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The Week Ahead (01/03/2021)

The FBM KLCI finished 0.24% lower on Friday , as broader market sentiment was weighed down by the tech sell off on Wall Street, and weaker regional performance.

Read More: Bursa CFD Weekly

 

Global Economy

Japanese shares slumped on Friday, logging their biggest daily decline in nearly a year, after a spike in global bond yields spooked investors already uneasy about the market’s stretched valuation.

Hong Kong stocks ended sharply lower on Friday, in line with broader markets, posting their worst week in one year, as a rout in global bonds sent yields flying and dampened appetite for risky assets.

China stocks fell sharply on Friday to end the week lower, in line with global markets, with the blue chip index posting its worst week in 28 months, as a rout in global bonds sent yields flying and dampened appetite for risky assets.

The tech heavy Nasdaq index rallied in choppy trading on Friday, even as sentiment remained fragile after the index’s worst performance in four months the day before as fears of rising inflation kept U.S. bond yields near a one year high.

The S&P 500 ended little changed, while the Dow index closed lower after earlier dropping to a three week low. The Dow still posted gains of nearly 4% for the month, as investors bought into cyclical companies set to benefit from an economic reopening.

European stocks closed lower on Friday, ending three weeks of gains as investors booked profits in technology and commodity linked shares due to concerns over rising inflation and interest rates on the back of a jump in bond yields.

Gold tumbled 3% to an eight month low on Friday en route to its worst month since November 2016 as a stronger dollar and elevated U.S. Treasury yields hammered non yielding bullion’s appeal.

Oil prices fell on Friday as the U.S. dollar rose while forecasts called for crude supply to rise in response to prices climbing above pre pandemic levels.

Company in Focus

Tenaga Nasional Bhd’s net profit for the fourth quarter ended Dec 31, 2020 surged to RM1.21 billion from RM653.3 million a year earlier, due mainly to higher tax credit resulting from the claim of the reinvestment allowance incentive. Earnings per share rose to 21.27 sen from 11.49 sen.

On its prospects, Tenaga said while near term growth in 2021 will be affected by the stricter containment measures, the impact, however, will be less severe than that experienced in 2020.

Maxis Bhd’s net profit for the fourth quarter ended Dec 31, 2020 (4QFY20) dipped 9.63% to RM319 million from RM353 million a year earlier. In a bourse filing, the telco stated that its latest quarterly net profit was down on a year on year (y o y) basis following lower service revenue, due to the temporary lack of international roaming income on account of Covid 19, but this was offset by growth seen in its enterprise and fibre businesses.

Datasonic Group Bhd has bagged a contract worth RM4.33 million from the Ministry of Home Affairs. Its unit Datasonic Technologies Sdn Bhd had accepted a letter of award (LOA) from the ministry for comprehensive maintenance services of equipment, software and application of the facial live capture (FLC) image system at all issuing and receiving offices of the Immigration Department of Malaysia.

It said the contract is for a period of thirty six months from yesterday (Feb 25, 2021) to Feb 24, 2024. The group noted that the contract is subject to normal business risks, such as an increase in cost due to any escalation of material cost and contractual terms including default provisions.

RHB Bank Bhd reported a net profit of RM438.63 million in the fourth quarter ended Dec 31, 2020 (4QFY20) or earnings per share of 10.94 sen, a 29% drop from RM621.01 million or 15.49 sen per share in the previous year. RHB said the lower performance was due to net modification losses arising from the loan moratorium accorded to its customers and higher expected credit losses (ECL). However, this was partly mitigated by higher net fund based and non fund based income, it said.

The group’s gross loans and financing grew by 5.6% year on year to RM186.1 billion, mainly supported by growth in mortgage, auto finance, SME and Singapore.

Malaysia Airports Holdings Bhd slipped into the red in the fourth quarter ended Dec 31, 2020 (4QFY20) when it posted a net loss of RM685.02 million, from a net profit of RM29.51 million a year ago, as Covid 19 battered passenger movements. Consequently, it posted losses per share of 42.16 sen compared with earnings per share of 0.91 sen previously.

 

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