Tepid gains

Market Review

Malaysia: Tracking the gains on Wall Street last Friday, coupled with the mostly positive sentiment across regional peers, the FBM KLCI (+0.2%) managed to eke out mild gains after lingering mostly in the positive territory yesterday. The lower liners also extended their gains, while the broader market finished mostly higher, anchored by the technology sector (+2.8%).

Global markets: US stockmarkets started off the week on a jubilant note as the Dow (+1.5%) advanced for the third straight session, boosted by expectations over further stimulus measures from the government ahead of the first presidential debate. Earlier, European stockmarkets marched higher, while Asia stockmarkets also finished mostly higher.

The Day Ahead

It was another choppy trading session on the FBM KLCI as quick profit taking activities are now limiting further upsides. Hence, the consolidation is expected to remain in shape for an extended period. Elsewhere, the dwindling trading interests ahead of the end of blanket loan moratorium may also keep gains across the lower liners in check. Investors are opting to remain on the side lines, waiting for further leads before pouncing aggressively into the market again.

Sector focus: We continue to favour the technology sector as we note that there were renewed buying interests in recent days due to the positive prospects. In the meantime, healthcare sector are also demonstrating baby steps of recovery as investors bargain hunt beaten down stocks.

The FBM KLCI ended mildly positive after coming off from its intraday high to remain above the daily EMA9 level. The lack of further strong buying interests may bring the consolidation longer. For now, gains will be kept limited towards the immediate resistances 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

V.S Industry Bhd’s 4QFY20 net profit fell 3.8% YoY to RM54.1m on higher effective tax rate. Revenue for the quarter slipped 15.0% YoY to RM882.6m. An interim dividend of 0.8 sen per share for the quarter together with a final dividend of another 0.8 sen, subject to shareholders’ approval at the upcoming annual general meeting was proposed. (The Star)

Lagenda Properties Bhd has exercised the put option as granted under the share sale agreement to dispose of 49.0% equity interest in six poultry-related companies at an aggregate option price of RM9.8m. The rationale of exercising the put option is to further unlock the value and monetise its investment in the six companies and to enable the company to focus its resources solely in its property development business. (Bernama)

Kanger International Bhd’s chairman Datuk Paduka Sharipah Hishmah Syed Hassan resigned from her post effective today due to her other personal commitments. She was previously non-executive director, before being made its chairman on 8th June 2015. Johor Umno deputy chief Datuk Nur Jazlan Mohamed will replace her. (The Edge)

Hiap Teck Venture Bhd’s 4QFY20 net profit fell 65.0% YoY to RM10.3m due to lower sales volume as a result of the MCO. Revenue for the quarter declined 32.0% YoY to RM210.0m. (The Edge)

Yinson Holdings Bhd’s 2QFY21 net profit jumped 144.0% to RM100.4m due to a greater contribution from the group’s engineering, procurement, construction, installation and commission (EPCIC) segment. Revenue for the quarter climbed 366.5% YoY to RM995.6m. An interim dividend of 4.0 sen, payable on 18th December 2020 was declared. (The Edge)

UOA Development Bhd is selling UOA Corporate Tower in Bangsar South to its 75.7%-owned UOA REIT for RM700.0m. UOA Development shareholders will receive a special dividend of 1.0 sen per share from the transaction. Of the proceeds, UOA Development will be using RM646.0m to fund the development of its properties; RM32.3m as working capital and RM21.2m for the special dividend. The sale is subject to shareholder approval at an EGM. (The Edge)

UOA REIT will be financing RM278.0m of the purchase consideration via private placement and RM352.0m of the building’s price tag via its RM422.0m five-year revolving credit facility. (The Edge)

Bintai Kinden Corp Bhd signed an MoU with Institut Jantung Negara Sdn Bhd (IJN) to explore possible collaboration for the commercial development of Covid-19 vaccine in Malaysia, based on the former’s existing partnership with US-based Generex Biotechnology Corp. (The Edge)

LKL International Bhd’s 1QFY21 net profit leaped 900.0% YoY to RM1.2m. Revenue jumped 106.2% YoY to RM19.3m. The group would be purchasing 60.0% of dialysis equipment player Tahmaz Meditech Sdn Bhd for RM12.0m, which will be paid for via an issuance of RM12.0m new LKL shares at RM1 apiece. (The Edge)

Source: Mplus Research - 29 Sept 2020