MY Morning Wrap | Analysts Remain Upbeat on Banking Sector in 2H2023

The $S&P 500 Index(.SPX.US)$ fell 1.4%, while the tech-heavy $Nasdaq Composite Index(.IXIC.US)$ lost 2.2%, its worst one-day performance since February. The $Dow Jones Industrial Average(.DJI.US)$ shed 348 points, or 1%, dragged down by shares of Intel and Microsoft. The declines followed a global selloff in markets in Europe and Asia.

$GENTING(3182)$ and $GENM(4715)$: RAM Rating Services Bhd (RAM Ratings) has affirmed the AA1/Stable/P1 ratings of Genting Bhd and Genting Malaysia Bhd (GenM) as well as the issue ratings of their debt programmes. The rating agency said the affirmation was supported by its expectation that the group's performance and financial profile would steadily improve over the next three years. In a statement today, it said Genting met the thresholds for its ratings a year earlier than anticipated in the financial year ended Dec 31, 2022.

$QL(7084)$: QL Resources Bhd's plan to build a new surimi-based production plant in Hutan Melintang, Perak, is expected to be a growth catalyst for the group's marine products manufacturing division. The proposed plant is expected to be built at the food manufacturer's 200-acre plot of land next to its existing plant. According to Hong Leong Investment Bank (HLIB) Research, the capital expenditure (capex) budgeted for the project is RM500mil.

$GAMUDA(5398)$: Engineering and construction company Gamuda has managed to arrest the sell down of the counter on Monday triggered by news on the potential cancellation of the Metro West project in Australia. On Monday (July 31), the counter dropped 20 sen to RM4.30 with 37.3 million exchanging hands. However, the counter rose to RM4.34 with 14.4 million shares traded Tuesday. In a report released Tuesday, Kenanga Research had viewed the Monday sell down as a ‘good buying opportunity’.“We believe Gamuda's tunnelling package for the project has passed the point of no return at 40% completion,” it said, maintaining its ‘Outperform’ call on the counter, with a target price of RM5.15. The stock hit a 52-week high of RM4.59 and a 52-week low of RM3.48.

$HIBISCS(5199)$: HIBISCUS Petroleum Bhd's subsidiary, Anasuria Hibiscus UK Limited, has been granted development and production works consent for the field development plan (FDP) of the Teal West field in its North Sea operations by the North Sea Transition Authority (NSTA) on August 1. With the consent, it told the bourse today that Anasuria Hibiscus UK Limited can now proceed to the next stage, which is the internal final investment decision. Once this decision is reached, it will pave the way for the production phase, with first oil expected to flow from the Teal West field by late 2024 or early 2025.

$MRCB(1651)$: Malaysian Resources Corp Bhd (MRCB) is set to be involved in the redevelopment of the transportation hub Kuala Lumpur Sentral (KL Sentral), according to Transport Minister Anthony Loke. In a press conference, Loke announced that the Cabinet has approved, in principle, the redevelopment of KL Sentral. He disclosed that the project will be done via privatisation at a cost estimated to be more than RM1 billion, which will be borne by MRCB. In return, MRCB would be given the rights to develop the area above the station with commercial and residential buildings. Meanwhile, MRCB, in its filing, said that it will make the appropriate and timely announcements to Bursa Securities as and when the terms of the privatisation have been finalised.

$MI(5286)$: The legal dispute between Mi Technovation Bhd (Mi Technovation) and Edelteq Holdings Bhd (Edelteq) has escalated, with the conflict centering around allegations of breach of intellectual property rights. The tension between the two companies reached a new level as Mi Technovation filed a writ against Edelteq and its ED and group CEO, Chin Yong Keong, along with several other defendants. The dispute, which was brought to the Penang High Court on July 19, 2023, involves claims of breach of confidential information, copyright infringement, patent infringement, conspiracy to injure, and unlawful interference with trade.

$HIAPTEK(5072)$: Hiap Teck Venture Bhd said its 27.3%-owned joint venture (JV) company, Eastern Steel Sdn Bhd (ESSB) — has ignited its newly completed 1,380 cu m blast furnace plant on Tuesday (Aug 1). Hiap Teck shared that with the successful ignition of the new blast furnace, ESSB’s production capacity will increase from the current 700,000 tonnes of steel slabs and billets to 2.7 tonnes annually.

$MUDAJYA(5085)$: Mudajaya Group Bhd via its wholly owned Mudajaya Corp Bhd has secured a contract worth RM195.1 million for works related to the East Coast Rail Link (ECRL) in Terengganu from the development's main contractor, China Communications Construction (ECRL) Sdn Bhd. Mudajaya Corp will undertake the construction and completion of stations, ancillary buildings and other associated works for the rail project. The project is targeted to be completed by 2026, with a construction period of 32 months from the date of site possession.

$GIIB(7192)$: Bursa Securities has rejected GIIB Holdings Bhd's proposed private placement, citing pending charges against several of its directors under the Malaysian Anti-Corruption Commission (MACC) Act 2009. According to GIIB's filing, Bursa Securities took note that there are certain charges made against certain directors of GIIB pursuant to the MACC Act of which the matters are still pending the decision by the court, and as such, Bursa Securities is unable to consider the group’s additional listing application. The rubber-related compounds manufacturer had in April proposed to undertake the private placement of up to 81.96 million new shares, or 10% of its issued share capital, to raise up to RM6.97 million for its working capital. In May, MACC remanded GIIB chief executive officer (CEO) Tai Boon Wee, together with executive directors Tai Qiyao and Wong Ping Kiong, relating to an invoice for a sum of RM24,000 issued by GIIB’s 51%-owned subsidiary GIIB Healthcare Products Sdn Bhd over the sale of gloves.

$VINVEST(0069)$: Technology and construction firm Vinvest Capital Holdings Bhd has initiated a civil action in the High Court over the alleged loss of its shares in EA Holdings Bhd. The injunction application against EA Holdings Bhd was called up for hearing on Wednesday (Aug 2), and an interim injunction was granted by the court. Vinvest emerged as a substantial shareholder of EA Holdings in November 2021 after acquiring 1.1 billion shares or a 17.82% stake in the company, at 2.11 sen per share or a total of RM23.21 million.