Market Review

Malaysia: Although the FBM KLCI resume trading on a lively note, quick profit taking activities in selected banking heavyweights, coupled with the biggest foreign fund outflow since 17th March 2020 sent the local bourse that closed mildly lower yesterday. The lower liners, however, rebounded, while the broader market finished mostly higher with the technology sector (+0.9%) taking the lead.

Global markets: US stockmarkets finished higher as the Dow climbed 0.8%, while both the S&P 500 (+0.8%) and the Nasdaq (+1.5%) closed at another fresh record high levels boosted by the solid ISM manufacturing index that rose to 56.0 in August 2020. European stockmarkets, however, were mostly downbeat, while Asia stockmarkets ended mostly higher.

The Day Ahead

It was another lacklustre performance on the FBM KLCI as strong gains at the start of the trading bell were tempered by quick profit taking activities. While we do not discount the possibility of a recovery from the last week steep falls, gains will be measured with the wariness still very much a feature of the current market environment. On the other hand, we continue to see the lower liners faring on a better note backed by the extended rotational play.

Sector focus: While the construction sector will continue to pursue their baby steps of recovery, the technology together with the telecommunications & media sector may edge higher following the introduction of national digital infrastructure plan (Jendela). Meanwhile, we see gold-related players stepping into the spotlight again as the gold prices rising towards US$2,000 level.

Company Brief

T7 Global Bhd has inked a memorandum of agreement (MOA) with Mitsui E&S Shipbuilding Co Ltd to explore new business opportunities on the supply of ships to the Vietnamese Navy and Coast Guard. The MOA, in effect for three years, will also provide opportunities for the parties to collaborate in the ship or vessel business in Vietnam. (The Star)

Damansara Realty Bhd’s (DBhd) 80.0%-owned subsidiary, Damansara Realthy (Pahang) Sdn Bhd (DRP) has into a term sheet agreement with YHS Resources Sdn. Bhd to start working on a bauxite mining project on four plots of land measuring a total of 145-ha. in Kuantan, Pahang that belongs to DRP. The Term Sheet is expected to contribute positively to the earnings of DBhd Group during the duration of the Definitive Contract period beginning FY21, when the bauxite mining operation starts operation. (The Star)

Brahim's Holdings Bhd's associate company Brahim's SATS Food Services Sdn Bhd (BSFS), which is involved in the in-flight catering business, is exploring new business to ensure business continuity. BSFS has been struggling ever since the Movement Control Order was enforced, forcing the company to lay off hundreds of workers. (The Star)

Boustead Holdings Bhd has denied claims that it is attempting to block a proposed privatisation exercise of the company by its major shareholder, the Armed Forces Fund Board (LTAT). Boustead has yet to receive any offer from LTAT. (The Edge)

Boustead Heavy Industries Corp Bhd's joint-venture firm BHIC AeroServices Sdn Bhd (BHICAS) has been granted a further three-year extension of the contract from the Ministry of Defence to maintain and supply spares for Royal Malaysian Air Force EC725 helicopters via in-service support. Additional ceiling contract value worth RM113.2m, bringing the total ceiling contract value to RM548.2m. (The Edge)

Boustead Plantations Bhd has appointed Datuk Ismail Lasim, Umno assemblyman for Juasseh, as its new independent non-executive chairman with immediate effect, while Sabah Umno Youth chief Abdul Aziz Julkarnain was appointed its independent non-executive director, effective yesterday. (The Edge)

Kerjaya Prospek Group Bhd has bagged a RM203.7m contract from Gamuda Bhd to undertake the construction of a residential and commercial development project in Gamuda Cove. This brings Kerjaya Prospek's total contract wins to date to RM1.20bn, while its outstanding order book now stands at RM3.60bn. (The Edge)

RHB Bank Bhd has received Bank Negara Malaysia's green light to acquire the entire equity interest of RHB Nominees Singapore Pte Ltd, Summit Nominees Pte Ltd and RHB Research Institute Singapore Pte Ltd. RHB is also acquiring the client coverage team, research and advisory services in relation to capital market services and share margin accounts from RHB Securities Singapore, which will be carried on and continued by the bank's branch in Singapore. The group has entered into an agreement with RHB Securities Singapore in respect of the transfer of assets and businesses for S$20.6m in cash. (The Edge)

Media Prima Bhd has bought the remaining stake in home shopping company CJ Wow Shop. The acquisition is part of the group's transformation plan to tap into the strong prospects of the home shopping and e-commerce industry. (The Edge)

Petronas Chemicals Group Bhd (PetChem) is collaborating with PT AKR Corporindo Tbk to distribute chemicals across Indonesia. Both PetChem and PT AKR's respective subsidiaries — Petronas Chemicals Marketing Sdn Bhd and PT AKR Niaga Indonesia have recently signed an agreement to formalise the joint venture. (The Edge)

Oceancash Pacific Bhd is embarking on an expansion to double its production capacity for non-woven materials used in the production of personal protective equipment to 16,000 tonnes per annum, with an estimated completion time of less than 18 months. The estimated capital expenditure for the project will be RM40.0m (for land and machinery) which will be funded through internal funds, placements and bank borrowings.

A share placement entailing the issuance of up to 24.5m new shares, representing 10.0% of the total number of its issued shares was proposed in order to raise up to RM21.2m to purchase one set of spunmelt non-woven machinery to produce non woven fabric (RM17.9m) and for working capital (RM3.0m). (The Edge)

AirAsia Group Bhd is introducing counter check-in fees in selected countries and cities effective yesterday, following the deployment of its contactless check-in kiosks and enhanced mobile app features recently. The fees are RM20 per guest for domestic flights and RM30 per guest for international flights. However, guests can avoid paying these fees by opting to check-in using the AirAsia.com website, mobile app or airport kiosks. (The Edge)

IHH Healthcare Bhd has completed its acquisition of Prince Court Medical Centre for RM1.02bn after near a year. Prince Court is now the 16th hospital under IHH in Malaysia. (The Edge)

Permaju Industries Bhd has teamed up with Vsolar Group Bhd, via a joint venture agreement, for a RM217.0m large-scale solar power project in Seremban. The project consists of terms including a concession period under a power purchase agreement with Tenaga Nasional Bhd, spanning 21 years starting from the commercial operation date by 31st December 2023. (The Edge)

Media Prima Bhd has bought the remaining stake in home shopping company CJ Wow Shop. The acquisition is part of the group's transformation plan to tap into the strong prospects of the home shopping and e-commerce industry. (The Edge)

Rev Asia Bhd will be acquiring 100.0% stake in iMedia Asia Sdn Bhd from Catcha Investments Ltd and iCreative Asia Sdn Bhd for RM10.0m as part of its regularisation plan, aiming to help the ACE Market-listed group come out of the Guidance Note 2 status. The purchase consideration will be satisfied by Rev Asia issuing 40.0m new shares at 25.0 sen apiece. (The Edge)

Source: Mplus Research - 2 Sept 2020