Goldman Sachs in London, to EU hubs they have opened in Amsterdam or Paris.

Most shares are still traded on their home exchange, but between them London platforms account for nearly all cross-border trading in shares in the remaining 27 EU states.

That amounted to 8.6 billion euros ($10.4 billion) a day collectively in October, or a quarter of all European trading, Cboe data shows.

David Howson, president of Cboe Europe, said almost all cross-border European stock trading will switch overnight.

The last time there was such a rapid shift in volumes was in 1998 when trading in 10-year German Bund futures by dealers in stripy jackets on the LIFFE exchange floor in London was lured by cheaper electronic screens to Frankfurt.

"It's the biggest single share trading shift in the last two decades at least," Howson said.

'HUGE OWN GOAL'

For Aquis, more than half of its business will in future be in the EU rather than all in London, while Cboe is hopeful that clearing in share trades could move from rivals in London to its own clearing house in Amsterdam over time.

Goldman Sachs expects half the daily trading in shares on its Sigma-X Europe trading platform to shift over time to its new Paris hub from London.

Cboe held a simulation exercise on Dec. 5 and Howson said this revealed its customers expect to shift all their trading in European shares to EU venues.

Another of London's top money spinners is its trade in trillions of euros in derivatives. This anomaly, which dates back to 1999 when Britain opted out of the euro's launch, has seen a dominant share of trading in euro-denominated swaps take place in the capital.

The Bank of England has warned that trade in interest rate swaps worth around $200 billion could be disrupted, because banks operating in Britain and the EU must trade inside their own jurisdiction, or on approved platforms in New York. 

KLCI bucks regional trend, retreats on mild profit-taking activity

The main index at Bursa Malaysia bucked the regional trend and retreated at midday break today on some mild profit-taking activity.

At 12.30pm, the FBM KLCI was down 6.16 points to 1,637.74. The index had earlier risen to a high of 1,645.76.

Losers led gainers by 383 to 326, while 803 counters traded unchanged. Trading volume was 5.13 billion shares valued at RM2.28 billion.

The losers included Hartalega Holdings Bhd, Fraser & Neave Holdings Bhd, Supermax Corp Bhd, Greatech Technology Bhd, DKSH Holdings (M) Bhd, Batu Kawan Bhd, Top Glove Corp Bhd, JF Technology Bhd and Sarawak Consolidated Industries Bhd.

The actively traded stocks included Mestron Holdings Bhd, Iris Corp Bhd, AT Systematization Bhd, Puncak Niaga Holdings Bhd, Kanger International Bhd, Melewar Industries Bhd, Hiap Teck Venture Bhd and Sarawak Cable Bhd.

The gainers included Nestle (M) Bhd, CN Asia Corp Bhd, Carlsberg Brewery Malaysia Bhd, KESM Industries Bhd, Aeon Credit Service (M) Bhd and Petronas Gas Bhd.

Bloomberg said most Asian stocks rose with US and European futures Tuesday after the House backed higher stimulus checks following President Donald Trump’s signing of the virus relief bill.

The US dollar slipped with Treasuries, it said.

Inter-Pacific Research Sdn Bhd said Malaysian equities were mostly rangebound yesterday after giving up most of their intraday gains on quick profit-taking activities.

In its daily bulletin today, the research house said that for the most part, however, the market’s condition was indifferent due to the lack of direction and relatively light participation, even as it was an improvement over the previous session.

Nevertheless, it said market breadth was positive as retail players took the opportunity to trade on some of the laggards in the calmer market condition.

Inter-Pacific Research said it sees the mild bargain-hunting activities continuing over the near term, buoyed by the positive overnight performances of key global equity indices that rode on the US President’s signing of an economic stimulus package.

“This could allow the key index to build on the gains attained yesterday as we also think that rotational buying could pick up following the recent market consolidation.

“However, with market participation still on the thinner side, we also think that the gains may be modest with end-of-day profit-taking actions possibly limiting the upsides.

“As such, the 1,650 level continues to be the immediate hurdle, followed by the 1,660 level. The supports, on the other hand, are at 1,640 and 1,631 respectively.

