On track for more 

Market Review

Malaysia: The FBM KLCI (+0.6%) extended its gains on the build-up of positive momentum in glove heavyweights, coupled with the stronger performance on Wall Street overnight. Consequently, the FBM KLCI recovered all its intraday losses to register 0.2% WoW gains. The lower liners also rebounded, while the broader market finished mostly higher, led by the healthcare sector (+2.4%).

Global markets: US stockmarkets extended their gains as the Dow rose 1.3% with investors are now pricing in another round of stimulus measures from the government, coupled with the recovery in technology shares. Elsewhere, both European and Asia stockmarkets finished mixed.

The Day Ahead

We continue to think that the glove heavyweights will dictate the direction on the local bourse which is gaining momentum as of late. The conclusive of the Sabah state snap election may bring about some calamity with the focus now shifting back to the political scene at West Malaysia. In the meantime, we reckon that retail players may continue to nibble on the mild recovery mode from the lower liners and broader market shares, capitalising on the recent positive market sentiment.

Sector focus: We think that the healthcare sector may continue to dominate the trading sentiment (particularly gloves and PPE players) as the number of new infections across the globe remained elevated. In the meantime, the recent pullback in technology shares may also pique investors’ interest.

The FBM KLCI extended its gains after forming a gapped up formation to close mildly above the daily EMA9 level. While there could be further, we reckon that the outlook remain indifferent with the consolidation still in place. The immediate resistances are located at 1,515, followed by 1,555. The support, meanwhile are remained at 1,480, followed by 1,450. Indicators remained mixed as the MACD Histogram has extended another green bar, but the RSI remains below 50.

Company Brief

Gamuda Bhd’s 4QFY20 net loss stood at RM17.3m, vs. a net profit of RM179.0m recorded in the previous corresponding quarter due to a one-off non-cash impairment of RM148.0m from the temporary shut-down of its industrialised building system (IBS) factory in Sepang owing to the slower pace of building works amid stringent Covid-19 standard operating procedures. Revenue for the quarter declined 38.0% YoY to RM926.5m. (The Star)

Parlo Bhd has inked a memorandum of understanding (MoU) with Myanmar's Diamond Palace Group of Companies Ltd and Agensi Perkerjaan Seaview Hectare Sdn Bhd to provide employment agency-related services to supply workers from Myanmar to employers around the world. The collaboration will provide the company with new revenue sources as it faces a stalemate in the tourism industry due to the pandemic. (The Star)

NTPM Holdings Bhd's 1QFY21 net profit jumped to 2810.5% YoY to RM14.6m, mainly due to lower raw material costs, such as virgin pulp and waste paper prices, and overhead costs. Revenue for the quarter, however, declined 3.0% YoY to RM179.3m. An interim dividend of 0.8 sen per share, payable on 23rd October 2020 was declared. (The Edge)

United Malacca Bhd is halting the operations of its 60.0%-owned Indonesian joint venture PT Wana Rindang Lestari (WRL) in Sulawesi which has a business licence to source timber products over a land area of about 59,920-ha, to address environmental issues highlighted by non-government organisations (NGOs). United Malacca has conducted a soil and terrain assessment on the land, with an environmental assessment report having been completed and submitted to the authorities there. (The Edge)

Sanichi Technology Bhd is raising RM31.9m, of which RM30.7m would be used for the Marina Point project in Melaka, its maiden property development since it diversified from precision moulds and tooling. It will be placing 524.8m shares or 30.0% of its issued share capital to third-party investors. The development comprises serviced apartments and a shopping mall, with a gross development value of RM180.0m. It is expected to be fully completed by 2QFY21. (The Edge)

Kossan Rubber Industries Bhd's shareholders have approved the group's one-for one bonus issue involving 1.28bn shares. 99.99% of those present at its extraordinary general meeting said aye to the issue. The ex-date for the bonus issue is 9th October 2020, with the entitlement date being 12th October 2020. Following the issuance, its share capital will increase to 2.56bn shares. (The Edge)

Destini Bhd is raising RM78.2m with a private placement involving 20.0% of its issued share capital for working capital. Of the proceeds, RM50.0m will be used for new projects and RM28.1m for existing projects. The group is currently bidding for three projects worth a total of RM3.5bn for its maintenance, repair and overhaul and O&G segments. It has 16 ongoing projects with an outstanding value of RM536.6m, which will provide earnings visibility for the next 24 months. (The Edge)

Source: Mplus Research - 28 Sept 2020