Market Review

Malaysia: The FBM KLCI (-2.8%) closed lower following a sharp decline in the final trading hour, as the market pulled back into investors’ month end portfolio rebalancing. The lower liners ended in the green amid high demand, while the broader market finished mixed.

Global markets: The Dow (-0.9%) enjoyed its best month in over three decades despite closing lower, after continued positive market sentiments lifted by Covid-19 vaccine hope. Both the European stock markets and Asia stockmarkets also closed lower.

The Day Ahead

The FBM KLCI started off the week on a dour note alongside with the weakness across regional peers on the increasing geopolitical tension between US and China. Still, the FBM KLCI recorded 95.82 pts on gain (+6.5% MoM) during November 2020. Although we see renewed volatility unfolding, we reckon that bargain hunting activities may take precedence after the sharp fall yesterday. On the other hand, we think that the lower liners are poised for further upsides, driven by the improved trading liquidity which may extend the rotational play.

Sector focus: Renewed trading interest is developing within the healthcare sector on the prospect of higher weightage in gloves makers in the FBM KLCI. In the meantime, the property sector is expected to remain on course for further recovery, owing to the various measures under Budget 2021 to boost home ownership.

FBMKLCI Technical Outlook

The FBM KLCI finished sharply lower as the key index formed a bearish candle to wipe out its previous two weeks gains to close below the daily EMA20 level. While downside risk is prevalent, bargain hunting activities may come onto course with immediate resistance at 1,580, followed by 1,600. Meanwhile, the supports are at 1,540, followed by 1,520. Indicators have turned negative as the MACD Histogram has extended another red bar, while the RSI has slipped below 50.

Company Brief

AMMB Holdings Bhd’s 2QFY21 net profit fell 35.0% YoY to RM237.3m, on lower revenue and higher credit costs. Revenue for the quarter declined 3.5% YoY to RM2.14bn. (The Star)

RHB Bank Bhd’s 3QFY20 net profit improved 1.0% YoY to RM622.3m, due to other higher operating income. Revenue for the quarter, however, fell 10.0% YoY to RM3.00bn. (The Star)

OSK Holdings Bhd’s 3QFY20 net profit fell 2.2% YoY to RM105.2m, as there were fewer ongoing property projects and negative impact from the rental concession granted to retail tenants affected by the conditional movement control order. Revenue for the quarter, however, added 1.3% YoY to RM319.7m. (The Star)

Comfort Gloves Bhd’s 3QFY20 net profit soared 1119.0% YoY RM90.3m, amid higher sales volume and average selling prices. Revenue for the quarter jumped 105.7% YoY to RM276.7m. (The Edge)

BIMB Holdings Bhd’s 3QFY20 net profit fell 34.8% YoY to RM135.8m, mainly due to higher allowances for impairment and overheads. Revenue for the quarter slipped 3.3% YoY to RM1.33bn. An interim single tier dividend of 12.6 sen under the dividend reinvestment plan was declared. (The Edge)

Malaysia Building Society Bhd’s (MBSB) 3QFY20 net profit rose 51.8% YoY to RM258.4m, due to a reduction in funding cost. Revenue for the quarter added 1.9% YoY to RM765.6m. (The Edge)

KPJ Healthcare Bhd’s 3QFY20 net profit fell 26.8% YoY to RM34.0m, due to lower activities in hospital operations. Revenue for the quarter slipped 7.4% YoY to RM850.7m. (The Edge)

Malaysia Airports Holdings Bhd’s (MAHB) 3QFY20 net loss stood at RM319.7m vs. a net profit of RM197.9m recorded in the previous corresponding quarter, amid the pandemic and its resultant movement restrictions that caused a significant 74.8% YoY contraction in passenger movements. Revenue for the quarter sank 70.7% YoY to RM396.7m. (The Edge)

Mah Sing Group Bhd's 3QFY20 net profit fell 46.0% YoY to RM RM27.0m, as both its property and plastics businesses saw earnings decline, while its hotel segment sustained losses following the pandemic outbreak. . Revenue for the quarter declined 6.5% YoY to RM388.2m. (The Edge)

Panasonic Manufacturing Malaysia Bhd’s 2QFY21 net profit gained 30.0% YoY to RM40.0m, following a recovery in both its domestic and export sales. Revenue for the quarter improved 1.9% YoY to RM294.0m. (The Edge)

Gets Global Bhd has received an unconditional mandatory takeover offer (MTO) at 55 sen per share from its two largest shareholders ADA Capital Investments Ltd and Teong Lian Aik. The joint offerors intend to maintain the listing status of the company on the main market of Bursa Malaysia. The MTO was launched after the company placed out 158.0m new shares at 55 sen per share to ADA Capital. ADA Capital is owned by Teong’s brother-in-law Low Bok Tek. (The Edge)

Pharmaniaga Bhd has set up a task force as it gears up to distribute the Covid-19 vaccine, which is expected to be available at the end of the first quarter next year, nationwide. (The Edge)

Boustead Holdings Bhd’s 3QFY20 net loss narrowed to RM51.8 m, from a net loss of RM155.0m recorded in the previous corresponding quarter, on lower operational expenses. Revenue for the quarter, however, declined 30.9% YoY to RM1.89bn. (The Edge)

Fitters Diversified Bhd has won a construction contract worth RM78.3m from Pencala Jaya Sdn Bhd for a residential property project in Rawang. The contract, which preliminary planning works are expected to begin in December 2020 will end by 2023. (The Edge)

LKL International Bhd has bagged a contract worth US$40.0m (RM163.0m) to supply nitrile examination gloves to Shang Hong International (Hong Kong) Ltd and is set to complete by December 2021. (The Edge)

Source: Mplus Research - 1 Dec 2020