*Maybank IBG Kopi-O (6 Jan 2022)*
Nikkei 29332.2 0.10%
Kospi 2954.0 -1.18%
SSE 3595.2 -1.02%
HSI 22907.3 -1.64%
TWSE 18500.0 -0.14%
SET 1676.8 0.39%
JCI 6662.3 -0.49%
STI 3163.4 -0.56%
KLCI 1548.0 0.39%
*Maybank IBG Key Calls*
*Sea Ltd - Tencent pares stake*
Sea’s share price fell 11.4% to USD197.84 following Tencent’s decision to pare its stake in the company from 21.3% to 18.7%. Sentiment for pre-earnings stocks tend to be fragile and this move adds to the overhang. Nevertheless, this does not take away long-term growth prospects given Shopee’s position as ASEAN’s top e-commerce player and potential from Garena Free Fire MAX. Maintain BUY and SOTP-TP of USD379.
*MY*
o The selloff in Wall Street overnight will likely drag the KLCI into a bearish mode again. Concerns over tightening monetary policy as well as the omicron variant will weigh on appetite for risky assets. That said, O&G and plantation stocks should continue to benefit from rising commodity prices. Technically, we expect the benchmark index to range between 1,530 and 1,560 today, with supports at 1,515 and 1,475.
o *Telcos*: The Ministry surprised the market last month with a willingness to review its 5G rollout model (having previously decided on a single government-owned wholesale network). The outcome of the review could have material longer-term implications to mobile telcos. In the near term however, the policy uncertainty would likely weigh on sentiment. Our sector picks remain *TM (T MK, BUY, CP: MYR5.49, TP: MYR7.40)* and *Axiata (AXIATA MK, BUY, CP: MYR3.90, TP: MYR4.50)*.
o *APB Resources (APBB MK)*: Its wholly-owned subsidiary Amalgamated Metal Corporation (M) S/B has received a MYR10.4m purchase order from Desmet Ballestra (SEA) Ptd Ltd, a company incorporated in Singapore. This is the first order secured in FY9/22 but management had in Nov 2021 highlighted that there is no indication of a pick-up in capital spending within the fabrication sector. APBB was loss making in three out of the past four years but it is sitting on a net cash of approximately MYR70.3m at end-Sep 2021, which is equivalent to about 89% of its market capitalization.
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