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

 

Mplus Market Pulse - 14 Oct 2021

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Spurred by foreign buying

Market Review

Malaysia:. The FBM KLCI (+1.0%) climbed higher for the seventh session on a broad based rally with more than two thirds of the key index components advanced on the back of foreign buying. The lower liners ended mixed, while broader market closed mostly positive, led by the construction sector (+2.7%).

Global markets:. The US stockmarkets ended mostly higher as the Dow recovered all its intraday losses to finish flat, while the S&P 500 and Nasdaq rose 0.3% and 0.7% respectively boosted by gains in technology stocks with the US Federal Reserve officials looks to taper the stimulus by end of this year. Both the European and Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI closed above the 1,600 psychological level amid persistent buying from foreign funds over the past week and sentiment remained positive on the back of the discussion of international borders reopening going forward. The recovery theme sectors such as construction, building material and financial services sectors saw substantial gains and may remain under the limelight in the near term ahead of Budget 2022. Meanwhile, the plantation counters are gaining traction amid a jump in CPO price; the CPO price has rebounded and surged by 3.4% to close above the RM5,000 level.

Sector focus:. The plantation sector may attract buying interest with the CPO price charging to its all-time-high position. Besides, the recovery theme sector such as banking, consumer and construction may remain attractive under the economic reopening condition and may perform well ahead of the Budget 2022.

FBMKLCI Technical Outlook

 

The FBM KLCI crossed above the 1,600 psychological level amid the 7-day winning streak. Technical indicators remained positive as the MACD Histogram has extended a green bar, but the RSI is slightly overbought. The next resistance is pegged at 1,620-1,640, while the support is pegged along 1,580.

Company Brief

MyKris International Bhd has entered into a RM157.5m deal to dispose its high speed wireless and wired network services unit, the company's core business, to Maxis Bhd. The deal would require the approval of at least 75.0% its shareholders. The proposed disposal, if it goes through, would result in a potential pro forma gain of RM102.0m for MyKris. The proposed acquisition was targeted for completion in 1Q22. (The Star)

Sarawak Consolidated Industries Bhd has secured a RM13.3m job from Sarawak Public Works Department to redeveloped two schools near Sibu, Sarawak. The redevelopment projects were expected to take eight months to complete from October 2021 to June 2022. On a separate announcement, SCIB has priced the third tranche of its placement shares of 56.0m at 38.39 sen each. Proceeds from the private placement of around RM21.5m will be used for upcoming projects as well as funding for ongoing projects. (The Star)

UMW Holdings Bhd's automotive sales rose to 22,193 units in September 2021 compared with 9,512 units sold in August 2021 as operations gradually normalised. Both UMW Toyota Motor (UMWT) and its associate company Perusahaan Otomobil Kedua Sdn Bhd (Perodua) continued to ramp up production to hasten delivery of outstanding orders. (The Edge)

FGV Holdings Bhd aims to capture a 3.5% share of the local fragrant rice market by the end of 2025 under the group's household brand Saji. This would be made possible with the implementation of the Fortified Field Fragrant Rice programme by its subsidiary FGV Integrated Farming Holdings Sdn Bhd, which optimises local fragrant rice paddy farming through smart and effective agricultural practices and technologies. (The Edge)

Solarvest Holdings Bhd has transferred its listing status to Bursa Malaysia's Main Market, becoming the first pure-play solar company in the market. This marks a significant milestone not only for Solarvest but also for the renewable energy industry in Malaysia. (The Edge)

Selangor Dredging Bhd's 31.0%-owned indirect Singapore-listed associate Fortress Minerals Ltd's subsidiary Fortress Resources Pte Ltd (FRPL) has entered into a new 15-month offtake agreement for iron ore with a third-party domestic steel mill (DSM) in Malaysia. Under the deal, FRPL will deliver to DSM 375,000 wet MT of iron ore from 11th October 2021 to 31st December 2022. (The Edge)

Former CIMB Group Holdings Bhd chief financial officer (CFO) Shahnaz Farouque Jammal Ahmad has joined TIME dotCom Bhd as its CFO, with the new appointment effective on 13th October 2021. (The Edge)

Green Packet Bhd's wholly-owned subsidiary Green Packet Global Holding Sdn Bhd (GPGH) has aborted its plan to subscribe to 20.0% of equity interest in Mirai HDC 1 Sdn Bhd, as well as to redeemable convertible exchangeable preference shares in Mirai Alpha Sdn Bhd. GPGH has signed agreements with both companies on 8th June 2021. (The Edge)

Zhulian Corp Bhd's 3QFY21 net profit fell 13.0% YoY to RM9.6, on weaker sales. Revenue for the quarter declined 14.2% YoY to RM36.7m. A third interim dividend of 3.0 sen per share, payable on 1st December 2021 was declared. (The Edge)

Malakoff Corp Bhd and Gas Malaysia Bhd, both members of the MMC Group, have announced a joint venture company to undertake operations and maintenance (O&M) services for cogeneration simultaneous production of two or more forms of energy from a single fuel source plants in Malaysia. (The Edge)

 

Source: Mplus Research - 14 Oct 2021

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