“Conditions on the broader market are also looking positive with retail players continuing to nibble on selected lower liners that could provide more near-term impetus for these stocks to gain ground. As it is, retail players are positioning their portfolio for further upsides at the start of the new year, riding on hopes for an improved corporate earnings recovery in 2021,” it said.

KLCI pares gains as index-linked glovemakers retreat on vaccine rollout

Source - Theedgemarket

The main index at Bursa Malaysia pared some of its gains at the midday break Monday as index-linked glovemakers retreated following the rollout of vaccines in several countries.

At 12.30pm, the FBM KLCI was up 5.84 points to 1,647.01. The index had earlier risen to a high of 1,655.96.

Gainers led losers by 460 to 300, while 760 counters traded unchanged. Trading volume was 5.08 billion shares valued at RM2.15 billion.

The gainers included KESM Industries Bhd, Hong Leong Financial Group Bhd, Carlsberg Brewery Malaysia Bhd, Greatech Technology Bhd, Ajinomoto (M) Bhd, Malaysia Airports Holdings Bhd, CN Asia Corp Bhd, Kumpulan Powernet Bhd and Public Bank Bhd.

The actively traded stocks included AT Systematization Bhd, Iris Corp Bhd, Fintec Global Bhd, Land & General Bhd, Lion Industries Bhd and Hiap Teck Venture Bhd.

The top losers included Supermax Corp Bhd, Nestle (M) Bhd, Top Glove Corp Bhd, Careplus Group Bhd, Kossan Rubber Industries Bhd, Bursa Malaysia Bhd and Hartalega Holdings Bhd.

Reuters said global shares ticked up on Monday as a source said US President Donald Trump signed into law a US$2.3 trillion pandemic aid and spending package he had until now refused to sign.

US S&P futures last traded up 0.4%, it said.

JF Apex Securities Research said US stocks posted slight gains in thin trading on Thursday to wrap up the holiday-shortened week. 

It said European stocks closed mixed after a light trading session Thursday, as traders grew optimistic a Brexit trade deal would be reached.

“On the local front, the FBM KLCI lost 6.33 points or 0.38% to settle at 1,641.17 points. Market breadth was negative with 587 losers compared to 514 gainers.

“We expect the local bourse to be muted this week, hovering between the support level of 1,615 points and the resistance level of 1,695 points, as investors away for year-end holidays,” it said.

KLCI Ends Morning Session Lower

 KUALA LUMPUR (Dec 24): Bursa Malaysia ended the morning session easier as profit taking emerged ahead of the long weekend break.

At the lunch break, the benchmark FBM KLCI had slipped 4.96 points to 1,642.54 after moving between 1,639.32 and 1,649.71 throughout the morning trading session.

On the broader market, losers led gainers 559 to 451, while 836 counters were unchanged, 302 untraded and 38 others suspended.

Volume stood at four billion units worth RM1.63 billion.

Among the heavyweights, Malayan Banking Bhd (Maybank) eased two sen to RM8.47, Petronas Chemicals Group Bhd (PetChem) lost seven sen to RM7.51, Top Glove trimmed five sen to RM6.51, Hartalega gave up 18 sen for RM12.54 and Public Bank Bhd was flat at RM20.60.

Meanwhile, after its announcement of a six-month electricity rebate for users starting Jan 1, 2021 yesterday, Tenaga Nasional Bhd (TNB) saw its shares falling by four sen to RM10.64.

Among the actives, AT Systematization added 2.5 sen to 19 sen, Marine & General Bhd (M&G) perked 12.5 sen to 20 sen, Iris Corp Bhd bagged four sen to 42 sen, while both Fintec Global Bhd and Techna-X Bhd slipped half a sen each to nine sen and 14.5 sen respectively.

On the index board, the FBM Emas Index was 24.13 points easier at 11,812.72, the FBMT 100 Index fell 27.3 points to 11,573.5, the FBM Emas Shariah Index gave up 29.5 points to 13,277.99, and the FBM 70 shed 5.95 points to 15,093.49.\

However, the FBM ACE chalked up 97.29 points to 10,750.84. 

