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Author: MalaccaSecurities   |   Latest post: Wed, 27 Oct 2021, 9:46 AM

 

Mplus Market Pulse - 24 Sept 2021

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Stability ensured

Market Review

Malaysia:. The FBM KLCI (+0.7%) recovered all its previous session losses, taking cue from the positive developments on Wall Street overnight as the key index was lifted by recovery in selected banking and plantation heavyweights. The lower liners extended their gains, while the broader market finished mostly upbeat.

Global markets:. The US stockmarkets extended their gains as the Dow climbed 1.5% to recoup all its weekly losses, boosted by optimism of economic outlook painted by the US Federal Reserve. Both the European and Asia stockmarkets finished mostly higher.

The Day Ahead

We think that there will be more immediate upsides for Malaysian equities towards the end of the week, on the back of the extended bargain hunting activities with the key index now finding stability at current levels. With further clarity on US fiscal policy direction and the calmer Chinese markets, this would help to provide some measure of stability after enduring a volatile spell over the past couple of weeks. Elsewhere, the broader market will be largely supported by rotational play with traders capitalising on the improvement in trading activities alongside with the positive market undertone.

Sector focus:. We reckon that the recovery theme sectors will remain as the focal point with nationwide adult population vaccination rate now above 80% level. The construction sector is poised for some limelight as construction activities gather pace, while the technology sector may trade higher, tracking the gains on Nasdaq overnight.

 FBMKLCI Technical Outlook

 

The FBM KLCI formed a gap up candle to close higher after hovering largely in the positive territory yesterday. Technical indicators have now turned mixed as the MACD Histogram has turned green, while the RSI remained below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged at 1,515.

 Company Brief

Yinson Holdings Bhd’s 2QFY22 net profit climbed 25.6% YoY to RM126.0m, boosted by higher contribution from its engineering business. Revenue for the quarter grew 5.9% YoY to RM1.05bn. An interim dividend payout of 4.0 sen a share, payable on 17th December 2021 was declared. (The Star)

Pan Malaysia Corporation Bhd (PMC) has proposed to acquire a 51.0% share in A&W (Malaysia) Sdn Bhd from Inter Mark Resources Sdn Bhd for RM21.0m. The acquisition would be satisfied via a combination of cash amounting to RM11.6m and a transfer of 63.1m PMC shares. (The Star)

KPower Bhd’s 4QFY21 net profit earnings slipped 19.1% YoY to RM5.9m, impacted by the Covid-19 pandemic. Revenue for the quarter, however, swelled 157.4% YoY to RM101.3m. (The Star)

CIMB Group Holdings Bhd's foreign shareholding rose to 22.4% in August 2021; the highest since June 2020. August 2021 foreign shareholding figure is also the highest so far this year, beating the high of 22.1% in the previous two months (June 2021 and July 2021). (The Edge)

Hock Seng Lee Bhd's (HSL) 2QFY21 net profit jumped 121.6% YoY to RM8.8m, thanks to stronger contribution from its construction segment. Revenue for the quarter gained 71.9% YoY to RM142.8m. (The Edge)

Bursa Securities has rejected Sapura Energy Bhd's application for a one-month extension to announce its latest quarterly results. The oil and gas outfit submitted its application on 14th September 2021 for the one-month extension until 30th October 2021. The group is required to file its results for the quarter ended 31st July 2021 by 30th September 2021. (The Edge)

Dagang NeXchange Bhd (DNeX), via its 90.0% owned subsidiary Ping Petroleum Ltd has announced the completion of the acquisition of the remaining 50.-% interest in the UK North Sea Block containing the Avalon Oil Development. The acquisition is from Summit Exploration and Production Ltd, a wholly-owned subsidiary of Sumitomo Corp, for an initial cash consideration of US$5.0m (RM21.1m) with further contingent payments, giving a total price of US$17.0m (RM71.7m). (The Edge)

United Malacca Bhd’s 1QFY22 net profit soared 486.5% YoY to RM20.8m, as higher crude palm oil (CPO) and palm kernel prices saw its Indonesian operations break even while Malaysian operations showed growth. Revenue for the quarter added 32.4% YoY to RM114.9m. (The Edge)

AirAsia Group Bhd expects a strong recovery for air travel in all key domestic destinations and for international flights to resume in the near future, complemented by stringent health and safety protocols that the airline has put in place. Following the government's announcement of the resumption of interstate travel and the reopening of tourism activities once the vaccination rate for adults reaches 90.0% in Malaysia, the budget carrier is geared up to fully restore its domestic and international services. (The Edge)

Latitude Tree Holdings Bhd's 4QFY21 profit surged 687.4% YoY to RM2.6m, on the back of higher revenue. Revenue for the quarter increased 55.9% YoY to RM216.0m. (The Edge)

Hextar Global Bhd has reported that its shareholders have approved the proposed acquisition of chemical derivatives, coating and related products manufacturer Nobel Group. It will now proceed to complete the acquisition and commence the integration of their business operations and is expected to contribute to its earnings from 4QFY21 onwards. (The Edge)

 

Source: Mplus Research - 24 Sept 2021

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