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Author: MalaccaSecurities   |   Latest post: Fri, 26 Nov 2021, 9:16 AM


Mplus Market Pulse - 13 Oct 2021

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Still on the ascend

Market Review

Malaysia:. The FBM KLCI (+0.8%) recovered all its intraday losses to record its sixth straight winning session, lifted by gains in selected banking and telco heavyweights. The broader market and lower liners were mostly upbeat, anchored by the telecommunications & media sector (+1.5%).

Global markets:. The US stock markets endured another choppy session as the Dow contracted 0.3% after the International Monetary Fund slashed US economy growth projection to 6.0% in 2021 (earlier projection at 7.0%). European stockmarkets were mostly downbeat, while Asia stockmarkets also finished mostly lower.

The Day Ahead

Bucking the regional markets, the FBM KLCI extended its winning streak for the sixth session, buoyed by persistent buying interest in index-linked banking and telecommunication heavyweights on the back of positive sentiment in tandem with the rising foreign buying interest. Despite the overnight negative performance on Wall Street, we believe the local bourse may remain bullish over the near term and move closer to the 1,600 psychological level, supported by the reopening of economic activities as vaccination rate of adult population has achieved above 90%. Meanwhile, commodities wise, both the CPO and crude oil prices saw a pullback as inflation concerns picked up.

Sector focus:. Whilst the energy and plantation sectors staged a mild pullback, they should remain under the limelight over the mid-term amid the elevated commodities environment. Besides, recovery theme sectors such as banking and construction as well as property may continue their uptrend move.

 FBMKLCI Technical Outlook


The FBM KLCI finished at intraday high, crossing above its immediate resistance level at 1,580 and the SMA200 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI is trending higher above 50. The next resistance is envisaged at 1,600, while the support is set at 1550.

Company Brief

Genting Malaysia Bhd (GenM) is injecting another US$150.0m (RM625.0m) into its US-based unit Empire Resorts Inc mainly for the repayment of short-term debts. It is contemplating a long-term financing plan, with the proceeds to be used to partly repay existing indebtedness of US$365.0m and pay for financing-related expenses. Additionally, GenM is welcoming all guests from across Malaysia to visit its Resorts World Genting (RWG) after interstate travel resumed on 11th October 2021 with all its employees are fully vaccinated and ready to serve guests in a safe environment at RWG. (The Edge)

AirAsia Group Bhd digital businesses which have a valuation of over US$1.00bn (about RM4.17bn) have achieved the unicorn status in record time at under two years since the group accelerated the growth momentum of its non-airline businesses during the Covid-19 pandemic-driven aviation sector downturn. This in response to a 5th October 2021 Credit Suisse report which highlighted AirAsia Digital as one of three ASEAN unicorns based in Malaysia, alongside Carsome Sdn Bhd and Axiata Group Bhd's 63.0%-owned subsidiary edotco. (The Edge)

The Employees Provident Fund (EPF) has sold its entire stake in IJM Plantations Bhd amounting to 109.7m shares or a 12.5% stake in the company to Kuala Lumpur Kepong Bhd (KLK) on 7th October 2021. At KLK's offer price of RM3.10 per share, the fund would have pocketed RM340.0m from the sale. (The Edge)

MY EG Services Bhd (MYEG) has signed a memorandum of understanding (MoU) for the international extension of China's national blockchain network Xinghuo Blockchain Infrastructure and Facility (BIF). The MoU was signed with the Institute of Industrial Internet and Internet of Things of the China Academy of Information and Communications Technology (CAICT). (The Edge)

Axiata Group Bhd, Celcom Axiata Bhd and Celcom Mobile Sdn Bhd have applied to strike out a lawsuit by three Tune Talk Sdn Bhd shareholders who are challenging the proposed Celcom-Digi merger. The three shareholders — Padda Gurtaj Singh, East Pacific Capital Pte Ltd and Tune Strategic Investments Ltd are seeking for Axiata to be prohibited from including 5.3m Tune Talk shares (representing a 35.0% stake) registered in the name of Celcom Axiata in the proposed merger with Digi.Com Bhd. (The Edge)

Tan Chong Motor Holdings Bhd and Xiamen King Long United Automotive Industry Co Ltd have mutually agreed to terminate MoU signed within relation to the exclusive rights to distribute the latter's Kinggo microbus model in Vietnam in both completely built-up and completely knocked-down forms. (The Edge)

CN Asia Corp Bhd is looking to explore opportunities in poly green energy and drones technology, having entered into a 12-month memorandum of agreement with Poly China United Capital Holdings Ltd to achieve two objectives. The first is to market the various systems and products offered by Poly to customers and users in Malaysia and Southeast Asia. The other objective is to provide the relevant support to Poly including tendering, licensing, procurement, construction and commissioning. (The Edge)

Jade Marvel Group Bhd has proposed a private placement of up to 20.0% of its issued shares to raise as much as RM22.4m mainly for its frozen food processing and moneylending businesses. The placement at an issue price to be determined later may involve the issuance of up to 43.1m new Jade Marvel shares. (The Edge)

Boustead Heavy Industries Corp Bhd (BHIC) has appointed Lembaga Tabung Angkatan Tentera (LTAT) chief executive officer Datuk Ahmad Nazim Abdul Rahman as its non-independent and non-executive director. Nazim, 46, has been the CEO of LTAT since 15th June 2021 and has two decades of experience in corporate management, corporate finance and investment. (The Edge)

Lion Industries Corp Bhd's 99.0%-owned subsidiary Amsteel Mills Sdn Bhd is selling the latter's 100.0% stake in Antara Steel Mills Sdn Bhd to Esteel Enterprise Pte Ltd for approximately US$158.8m (about RM663.9m). The all-cash deal will enable Lion Industries to unlock the value of Antara Steel for a disposal gain of around RM403.1m. (The Edge)

Bintulu Port Holdings Bhd has bagged a five-year contract from See Song & Sons Sdn Bhd for maintenance dredging works at Samalaju Industrial Port in Bintulu, Sarawak worth RM25.3m. (The Edge)

Ni Hsin Group Bhd is planning to venture into the business of producing advanced battery for electric motorcycles. Ni Hsin has entered into heads of agreement (HoA) with MNA Energy Sdn Bhd to discuss the proposed venture. MNA Energy is principally engaged in the business of producing Battery Energy Storage Systems for Electric Mobility and Stationary applications. (The Star)


Source: Mplus Research - 13 Oct 2021

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