Market Review

Malaysia: The FBM KLCI (-0.5%) traded in a lacklustre manner before finishing lower as the key index recorded its third straight losing day that mirrored the weakness across regional equities. Likewise, the lower liners were in the red, while the broader market finished mostly in red with the exception of the REIT sector (+0.8%).

Global markets: US stockmarkets started off the week on a dour note as the Dow sank 1.8% due to rising number of Covid-19 cases that poses a risk for another round of lockdown, as well as uncertainty over the tabling of another stimulus bill. Similarly, both the European and Asia stockmarkets were battered yesterday.

The Day Ahead

Following the tepid market sentiment, we continue to see the local bourse to undergo an extended downward bias consolidation spell. The uncertainty in both domestic and overseas political avenue, rising number of Covid-19 cases and toppish market condition is likely to weigh on the local bourse performance. The lower liners were not spared as trading activities starts in taper ahead of the end of blanket loan moratorium.

Sector focus: While the broader market is largely dour, we favour the REIT sector which is defensive in nature may warrant another look amid the volatile times. In the meantime, consumer-related stocks will likely to be more resilient amid the improving labour market in recent months.

The FBM KLCI was traded in a lacklustre manner before succumb to further selling pressure as the key index formed another bearish candle to remain below the daily EMA9 level. With the 1,500 giving way, the next supports are pegged at 1,480, followed by 1,450. Resistances, meanwhile is located at 1,515 and 1,555. Indicators have turned weak as the MACD Histogram has turned red, while the RSI remains below 50.

Company Brief

QES Group Bhd is buying a factory building with a five-storey office in Glenmarie, Selangor for RM21.0m cash to expand its office and production area. The expansion is estimated to double QES’s manufacturing capacity as well as to support future growth and expansion for its manufacturing and distribution division. (The Star)

Lagenda Properties Bhd will be in a joint venture with Majuperak Holdings Bhd for an affordable housing project in Mukim Batang Padang, Perak, which will be built on four parcels of land measuring 229.7-ac. The project would comprise of 1,374 single-storey terrace houses, 264 double-storey shop houses, a petrol station, a hypermarket and a government agencies’ office. (The Star)

Green Packet Bhd and MMAG Holdings Bhd inked a master agreement whereby Green Packet's Kiplepay e-wallet will be used as the basis for e-wallet and digital payment solution for foreign workers employed by MMAG. The master agreement will initially last two years and be renewed for successive periods of one year each. (The Edge)

Scientex Bhd will be acquiring the eight parcels of land totalling 202-ac in Pulai, Johor, near its existing developments from Lee Pineapple Co (Pte) Ltd. The acquisition is conditional upon the Estate Land Board's approval. With this purchase, the group's total land bank will be more than 5,700-ac — which can sustain the group for the next 10 years. (The Edge)

Bintai Kinden Corp Bhd has signed a licensing agreement with US-based Generex Biotechnology Corp for Covid-19 vaccine compounds in Malaysia. Bintai Kinden will hold the exclusive licence in Malaysia - the right of first refusal when it comes to the commercialisation and development of vaccine compounds and research information in New Zealand, Australia and global halal markets. (The Edge)

Sapura Energy Bhd's president and CEO Tan Sri Shahril Shamsuddin will retire from his positions upon turning 60 in March next year. Datuk Mohd Anuar Taib has been appointed chief operating officer and CEO designate effective next month as part of a six-month transition. Mohd Anuar joined the firm last month, and left Petroliam Nasional Bhd (Petronas) last year. At Petronas, he was the executive vice president and CEO of the upstream division. (The Edge)

Gabungan AQRS Bhd is suing its former executive director cum chief financial officer (CFO) Bernard Lim Soon Chiang for alleged negligence in the loss of RM13.3m following an investigation conducted by a legal firm appointed by its board. Lim is currently Ho Wah Genting Bhd's non-executive chairman and was Gabungan AQRS' CFO from 2012 until 2017. (The Edge)

Supermax Corp Bhd is purchasing two pieces of land measures 2.0-ha. in Bukit Raja, Selangor from SP Setia Bhd for RM73.5m to build the operational headquarters of its subsidiary Maxter Glove Manufacturing Sdn Bhd. (The Edge)

Dagang NeXchange Bhd (DNeX) has appointed Datuk Seri Syed Zainal Abidin Syed Mohamed Tahir, the former Petronas Dagangan Bhd chief executive officer (CEO) and MD as its managing director (MD) effective 1st October 2020. The acting MD Mohd Azhar Mohd Yusof will be redesignated as executive director in charge of group corporate services. (The Edge)

Superlon Holdings Bhd's 1QFY21 net profit jumped 52.8% YoY to RM3.8m on impairment gain of RM72,000 and lower expenses. Revenue for the quarter, however, fell 2.9% to RM27.4m. An interim dividend of 0.75 sen, payable on 21st October 2020 was declared. (The Edge)

Source: Mplus Research - 22 Sept 2020