The Industrial Products and Services Index added 0.11 of a point to 175.58, the Plantation Index appreciated 43.7 points to 7,411.19 and the Financial Services Index gained 3.8 points to 15,295.44.

FBM KLCI charges ahead, up 15 points

 

KUALA LUMPUR: Gains from index-linked counters propelled the FBM KLCI to close higher alongside with the positive sentiment across the regional market on Wednesday.

At 5pm, the 30-stock index rose 15.58 points or 0.95% to 1,647.50 after opening 0.63 of-a-point lower at 1,631.55 this morning.

The market traded within a range of 25.06 points between an intra-day high of 1,652.59 and a low of 1,627.53 during the session.

Market breadth turned positive as gainers overpowered the losers on a ratio of 841-to-355 stocks. Traded volumes stood at 6.3 billion shares valued at RM3.41bil.

KLCI-component stocks were overwhelmingly in the positive, with 22 gainers, four decliners and four counters unchanged.

Dealers said sentiment was supported also by firmer key regional markets and local bourse was playing catching up after the recent bout of weakness.

Among the gainers, Heng Yuan rose 69 sen to RM5.69, KPower added 61 sen to RM6.55, Carlsberg gained 56 sen and Greatech advanced 52 sen to RM9.20.

KESM was the top loser on Bursa Malaysia, shedding 98 sen to RM12.30. F&N fell 94 sen to RM31.54, Petronas Gas declined 18 sen to RM17.30 and Supermax lost 13 sen to RM6.92.

Meanwhile, the ringgit was quoted at 4.0630, down 0.05% against the US dollar. The local currency was up 0.18% against the euro at 4.9528. It also declined 0.02% against the pound sterling at 5.4541 and down 0.18% against the Singapore dollar at 3.0475.

Brent crude futures fell 17 cents, or 0.34%, to US$49.91 a barrel while US West Texas Intermediate (WTI) crude futures slid 18 cents, or 0.38%, to US$46.84 a barrel.

Asia benchmark finished mostly higher today with Japan’s Nikkei 225 Index rose 0.33% to 26,524.79.

South Korea’s benchmark Kospi rose 26.14 points, or 0.96%, to 2,759.82, the sharpest daily gain since Dec 9, Reuters reported.

China’s Shanghai Composite index was up 0.76% at 3,382.32, while the blue-chip CSI300 index was up 0.85%.

Reuters reported that China's central bank will scale back support for the economy in 2021 and cool credit growth, but fears of derailing a recovery from a pandemic-induced slump and debt defaults are likely to prevent it from tightening any time soon, policy sources said.

Bursa Malaysia higher at midday as sentiment turns positive

Bursa Malaysia ended the morning session on a firm note, with the key index staying in positive territory as sentiment in the market recovered following rising hope for a COVID-19 vaccine.

At lunch break, the benchmark FTSE Bursa Malaysia KLCI (FBM KLCI) rose 8.64 points to 1,640.56 after moving between 1,627.53 and 1,644.5 throughout the session.

The overall market breadth was positive with gainers leading losers 688 to 382, while 709 counters were unchanged, 369 untraded and 38 others suspended.

Volume stood at 3.72 billion units worth RM1.82 billion.

Pharmaceutical company AstraZeneca announced that the first deliveries of its COVID-19 vaccine, AZD1222, to Malaysia would likely be in the first half of 2021.

Country president Dr Sanjeev Panchal, in a statement, said the company would be providing 6.4 million doses of its vaccine at no profit.

Among the heavyweights, Maybank added one sen to RM8.41, Public Bank rose 16 sen to RM20.62, Tenaga bagged four sen to RM10.62, Petronas Chemicals and Top Glove gained two sen each to RM7.43 and RM6.71, respectively, and Hartalega earned 10 sen to RM12.70.

IHH Healthcare, however, was flat at RM5.65.

Among the actives, Techna-X perked 1.5 sen to 16 sen, Jiankun slipped 10.5 sen to 58 sen, AirAsia X inched up half-a-sen to 7.5 sen, while FGV increased 10 sen to RM1.28 following news of the unconditional mandatory takeover offer from the Federal Land Development Authority (Felda).

