Market Review

Malaysia: The FBM KLCI (+0.2%) snapped a four-session losing streak as investors cheered on Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate at 1.75% while awaiting results from the US presidential election. The lower liners extended their gains while REITs index (-0.1%) was the sole decliner on the broader market.

Global markets: US stockmarkets soared as the Dow (+1.3%) moved higher for the third straight session and Nasdaq (+3.9%) climbed to its highest level since April 2020 amid ongoing tally of votes for the US presidential election. European stockmarkets finished in green, while Asia stockmarkets closed mostly higher.

The Day Ahead

The FBM KLCI managed to hold onto its gains as the key index snapped a four-day losing streak mild bargain hunting activities in beaten down stocks. Although the US presidential election race remains on course, investors breathed sigh of relief that the neckline race will see neither party holds the neither majority in Senate nor in House of Representatives; which suggest that any broad policy changes are off the table. Meanwhile, we still think that rotational play amongst the lower liners may take charge over the interim, owing to the positive market sentiment.

Sector focus: The plantation sector is expected to garner further trading interest following the rising CPO prices that is rallying toward RM3,100/MT. We also reckon that the construction sector remain in favour in view of the tabling of Budget 2021 that is expected to see the mega-infrastructure projects remain in the pipeline.

FBMKLCI Technical Outlook

The FBM KLCI staged a mild recovery for the first time in five trading days as the key index formed a sideways shooting star candle yesterday. With strong gains remain elusive at current juncture; we reckon that upsides are to be capped towards the immediate resistance at 1,480-1,500. In contrast, the supports located at 1,450, followed by 1,430. Indicators have turned mixed as the MACD Histogram has turned green, but the RSI remains below 50.

Company Brief

Ocean Vantage Holdings Bhd's wholly-owned subsidiary, Ocean Vantage Engineering Sdn Bhd has received an award from Andeli Solar Sdn Bhd to build a large-scale solar (LSS) plant for Coral Power Sdn Bhd for a fixed contract sum of RM29.6m. . The LSS floating plant is expected to complete within four months is part of the LSS phase two, will be built on a pond located in Manjung, Perak. Coral Power is a 70%-owned subsidiary of Minetech Resources Bhd. (The Star)

Mega First Corp Bhd (MFCB) has announced that its hydropower plant in Laos has started commercial operation on 1st October 2020. Its 80%-owned indirect subsidiary Don Sahong Power Company Ltd (DSPC), has on 4th November 2020 received a certificate from the Ministry of Energy and Mines of Laos confirming that the commercial operational date (COD). The concession period shall end on the date occurring twenty-five (25) years after the COD, which is on 30th September 2024. (The Star)

AirAsia X Bhd (AAX) has revised its proposed debt restructuring scheme and recategorised into two classes. Class A creditors — which include Malaysia Airports Holdings Bhd (MAHB) are creditors who are critical or essential and who have secured and other rights. Creditors that do not fall within the parameters of Class A are considered Class B creditors. (The Edge)

UMW Holdings Bhd’s automotive segment is on track to meet full-year sales targets on better sales by UMW Toyota Motor (UMWT) and 38.0%-owned Perusahaan Otomobil Kedua Sdn Bhd (Perodua) in October 2020. Its automotive market share is 58.0% in October 2020, up from 51.4% a year earlier. (The Edge)

FGV Holdings Bhd is targeting to sell another 1.5m oil palm seeds in India by 2021. To date, it has secured the sale of 1.0m oil palm seeds to India through its Yangambi ML161 brand, the number one oil palm planting material with a 43.0% market share in Malaysia. (The Edge)

Latitude Tree Holdings Bhd’s indirect wholly-owned unit in Vietnam received RM7.7m in insurance compensation over a fire at its premises in April 2018. The fire occurred at the unit’s manufacturing facilities in Binh Duong province. The building houses the assembly and packing line, inventories of work-in-progress and finished goods. (The Edge)

Fraser & Neave Holdings Bhd (F&N) is expecting better earnings for FY21. The group will be collaborating with e-commerce platforms to boost sales, while also diversifying its revenue sources to outside of Malaysia, setting up operations in Dubai to expand into the Middle East and Africa market. (The Edge)

Gamuda Bhd and Crest Builder Holdings Bhd have signed an MoU to look at the possibility of joint cooperation and strategic ventures in prospective collaborations, tenders and projects, as well as evaluation of the scope of work to be carried out by both parties. (The Edge)

Ipmuda Bhd is diversifying into the renewable energy and healthcare sectors in order to diversify itself from its trading segment, which accounts for 99.4% of its revenue as of 30th June 2020. Separately, the group is conducting a private placement and restricted placement of 14.9m shares each to raise RM10.4m, in order to pay for trade payables and staff costs. (The Edge)

MAA Group Bhd’s 3QFY20 net profit stood at RM22.8m vs. a net loss of RM3.3m recorded in the previous corresponding quarter, on better earnings from its general insurance business. Revenue for the quarter rose 24.3% YoY to RM59.8m. (The Edge)

Source: Mplus Research - 5 Nov 2020