Down, but not out 

Market Review

Malaysia: The FBM KLCI started off the final quarter on a weak note, falling 0.5% after lingering in the negative territory for the entire trading session with more than two-third of the key index components were in the red yesterday. The lower liners ended on a mixed note, while the broader market also closed mixed with the healthcare sector (+2.2%) outperformed its peers.

Global markets: US stockmarkets extended their gains overnight with the Dow rising 0.1% as investors continue to monitor for developments surrounding the new stimulus bill. European stockmarkets finished mostly higher, while Asia stockmarkets advanced as stockmarkets Japan, Hong Kong and China were closed for a festive break.

The Day Ahead

Amid the lack of follow-through buying interest, we reckon that the downward bias consolidation on the key index will remain in place. Additionally, the recent increase in Covid-19 cases across Peninsular Malaysia will pose a stumbling block for the nation economic recovery. Nevertheless, the lower liners are attempting to find their footing, with rotational play across sectors will keep trading interests at a decent level.

Sector focus: Buying interests are rising within the healthcare sector on the back of the rising number of Covid-19 cases, both local and overseas. Meanwhile, the technology sector continues to garner firm trading interests amid the improved outlook.

Although the FBM KLCI trended lower, much of the losses were contained by mild bargain hunting activities as the key index formed a hammer candle. Still, it is too premature to ascertain for a firm recovery. 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 are negative as the MACD Histogram hasturned red, while the RSI remains below 50.

Company Brief

Kossan Rubber Industries Bhd is paying about RM50.0m in remediation fee to its migrant workers. The first payment amounting to approximately RM10.0m will be paid in November 2020, with the remediation payment programme to be completed within 18 months. (The Star)

NTPM Holdings Bhd is selling its entire interest in NTMP Paper Mill (Bentong) Sdn Bhd for RM27.5m. It is expecting to net a one-off gain of RM11.2m from the sale. The subsidiary has continuously incurred losses with little prospects of a turnaround in the near future. (The Edge)

GFM Services Bhd has clinched a three-year contract to provide operations and maintenance services at Villages 1 and 2 and their associated facilities at the Pengerang Integrated Complex in Johor from Petroliam Nasional Bhd (Petronas). The actual contract value was not stated, with Petronas to pay a non-escalating and fixed unit rate, as specified in the letters of award issued. (The Edge)

Tan Chong Motor Holdings Bhd has teamed up with PT SGMW Motor Indonesia to explore introducing the latter’s vehicle products in Malaysia and Thailand. It signed an MoU with the Indonesian company. PT SGMW is a wholly-owned subsidiary of SAIC GM Wuling Automobile Co Ltd and has a manufacturing plant in Greenland International Industrial Centre, Indonesia, built on 600,000 sqm of land with a total investment cost of US$700.0m. The plant has a capacity to produce up to 120,000 units per annum. (The Edge)

Matrix Concepts Holdings Bhd is looking to launch RM1.04bn in properties for FY21. It has already launched RM541.4m in new projects in 1QFY21, focusing on the two-storey terraced homes segment at the Sendayan development in Negeri Sembilan and Bandar Seri Impian in Kluang, Johor. Matrix has netted RM800.0m in new bookings during the MCO, of which RM350.3m was converted into new sales in 1QFY21 — up by 9.3% YoY. (The Edge)

FGV Holdings Bhd has expressed disappointment with the US Customs and Border Protection (CBP)’s decision to ban its palm oil from entering the US, as it has been working since 2015 to address concerns of forced labour. The group noted that its efforts are well-documented and available in the public domain. It also highlighted that it pays for all official costs associated with migrant worker recruitment, is not involved in the recruitment or employment of refugees, nor does it practice the detention of workers’ passports. (The Edge)

My EG Services Bhd (MyEG) will be offering online renewals for Motorcycle Road Tax and Competent Driving Licenses starting 9th October 2020 and 16th October 2020 respectively on its online platform. Users would also be able to access online motorcycle insurance rental and motorcycle road tax and competent driving licence delivery services. (The Edge)

Source: Mplus Research - 2 Oct 2020