On the index board, the FBM Emas Index was 76.9 points higher at 11,786.36, the FBMT 100 Index improved 73.39 points to 11,555.1, the FBM Emas Shariah Index earned 69.34 points to 13,250.68, the FBM 70 climbed 144.45 points to 15,052.23, and the FBM ACE surged 208.02 points to 10,685.22.

The Industrial Products and Services Index added 0.87 of-a-point to 173.36, the Plantation Index appreciated 62.35 points for 7,343.8 and the Financial Services Index bagged 111.34 points to 15,260.78. - Bernama

Get Expert Assistance for KLSE Market

Talk Here - http://bit.ly/whatsappfelixresearchs

Felda's RM1.30 Offer For FGV Shares Deemed Fair By Analysts

KUALA LUMPUR (Dec 23): Analysts are largely of the view that the Federal Land Development Authority's (Felda) RM1.30 offer price for shares in FGV Holdings Bhd is fair, given how the planter's shares have performed over the past year.

CGS-CIMB regional head of agribusiness and head of research Ivy Ng said the offer price should not be compared against FGV's initial public offering (IPO) price of RM4.55, as the planter had a different structure, and that market conditions were different then.

"I think minority [shareholders] should consider accepting the offer and reinvest in companies with higher potential return, as FGV's upside may be capped by the offer price of RM1.30," Ng told theedgemarkets.com.

Ng also noted there is still uncertainty surrounding FGV, particularly its land lease agreement (LLA) with Felda, where issues could arise over its termination and compensation terms. The LLA involves Felda-owned estates totalling 350,733ha, which were leased to FGV for 99 years from Nov 1, 2011.

Recall the Cabinet had previously given the green light for Felda to terminate the LLA with FGV, with Felda also wanting to take over the latter's oil palm mills. FGV is supposed to get compensation from the termination, although the group previously maintained that it still had not received any notice of the termination from Felda.

Meanwhile, Ng pointed out that major shareholders Retirement Fund Inc (KWAP) and Urusharta Jamaah Sdn Bhd — who each sold a 6.1% stake and a 7.78% stake respectively to Felda — would have done a great deal of analysis before parting with their stakes in FGV for RM1.30 apiece as well.

Similarly, an analyst who covers the plantation sector but declined to be named said minority shareholders should look at exiting the planter now with Felda's offer, as there is still a great deal of uncertainty when it comes to the LLA and the group as a whole.

"Of course if you bought [FGV] at RM4.55 [a share], this offer would be below your investment cost, however, if you bought at when FGV was trading at, say 80 sen to RM1 a piece, there is a definite upside when it comes to the offer price," the analyst said.

Felda's RM1.30 offer for each FGV share is a steep 71.43% discount to the planter's IPO price of RM4.55. When contrasted against its one-year low of 72 sen on March 19, however, the offer is at an 80.56% premium.

FGV topped Bursa Malaysia's most active list and rose among leading gainers in morning trade today after the plantation group said yesterday it had received an unconditional mandatory takeover offer notice at RM1.30 a share from Felda, which intends to delist FGV from the local bourse.

Felda's takeover offer for FGV became unconditional after the collective FGV shareholding of Felda and persons acting in concert with it rose past 50%. FGV's delisting will happen if Felda and its associates are able to acquire in aggregate 90% or more of FGV's shares in the takeover.

The announcement came after Felda completed the proposed share acquisition announced on Dec 8. Its shareholding in FGV had increased to 50.49% from 36.61% previously. Hence, the conditional mandatory takeover offer, which was also unveiled on Dec 8, is now an unconditional offer.

At the offer price of RM1.30 a share, FGV is valued at some RM4.75 billion based on its issued share capital of about 3.65 billion.

As at 3.50pm, FGV was trading just two sen below the offer price, at RM1.28 — up 10 sen from the previous day's closing — with 188.38 million shares traded, giving it a market capitalisation of RM4.67 billion.

ESG concerns take some shine off Top Glove

 

ANALYSTS remain positive on Top Glove Corp Bhd despite the environmental, social and governance (ESG) concerns that have emerged over the glove maker’s staff living quarters.

