Market Review

Malaysia: The FBMKLCI (+0.3%) erased its intraday losses and closed higher after final trading hour spike, driven by the gains in Petronas-related and telecommunication heavyweights. The lower liners rose while the broader market ended mixed.

Global markets: The US stockmarkets ended mixed as the Dow (3.0%) surged to its highest level since February and S&P 500 (1.2%) soared on positive vaccine trial news from Pfizer and BioNtech rippled through the stockmarkets, coupled with Joe Biden’s victory; Nasdaq (-1.5%), however, closed lower. Both the European and Asia stockmarkets ended higher.

The Day Ahead

After delivering a solid performance last week, the FBM KLCI was supported by the eleventh hour buying in selected index heavyweights. While further upsides are still on the cards, we think that any firmer upward move may attract quick profit taking activities. A consolidation beckons owing to the positive signs of vaccine development by Pfizer and BioNTech which could be a boon for economic recovery, but a bane for glove makers stocks. The lower liners are still on course for further upside, driven by the improved trading liquidity.

Sector focus: Vaccine-related stocks may be driven by the positive signs over the vaccine development. Meanwhile, the energy sector is expected to be boosted by the rally in crude oil prices.

FBMKLCI Technical Outlook

The FBM KLCI was traded positively at the start of the trading bell before succumbing to quick profit taking as the key index formed a doji candle on the eleventh hour buying. A consolidation may take charge owing the recent strong strides with gains likely to be capped towards the immediate resistances at 1,530- 1,540. We expect the 1,500 level remain well supported at current juncture, followed by 1,470. Indicators remained positive as the MACD Histogram has extended another green bar, while the RSI remains above 50.

Company Brief

Kossan Rubber Industries Bhd’s 3QFY20 net profit surged 608.7% YoY to RM348.7m in reflection to the increase in average selling price, while demand for gloves continues to far exceed supply. Revenue for the quarter gained 93.9% YoY to RM1.03bn. An interim dividend pay-out of 3 sen a share was declared. (The Star)

The Employees Provident Fund (EPF) bought 13.2m shares of Top Glove Corporation Bhd on 4th November 2020, filings with Bursa Malaysia showed.The shares of the world's biggest glove maker were purchased by its mandated fund managers. However, on the same day, it disposed of 304,600 shares. After the recent transactions, the EPF's shareholding increased to 492.5m shares or 6.0%. (The Star)

Kronologi Asia Bhd’s 3QFY20 net profit fell 27.7% YoY to RM4.9m mainly attributed to a reduction in revenue from enterprise data management (EDM) infrastructure technology segment resulting from the onset of the Covid-19 global pandemic. Revenue for the quarter decreased 27.5% YoY to RM59.2m. (The Star)

ES Ceramics Technology Bhd non-independent non-executive director Datuk Kamal YP Tan has ceased to be a substantial shareholder after disposing all of his remaining shares of 47.2m shares or 10.5% of the company issued shares. The shares were sold at 57.5 sen per share on 5th November 2020, pricing the block of shares at RM27.1m. He was the largest shareholder of the company before he last disposed of his shares on 4th November 2020, when he sold 48.3m shares or 10.7% stake in the company at 58.6 sen per share. (The Edge)

Ho Wah Genting Bhd wholly-owned subsidiary has obtained a one-year conditional approval from Indonesia's health ministry to manufacture medical products such as surgical face masks, Covid-19 rapid test cassettes and liquid chemical sterilants. (The Edge)

United Plantations Bhd’s 3QFY20 net profit rose 58.4% YoY to RM95.3m, on higher palm prices and production. Revenue for the quarter increased 19.9% YoY to RM334.0m. (The Edge)

QES Group Bhd has been appointed to take over Nikon Corp’s industrial metrology business in Malaysia, effective from 1st January 2021. The appointment was announced by Nikon, following a decision to cease operations of Nikon (Malaysia) Sdn Bhd (Nikon Malaysia) by year end. QES is currently the authorised distributor for Nikon Malaysia’s industrial metrology business. (The Edge)

The auditor of Barakah Offshore Petroleum Bhd has issued a disclaimer of opinion on the group’s audited financial statements for the financial year ended 30th June 2020 (FY20), as it could not obtain sufficient appropriate audit evidence to provide a basis for an audit opinion. Messrs Morison AAC PLT highlighted several bases for its disclaimer of opinion including Barakah’s current liabilities exceeding its current assets by RM240.8m, a deficit in shareholders’ fund of RM158.5m, and the notices of demand relating to a default on term loan facilities received by Kota Laksamana 101 Ltd, a wholly-owned subsidiary of the group. (The Edge)

JHM Consolidation Bhd will be transferring its listing to the Main Market of Bursa Malaysia, effective 12th November 2020. The counter has been listed on the ACE Market for some 14 years, since 13th July 2006. (The Edge)

Handal Energy Bhd’s 51.0%-owned subsidiary Borneo Seaoffshore Engineering Sdn Bhd has secured a pipeline isolation services contract from ExxonMobil Exploration and Production Malaysia Inc. The five-year contract, which comes with an optional one-year extension, does not have any specific value, as it is on a “call out” basis. (The Edge)

Huawei Technologies (Malaysia) Sdn Bhd and cashless payment solutions provider Revenue Group Bhd’s unit Revenue Safe Nets Sdn Bhd have teamed up to develop an e-services hub, focusing on helping small and medium enterprises (SMEs) in Malaysia move towards digital transformation and effectively boost their presence in the market. (The Edge)

Source: Mplus Research - 10 Nov 2020