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Author: MalaccaSecurities   |   Latest post: Fri, 22 Oct 2021, 9:04 AM

 

Mplus Market Pulse - Sentiment turns jittery

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Market Review

Malaysia:. The FBM KLCI (-0.4%) recorded its third straight decline, dragged down by healthcare and plantation heavyweights. The lower liners were also downbeat, while all the transportation & logistics sector (+0.1%) was the only sweet spot on the broader market.

Global markets:. The US stockmarkets rebounded from their recent slump as the Dow (+0.8%) snapped a 5-day losing streak, ahead of the key inflation data that will provide clues on the timing of interest rate hike. European stockmarkets advanced, while Asia stockmarkets finished mostly lower. The Day Ahead Tracking the overall negative regional performances, the FBM KLCI dipped for a third straight session amid sour market sentiment on heavy selling in selected heavyweights led by TOPGLOV. However, tracking the positive rebound on Wall Street, coupled with the stability in the political landscape following the MoU inked between the federal coalition and Pakatan Harapan yesterday, we believe the recent bashed down in broader market may to be cushioned out by potential bargain hunting activities at least for this week. Commodities wise, both the CPO and crude oil prices advanced, while aluminium prices continue to charge higher.

Sector focus:. Bargain hunting activities may continue in the recovery theme stocks such as banking, consumer, and tourism, especially in the domestic travel segments. Besides, investors may trade plantation and oil & gas counters amid firmer commodities prices. Also, aluminium related counters should trade actively at least for the near term.

FBMKLCI Technical Outlook

The FBM KLCI marked third session decline but managed to close above the daily EMA20 level after dipping below it throughout the session. Technical indicators remained mixed as the MACD Histogram has extended a red bar, while the RSI hovered above the 50 level. Support is pegged around 1,560, while the resistance is located at 1,600.

Company Brief

Scientex Bhd has proposed to launch a takeover of its subsidiary, Daibochi Bhd remaining shares and warrants of that it does not already own at an offer price of RM2.70 per share and 32 sen per warrant, totalling RM345.3m. The proposed exercise entails buying 124.8m Daibochi shares, representing 38.1% of the total issued shares and 26.1m warrants, representing 95.8% of the outstanding Daibochi warrants. Scientex intends to finance the offer consideration through a combination of internally generated funds and bank borrowings. The offer is expected to be completed by 4Q21. (The Star)

Sunway Bhd, through its joint-venture vehicle with Singapore developer Hoi Hup Realty, has won a competitive bid for the en-bloc acquisition of Flynn Park, a condominium development in Yew Siang Road, Singapore with a bid of S$371.0m (RM1.15bn). Sunway Property and Hoi Hup intend to redevelop the site into a modern private residential condominium, leveraging on the multiple strengths of its location. (The Star)

Gagasan Nadi Cergas Bhd aims to take on more construction jobs by tendering for projects in excess of RM1.70bn in the coming year. The tender book consists of bids from the private and public sectors, including essential projects such as hospitals and healthcare facilities. (The Edge)

Hup Seng Industries Bhd has announced that its Johor factory has resumed operations after thorough disinfection was carried out. Its wholly-owned subsidiary Hup Seng Perusahaan Makanan (M) Sdn Bhd (HSPM) located in Kawan Perindustrian Tongkang Pecah, Batu Pahat, Johor, had received notice from the Ministry of Health (MoH) to resume its operations commencing 12th September 2021. (The Edge)

Pharmaniaga Bhd has cautioned that any analysis on the raw data of the effectiveness of Covid-19 vaccines, which include fatalities amongst the vaccinated population, released by the Ministry of Health (MoH) must use the standard scientific methodology and framework, as well as be peer-reviewed. This is to ensure the interpretation of the data is accurate and to avoid erroneous speculation, as well as the risk of bias which can cause more harm than benefit to the national vaccination efforts. (The Edge)

UMW Holdings Bhd posted a 351.9% MoM leap in automotive sales to 9,512 units in August 2021 from 2,105 units in July 2021, after operations resumed following the easing of the Full Movement Control Order (FMCO) restrictions. Both UMW Toyota Motor (UMWT) and its associate company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) registered improved sales although operations at its showrooms and assembly plants resumed only on 16th August 2021. (The Edge) Bermaz Auto Bhd’s (BAuto) 1QFY22 net profit rose 11.0% YoY to RM10.3m, on improved operational margins. Revenue for the quarter, however, declined 28.5% YoY to RM320.8m. A dividend of 0.5 sen per share for the quarter, payable on 5th November 2021 was declared. (The Edge)

George Kent (Malaysia) Bhd has not received any offer from Malaysian Resources Corp Bhd (MRCB) to acquire its stake in the Light Rail Transit Line 3 (LRT 3)project. This is in response to The Edge Weekly article that George Kent was also not aware that the Ministry of Finance (MoF) favours MRCB’s acquisition of George Kent's stake in the MRCB George Kent Sdn Bhd. (The Edge)

 

Source: Mplus Research - 14 Sept 2021

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