While they imputed a discount on their target prices for Top Glove because of this, most of the analysts have maintained their bullish calls on the company following the release of its results for the first quarter ended Nov 30 (1QFY2021) — it posted a record net profit of RM2.38 billion on its highest ever quarterly revenue of RM4.76 billion.

RHB Investment Bank, for example, has maintained its “buy” call on Top Glove but ascribed a 10% ESG discount to its target price and cut its ESG score for the group to 2.78 (from 3.22) on lower points for the Social or “S” component.

CGS-CIMB, while maintaining its “add” call, has cut its target price on the rubber glove giant by 11% to RM8.90 per share from RM10 previously. The cut was premised on a lower price-to-earnings ratio of 16 times for calendar year 2022 from 17 times previously to account for ongoing concerns over the ESG issues, particularly in relation to its foreign workers.

Maybank Investment Bank’s target price of RM8.65 for Top Glove assumes a higher weighted average cost of capital as it takes into consideration the social compliance issues.

Meanwhile, the Employees Provident Fund (EPF), which emerged as Top Glove’s substantial shareholder on Sept 21 with a 5.05% stake, has been trimming its shareholding in the glove maker. According to Top Glove’s filing with Bursa Malaysia on Dec 10, EPF sold 1.5 million shares on Dec 7, leaving the pension fund with a 5.56% direct stake comprising 445.65 million shares in Top Glove. Since Dec 1, EPF has divested a total of 22.14 million shares in the company.

Industry observers believe ESG concerns may be the main reason for EPF’s divestment of Top Glove shares.

Sell-off Continues as Covid-Risk Fears Intensify

 KUALA LUMPUR: Bursa Malaysia took another drubbing as the negative sentiment surrounding the discovery of a new strain of coronavirus weighed on global equities and oil prices.

Reuters reported that countries have shuttered their doors to Britain following news that the new strain of virus found in the country was up to 70% more transmissible than the original.

At 12.30pm, the benchmark FBM KLCI was down 16.94 points to 1,630.95. Market breadth was overwhelmingly negative with 989 declining counters on the market versus 232 gainers.

Financial heavyweights led the fall on the index with Maybank sliding 11 sen to RM8.37, Public Bank dropping 18 sen to RM20.48, CIMB losing 15 sen to RM4.15 and Hong Leong Bank shedding 12 sen to RM18.46.

Some attention returned to glove stocks given the prospect of a worsening crisis as Top Glove rose one sen to RM6.63 and Hartalega added six sen to RM12.56.

Among Petronas-related counters, Petronas Gas dropped 24 sen to RM17.32, Petronas Chemicals fell 21 sen to RM7.33 and Petronas Dagangan lost six sen to RM21.

On a sectoral basis, the Bursa Malaysia Energy Index was among the worst hit with the sector falling 1.8% as crude oil prices extended their slide on the prospect of more economic shutdowns.

Brent crude was down 24 cents or 0.5% to US$50.67 a barrel while WTI crude dropped 31 cents or 0.65% to US$47.66 a barrel.

The Bursa Malaysia Financial Services Index slid 1.5% and construction shed 1.7%.

The Technology Index held up relatively well with only a 0.7% decline.

Of actives, Technax slid two sen to 14.5 sen, Iris rose one sen to 40 sen and Bintain Kinden added 9.5 sen to 76 sen.

In Asian markets, the MSCI Asia Pacific ex-Japan Index slid 0.5%

Japan's Nikkei was down 0.7% and South Korea's Kospi dropped 0.4%.

China's benchmark index fell 0.2% while Hong Kong's Hang Seng lost 0.1.

Australia's ASX 200 slid 1.25%.

Weak sentiment continues to weigh on KLCI at midday

Worries over a new strain of Covid-19, coupled with weak oil prices, continued to weigh on investor sentiment, dragging Bursa Malaysia to end the morning session broadly lower.

At the lunch break, the benchmark FBM KLCI was 16.94 points or 1.03% lower at 1,630.95 after moving between 1,627.22 and 1,647.36 throughout the morning session.

The overall market breadth was negative with losers overtaking gainers 989 to 232, while 375 counters were unchanged, 541 untraded and 17 others suspended.

