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Author: MalaccaSecurities   |   Latest post: Fri, 4 Dec 2020, 8:47 AM


Mplus Market Pulse - 15 Oct 2020

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Another jab from US Department of Labour

Market Review

Malaysia: The FBM KLCI (-0.1%) edged down after lingering in the negative territory, in tandem with the weakness in the overnight US stockmarkets. The lower liners, however, finished in green while the healthcare (+2.8%), technology (+0.8%), and industrial products & services (+0.4%) sectors outperformed the mostly red broader market.

Global markets: US stockmarkets extended their loss as the Dow (-0.6%) slid on Treasury Secretary Steven Mnuchin’s downbeat remarks that further stimulus package is unlikely to be reached before election day. European and Asia stockmarkets both ended mixed.

The Day Ahead

We reckon that the consolidation will remain a feature over the foreseeable future as the recent spike in Covid-19 cases may keep a lid on the prospects of economic recovery. US Department of Labour (DOL) move to add Malaysian rubber gloves to its latest list of goods produced with forced labour also trigger some profit taking to gloves heavyweights today. Elsewhere, the re-implementation of Conditional Movement Control Order saw trading activities turning up the heat again as rotational play are shifting towards the healthcare thematic space.

Sector focus: The energy sector may also garner some trading interests following the rise in crude oil prices after China step up their purchases from Middle East. The positive projection for global silicon wafer shipments to record high in 2022 may provide further trading opportunities within the technology sector.

The FBM KLCI retreated but much of the losses were contained as the key index formed a hammer candle to remain above the daily EMA120 level. The consolidation spell is likely to prolong with the immediate resistances remained at 1,540, followed by 1,555. Meanwhile, the supports are pegged at 1,490, followed by 1,480. Indicators have turned mixed as the MACD Histogram has turned red, while the RSI remains above 50.

Company Brief

VS Industry Bhd has entered into sale and purchase and construction agreements with Ipark Development Sdn Bhd to acquire six tracts of land with industrial buildings in Johor Bahru and Kulai for RM98.8m. The tracts which measure a combined 413,681 sqf, will increase production capacity for future expansion purposes, including capturing opportunities arising from the US-China trade tension. Following the acquisition, the group plans to relocate its headquarters to the properties. (The Star)

Malayan Banking Bhd (Maybank) chairman Datuk Mohaiyani Shamsudin will retire on 1st November 2020, and will be replaced by Tan Sri Zamzamzairani Mohd Isa. Zamzamzairani, who retired as the chairman of UEM Sunrise Bhd in July 2020 and has many years of experience in the telecommunications field. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) has reported that more international airlines have resumed their operations at the KLIA following effective Covid-19 safety measures. Passenger traffic movements at its airports across the country rose by 19.0% MoM to 1.7m in September 2020, while aircraft movements increased by 9.8% MoM to 27,010. Meanwhile, its operations at the Istanbul Sabiha Gokcen International Airport saw close to 2.0m passengers during the month, leading to the group registering 3.5 m passenger traffic movements. (The Edge)

Key Alliance Group Bhd has secured an exclusive agreement with South Korean company Wells Bio Inc, through its global distributor ITDF Co Ltd, which will allow it to supply Wells Bio's reverse transcription polymerase chain reaction (RT PCR) test kits to Malaysia and Singapore. The contract is renewable on a yearly basis automatically, providing exclusivity of the product in Malaysia and Singapore. (The Edge)

Handal Energy Bhd’s wholly-owned subsidiary Handal Cranes Sdn Bhd has bagged a contract to provide ad-hoc offshore crane operator services from Enquest Petroleum Production Malaysia Ltd. The tenure of the contract is for three years, starting 3rd August 2020, with an option to extend for one year. There is no specific value to the said contract. (The Edge)

Press Metal Aluminium Holdings Bhd has announced that the impact of the 38.2% anti-dumping duties imposed by the European Commission (EC) on its two Chinabased subsidiaries is minimal. The duties are only on extrusion products from the subsidiaries to the EU, which only accounts about 4.6% to the group’s revenue and about 2.8% to its profit after tax in FY19. (The Edge)

Advance Information Marketing Bhd (AIM) has received a notice of conditional voluntary takeover offer from Datuk Chai Woon Chet, who intends to acquire all the shares in AIM at 13 sen each. AIM has 242.0m issued shares and Chai does not hold any AIM shares. Chai intends to maintain AIM’s listing on the ACE Market. (The Edge)

Source: Mplus Research - 15 Oct 2020

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