Bargain hunting may emerge

Market Review

Malaysia: The FBM KLCI (-1.3%) extended its losses yesterday to close below the 1,500 psychological level, mainly dragged by the Petronas-linked heavyweights. The lower liners ended higher, while the broader markets continued its downtrend with the exception of technology (+2.3%), healthcare (+1.0%) and energy (+0.2%) sectors.

Global markets: US stockmarkets rallied overnight as the Dow climbed 1.9% after the US President Donald Trump appears to soften his stance on further stimulus package. Both European and Asia stockmarkets both, however, finished mixed.

The Day Ahead

The eleventh hour sharp selling pressure in selected index heavyweights sent the local bourse spiralling lower yesterday. After the previous session slump, we think that bargain hunting activities may emerge on the local bourse as investors nibble on beaten down stocks. It was a tale of two sides as the lower liners managed to march higher on the back of the rotational play, coupled with the favourable market sentiment.

Sector focus: We see the technology sector anchoring the broader market over the foreseeable future with more businesses across various sectors embrace digitalisation. Elsewhere, the extended gains in CPO prices continue to provide trading opportunities within the plantation stocks.

The FBM KLCI was hammered down and formed a bearish candle, violating below the 1,500 psychological level. The sharp selling pressure may induce further weakness over the near term, although bargain hunting activities may also emerge in the interim. We continue to view the 1,480 as the immediate support, followed by 1,450. The immediate resistances are at 1,520, followed by 1,540. Indicators have turned negative as the MACD Histogram has turned red, while the RSI remains below 50.

Company Brief

Bina Puri Holdings Bhd's joint-venture company, SPTK Joint Venture Company Ltd has won a RM1.03bn bid for part of the high-speed railway project to connect Bangkok to Nakhon Ratchasima. With the latest award, the group's unbilled book order stands at RM1.90bn. (The Star)

Sunsuria Bhd has proposed to issue Islamic bonds of up to RM500.0m to raise funds for capital expenditure and working capital. The tenure of the Sukuk Wakalah Programme shall be up to 30 years from the date of first issuance of the Sukuk Wakalah. (The Star)

Top Glove Corp Bhd will start paying dividends on a quarterly basis starting from the financial year ending FY21. A special dividend is also possible as the group moves away from its existing semi-annual payout scheme. (The Edge)

TCS Group Holdings Bhd’s wholly-owned subsidiary TCS Construction Sdn Bhd has bagged an RM323.0m contract for M Arisa, a serviced apartment project at Setapak. The project, whose construction works will be over a period of 36 months, comprises two blocks of 57-storey suite apartments with a 10-storey parking podium and one basement parking. (The Edge)

K-One Technology Bhd has inked a licence agreement with UK-based medical technology firm Star Syringe Ltd to manufacture syringe safety needle caps in Malaysia for worldwide distribution. The group would be entitled to manufacture the syringe safety needle caps in Malaysia on an exclusive basis on condition that there will be a volume production of 100.0m units per annum within the next 24 months. (The Edge)

Trive Property Group Bhd intends to raise up to RM63.8m through a rights issue with warrants, mainly to repay its term loan and to fund the acquisition of the remaining 40.0% stake in a subsidiary, Avenue Escapade Sdn Bhd. It is also planning to consolidate every 25 of its shares into one share, which would result in an adjustment to its share price. (The Edge)

Kerjaya Prospek Property Bhd is buying a piece of vacant freehold land measuring 50,482 sqf in Kuala Lumpur for RM10.0m. The land will complement its existing Bloomsvale mixed development on Old Klang Road. (The Edge)

Source: Mplus Research - 8 Oct 2020