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Author: MalaccaSecurities   |   Latest post: Mon, 23 Nov 2020, 11:52 AM


Mplus Market Pulse - 5 Oct 2020

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Anchored by glovs heavyweights

Market Review

Malaysia: The FBM KLCI (+0.2%) managed to close higher on last Friday largely supported by glove heavyweights, despite two-third of the key index components were in red. The lower liners, however, ended lower, while the broader market also closed lower, with the exception of healthcare sector that outperformed by rising 2.2%.

Global markets: US stockmarkets closed sharply lower as the Dow (-0.5%) fell on US President Donald Trump’s positive Covid-19 test which has created further uncertainties surrounding the upcoming election. European stockmarkets edged higher, while Asia stockmarkets finished mixed.

The Day Ahead

Despite the FBM KLCI marched marginally higher, gains were mostly induced by recovery in gloves heavyweights. We reckon that the trend may continue over the foreseeable future amid the spike in Covid-19 cases locally, coupled with news that US President Donald Trump has also contacted the aforementioned virus. The lower liners and broader market, however, may continue to endure choppiness as volatility takes charge.

Sector focus: We continue to see the healthcare sector taking the lead on the back of the new wave of Covid-19 cases, both domestic and overseas. Meanwhile, the technology sector should trend firmer due to the rising demand on semiconductor/ electronic gadgets globally.

The FBM KLCI managed to recover all its intraday losses to edge higher, forming a hammer candle on last Friday. We believe any gains are likely to be capped with the immediate resistances located at 1,520, followed by 1,555. The support, meanwhile are remained at 1,480, followed by 1,450. Indicators have turned mixed as the MACD Histogram has turned green, but the RSI remains below 50.

Company Brief

Sunsuria Bhd has ventured into the development of a high-rise residential project in Bangsar and a high-rise mixed commercial project along Lorong Tuanku Abdul Rahman. Sunsuria will acquire a 51.0% stake in property developer BHP Development for RM8.4m. The agreement will see Sunsuria developing a parcel of residential development land measuring 4.0-ha along Lorong Maarof in Bangsar, which will be officially launched under the project name - Bangsar Hill Park with an estimated gross development value (GDV) of RM3.01bn and slated for completion by 2028.

Separately, Sunsuria also entered into a conditional shares sale and purchase agreement (SSPA) to acquire an investment holding company, Bumilex Construction Sdn Bhd for RM2. Bumilex, via its 51.0% subsidiary Montflex Sdn Bhd, owns the development rights over two plots of land along Lorong Tuanku Abdul Rahman in KL. Sunsuria plans to develop the land which measures 0.5-ha. with an estimated GDV of RM524.8m and scheduled for completion by end-2025. (Bernama)

Icon OFffshore Bhd has entered into a US$42.5m (RM177.0m) cash deal to buy the jack-up drilling rig Perisai Pacific 101. Icon was in talks with Perisai Petroleum Teknologi Bhd to acquire its subsidiary that owns and operates a drilling rig. The proposed acquisitions will provide the Icon Group with an additional source of income. (The Star)

Gagasan Nadi Cergas Bhd has bagged another project in Serendah, Selangor with a gross development value (GDV) of up to RM374.9m for nine years on 85.8-ac. of land. It signed a development rights agreement with Menteri Besar Inc (MBI) Selangor subsidiary Permodalan Negeri Selangor (PNSB). PNSB will be entitled to receive 15.5% of GDV or a minimum guaranteed development rights value of RM58.1 m over a nine-year development period. (The Edge)

Malakoff Corp Bhd CEO Datuk Ahmad Fuaad Mohd Kenali will resign from his post effectively 31st October 2020 to pursue other career opportunities. The 50-year-old joined the group in October 2017. His immediate predecessor was Habib Husnin, who took over the helm in July 2017. Prior to Habib, DRB-Hicom Bhd’s current managing director, Datuk Seri Syed Faisal Albar, was the CEO from July 2014 until end-2015. (The Edge)

DutaLand Bhd’s wholly-owned subsidiary Sea Resorts Development Sdn Bhd has obtained a money lending license from the Ministry of Housing and Local Government. The license will be valid for two years and is renewable upon expiry. (The Edge)

Sime Darby Plantation Bhd expressed concerns over a possible ban of its products by the US Customs and Border Protection (CBP), given the US is seen as a growing market. Annual exports stand at RM20.8 m. This came after products of FGV Holdings Bhd were prohibited from entering the US, following investigations into alleged use of forced labour. (The Edge)

Pelangi Publishing Group Bhd’s executive chairman and managing director Datuk Sum Kown Cheek, wife Datin Lai See Chiung, Sum’s brother Datuk Sam Yuen and spouse are seeking to take the group private via a selective capital reduction and repayment exercise. Entitled investors will get a capital payment of RM25.0 m or 36.5 sen. Sum and his family, who control a 38.9% stake in the group, do not intend to maintain Pelangi’s listing once the exercise is done, and have waived any entitlements from the exercise. (The Edge)

Source: Mplus Research - 5 Oct 2020

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