Market Review

Malaysia: The FBM KLCI (-0.3%) edged down marginally after enduring a choppy trading session as the local bourse underperformed the positive regional peers ahead of the US election as well as the ongoing worries on Covid-19 situation in Malaysia. However, the lower liners and broader market ended positively.

Global markets: US stocks surged as the Dow saw a sharp rise of 2.1%; its biggest daily gain since July 2020, buoyed by investors’ hopes on election clarity as well as a potential fiscal stimulus package that may be crafted in the wake of the election results. European stockmarkets finished higher, while Asia stockmarkets also ended mostly in green.

The Day Ahead

Despite Bank Negara move to keep the benchmark interest rates unchanged, it was another volatile session as the FBM KLCI that was bogged down by the extended selling activities from foreign funds. Moving forward, we expect the tepid momentum to continue as investors will be monitoring on the US election results that has been keep investors on their toes. Meanwhile, we expect rotational play to take charge on the lower liners, although sentiment remain rocky as US enters into the ballot tallying during market trading hours today.

Sector focus: We see the construction sector to come into the spotlight as we approach the tabling of Budget 2021 on the back of expectations that mega infrastructure projects will be retained. The technology sector is also expected to remain firm in view of the solid performance on Nasdaq overnight.

FBMKLCI Technical Outlook

The FBM KLCI extended its losses after erasing all its intraday gains as the key index formed a bearish candle. We reckon that the downward bias momentum is likely to remain in place over the near term. Any upsides are limited towards the immediate resistance at 1,475-1,500. In contrast, the supports located at 1,450, followed by 1,430. Indicators are still negative as the MACD Histogram has extended another red bar, while the RSI remains below 50.

Company Brief

Frontken Corp Bhd’s 3QFY20 net profit rose 12.0% YoY to RM21.3m as revenue grew on improved contribution from its subsidiaries. Revenue for the quarter increased 8.9% YoY to RM94.8m. (The Star)

Scomi Group Bhd faces suspension on 9th November 2020 if it is unable to submit the outstanding annual reports for the financial year ended 30th June 2020 (FY20) to Bursa Malaysia Securities Bhd by 6th November 2020. If a company fails to issue the outstanding financial statements within six months from the expiry of the relevant timeframes, it faces delisting. (The Star)

LTKM Bhd’s subsidiary LTK (Melaka) Sdn Bhd has been found guilty of raising the margins of its egg prices under the Price Control and Anti-Profiteering Act. It has been fined RM25,000 and also ordered to pay RM9,600 to repurchase 30,000 eggs confiscated by the government. (The Edge)

Parlo Bhd is set to raise RM25.8m via a private placement of 72.8m shares (20.0% of its total issued shares) to third party investors. RM12.0m of the proceeds will be used to invest in its migrant workforce-related services business. Another RM7.1m will be used to repay bank borrowings, and RM5.9m for working capital. (The Edge)

Country Heights Holdings Bhd’s 26-year-old joint venture (JV) with the Sarawak Land Custody and Development Authority (LCDA) has been terminated over claims that the former had failed to address contract breaches. The JV is over a hill resort and is a 70:30 split between Country Heights and the LCDA. Country Heights plans to content the termination, as it views it was not done according to the JV agreement. (The Edge)

Fraser & Neave Holdings Bhd (F&N)’s 4QFY20 net profit grew 26.4% YoY to RM86.0m on cost controls on overheads and lower advertising and promotion spending, and an RM7.8 m gain on disposal for its “Teapot’ trademark. Revenue for the quarter, however, fell 2.2% YoY to RM953.7m. A final dividend of 33 sen per share, subject to approval by shareholders at its upcoming AGM. (The Edge)

My EG Services Bhd (MyEG) launched it MySafeTravel digital health pass system for inbound travellers amid the Covid-19 pandemic. It is designed and operated by MyEG fo the Ministry of Health and has been online since 1st November 2020. It is an online channel for inbound travellers to register and pay for mandatory Covid-19 swab tests and to choose their preferred location for quarantine stay, prior to arrival. (The Edge)

Prestariang Bhd’s wholly-owned subsidiary Prestariang Systems Sdn Bhd (PSSB) has bagged an RM50.0m contract from Menteri Besar Selangor (Pemerbadanan) (MBI) to develop and implement the Selangor Kerjaya programme. The three-year contract, which started on 1st November 2020, will see Prestariang providing skills training and job placement for 10,000 Malaysians who reside in Selangor or have graduated from learning institutions in the state. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) and Alibaba Group’s Cainiao Aeropolis eWTP Hub has commenced operations. The hub, formerly known as the KLIA Aeropolis DFTZ Park, is a major project under the Electronic World Trade Platform (eWTP) partnership between the Malaysian government and Alibaba in 2017. It will facilitate 24-hour delivery within Malaysia for e-commerce operators, with the ultimate goal of enabling 72-hour delivery to the rest of the world. (The Edge)

Source: Mplus Research - 4 Nov 2020