Bank Negara in focus

Market Review

Malaysia: The weakness on Wall Street overnight permeates to stocks across Bursa Malaysia and the FBM KLCI shed 1.5% in tandem with the negative performances across regional peers yesterday. At the same time, the lower liners trended lower, while broader market was painted in red with the healthcare sector (- 4.9%) taking the worst hit.

Global markets: US stockmarkets rebounded from a three-day slump as the Dow jumped 1.6% boosted by gains in technology shares on the back of bargain hunting activities. European stockmarkets also rebounded on gains from energy and biotechnology stocks, but Asia equities slumped yesterday.

The Day Ahead

Tracking the gains on Wall Street overnight, the FBM KLCI may stage a recovery back above the 1,500 level. The lower liners that were in a purple patch in recent days may also find some support as bargain hunting activities comes into centre stage. In the meantime, investors will be keeping an eye on Bank Negara monetary decision today.

Sector focus: The recovery on the technology sector in the second half of the trading session yesterday, coupled with the strongest performance delivered by Nasdaq since April 2020 overnight may drive the technology sector. Banking stocks may see some alleviation on expectations that Bank Negara will stand pat on the OPR rate today after delivering a total 125bps cut in the last four meetings.

The FBM KLCI has gapped down to close at its lowest level in two months as the key index slipped to close below the daily SMA200 level. A recovery is in the cards with the resistance at 1,520, followed by 1,540. Meanwhile, the immediate support is now pegged at 1,480, followed by 1,450. Indicators are negative as the MACD Histogram turned red, while the RSI remains below 50; treading slightly above the oversold region.

Company Brief

Eversendai Corp Bhd has created a world record and landmark feat in the construction industry with the one-of-a-kind iconic landmark project, the “One Za’abeel” in Dubai. One Za’abeel is an iconic, high-rise, mixed-use luxury development in Dubai. (The Star)

AirAsia Group Bhd has restructured the group's engineering units across its operating airlines into a centralised maintenance, repair and overhaul (MRO) subsidiary - Asia Digital Engineering Sdn Bhd (ADE). The unit will be an avenue to earn additional income, which will contribute to the overall increase in revenue for AirAsia. (The Star)

Pansar Bhd plans to diversify its business to include construction and civil engineering through the acquisition of Sarawak-based builder Perbena Emas Sdn Bhd for RM151.0m cash. Perbena has an existing order book of RM647.1m and is in advanced stages of tendering for more than RM2.17bn worth of new projects. (The Star)

Magni-Tech Industries Bhd is disposing 7.8-ac of freehold industrial land with a factory on site in Seberang Perai for RM22.0m cash. The disposal will result in a RM15.0m gain for the company. (The Star)

Ho Wah Genting Bhd, which has jumped on the Covid-19 bandwagon, is considering appointing Xinkexian (Beijing) Biotechnology Co, Ltd (XKX) as its nonexclusive manufacturer to produce Covid-19 vaccines. Its wholly-owned subsidiary HWGB Biotech Sdn Bhd has entered into a Memorandum of Understanding with Xinkexian (Beijing) Biotechnology Co, Ltd (XKX) for a possible partnership. (The Edge)

Omesti Bhd has ceased to be a shareholder of Diversified Gateway Solutions Bhd (DGS), after disposing of its entire 40.1m shares in the latter. (The Edge)

Privasia Technology Bhd plans to raise RM6.1m through a private placement to repay borrowings and for working capital. This is assuming an issue price of 11.0 sen per placement share. The private placement entails the issuance of up to 55.8m shares, representing 10.0% of the issued shares of the company, at a price to be determined later. (The Edge)

Hibiscus Petroleum Bhd is raising up to RM2.00bn via a private placement, as part of its accelerated plan to acquire good value and high quality-producing assets. This is in view of the improved oil and gas sector, as the global economy starts to recover from the crippling effects of the Covid-19. (The Edge)

Dutch Lady Milk Industries Bhd is assessing the prospects of a potential sale of its current factory land in Petaling Jaya, which comprises factory buildings, office complex and warehouse, and carries a net book value of RM28.4m or 0.44 sen per share as at end 2019. (The Edge)

Source: Mplus Research - 10 Sept 2020