The Malaysian stock market opened the week in the green zone, extending gains from the previous session. The FTSE Bursa Malaysia KLCI, the main gauge of Malaysian stocks, opened higher and added 13.77 points to end 0.93% higher at 1,501.11 on Monday, January 8, 2024.
The market was supported by positive sentiment from the global and regional markets, as investors shrugged off concerns over inflation and the Omicron variant of COVID-19. The US Federal Reserve's dovish stance on monetary policy and the easing of lockdown measures in some countries also boosted market confidence.
Among the sectors, the finance, industrial, and technology sectors led the gains, while the plantation, property, and utilities sectors lagged behind. The market breadth was positive, with 591 gainers, 386 losers, and 430 unchanged counters.
One of the top performers on the market was XOX Bhd, a telecommunications service provider that offers mobile and digital services. XOX's share price rallied over 33% to close at 0.02 ringgit on Monday, after the company announced that it had secured a contract worth 1.2 billion ringgit from China Mobile International Ltd.
The contract involves the provision of mobile virtual network operator (MVNO) services to China Mobile's customers in Malaysia for a period of five years. XOX said that the contract would enhance its revenue stream and profitability, as well as strengthen its position as a leading MVNO in the country.
XOX also said that it had entered into a memorandum of understanding (MOU) with China Mobile to explore potential collaborations in areas such as 5G, cloud computing, artificial intelligence, and blockchain. XOX said that the MOU would enable it to leverage China Mobile's expertise and resources to enhance its products and services.
XOX has a market capitalization of 76 million ringgit and a negative price-to-earnings ratio of -1.13 as of January 8, 2024. XOX's share price has increased by 100% in the past year, outperforming the KLCI's 9.4% gain. XOX's share price has also been supported by its improved financial performance, as it reported a net profit of 2.4 million ringgit for the third quarter of 2023, compared to a net loss of 25.2 million ringgit for the same period in 2022.
Analysts are optimistic about XOX's prospects, citing its growth potential, competitive edge, and strategic partnerships. PhillipCapital analyst Darren Chan maintained his "buy" call on XOX, following the company's recent announcements. Chan's target price remains unchanged at 0.026 ringgit. Chan said that XOX's contract with China Mobile was a game-changer for the company, as it would boost its revenue and earnings significantly. Chan also said that XOX's MOU with China Mobile was a positive sign, as it would open up new opportunities and markets for the company.
The Malaysian stock market and XOX are expected to maintain their upward momentum, as the economic recovery from the COVID-19 pandemic and the demand for digital services remain strong. Investors who are looking for a high-growth and high-risk stock may want to consider adding XOX to their portfolio.
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