Volume stood at 5.45 billion units worth RM2.65 billion.

Malacca Securities Sdn Bhd said in a note that the negative sentiment from the new virus strain might spill over to stocks on the local front.

The research firm expected trading interest to revolve around construction and building materials as well as property sector amid the potential Kuala Lumpur-Singapore High Speed Rail (HSR) news flow coupled with the rising building material prices.

“Also, we expect the vaccine distribution candidate may surface as the health minister stated that [the government] will try to get all the vaccine supplies by the first quarter of 2021,” it said.

Among the heavyweights, Malayan Banking Bhd (Maybank) and IHH Healthcare Bhd fell 11 sen each to RM8.37 and RM5.64 respectively, Public Bank Bhd lost 18 sen to RM20.48, Tenaga Nasional Bhd (TNB) erased 10 sen to RM10.58 and Petronas Chemicals Group Bhd (PetChem) declined 21 sen to RM7.33.

However, Top Glove Corp Bhd rose one sen to RM6.63 and Hartalega Holdings Bhd gained six sen to RM12.56.

Among the actives, Techna-X Bhd trimmed two sen to 14.5 sen, Iris Corp Bhd added one sen to 40 sen, Bintai Kinden Corp Bhd increased 9.5 sen to 76 sen, and Vivocom Intl Holdings Bhd fell nine sen to 89 sen.

On the index board, the FBM Emas Index was 132.55 points lower at 11,716.27, the FBMT 100 Index lost 128.07 points to 11,486.1, the FBM Emas Shariah Index erased 106.12 points to 13,180.42, the FBM 70 contracted 201.01 points to 14,957.31, and the FBM ACE reduced 45.22 points to 10,433.23. 

The Industrial Products and Services Index shrank 2.69 points to 172.27, the Plantation Index gave up 47.26 points for 7,310.93 and the Financial Services Index dropped 224.0 points to 15,159.58.

Meanwhile, Bursa in a statement announced the transfer of Greatech Technology Bhd's shares from the ACE Market to the Main Market under the technology sector.

In a statement, it said the transfer would take effect on Dec 28, 2020 at 9am.

KLCI extends profit-taking as year-end approaches

KUALA LUMPUR: The FBM KLCI ended Monday on a negative note, its third straight day of losses as profit-taking continued ahead of the year-end holiday season and fears of a new strain of coronavirus threatened the global recovery outlook.

At 5pm, the key index ended 4.6 points lower at 1,647.89, after having lost over 10 points earlier in the day.

Trading volume was 8.09 billion shares valued at RM3.67bil. Market breadth was negative with 848 decliners compared to 394 gainers.

An analyst speaking to StarBiz said the profit-taking in recent days was owing to thinning liquidity ahead of the coming festivities, especially after a strong rally in November.

Meanwhile, he believes that the euphoria surrounding the roll out of the Covid-19 vaccines could have been priced in for the short term.

"November and December data are starting to reflect the recent spike in Covid-19 cases and impact from targeted lockdown reimplementation," he added.

Over the next two days, the price action in the market could signal bullish investors' sentiment as seen during 2018's year-end rally.

"While investors had turned positive in 2018 due to the Fed's dovish turn on interest rates, market participants could similarly be energised by the US$900bil US fiscal stimulus this time around.

"On the flipside, given the already elevated share prices, market players could stay on the sidelines until 1H 2021," he said.

Bank stocks, which have been a driver of the market's rally earlier in the week, were seen mixed amid the broader retreat.

Maybank was up two sen to RM8.48, Public Bank rose two sen to RM20.66, CIMB dropped eight sen to RM4.30 and Hong Leong Bank was flat at RM18.58.

Global stocks were also seen stumbling on news that UK and other parts of Europe could face new lockdown measures following the discovery of a fast-spreading strain of the coronavirus.

The prospect of new economic shutdowns offset the news that US policymakers had reached a deal for a US$900bil relief package, resulting in mixed results in Asian markets.

MSCI index of Asia-Pacific shares ex-Japan slipped 0.2% after hitting successive new highs last week.