Market Review

Malaysia:. The FBM KLCI (-0.9%) halted a 7-day rally on profit taking activities in selected banking and gloves heavyweights. The lower liners finished mostly upbeat, while the broader market ended mostly higher with the healthcare sector (+0.9%) leading the pack.

Global markets:. The US stockmarkets closed mixed as the Dow fell 0.1% despite the Markit Manufacturing PMI data came in at 61.1 in August 2021. The PMI was however, slowest in the past 4 months. Meanwhile, S&P 500 (+0.03%) was boosted by mega-tech companies’ rally. European stockmarkets were mostly higher, while Asia stockmarkets ended mixed. The Day Ahead The FBM KLCI retreated yesterday, snapping a seven-day winning streak and backing away from the 1,600 psychological level as profit taking activities kicked in. However, we believe the local stocks to continue to eke out gains after taking a breather as investors’ confidence could be boosted by the pre-budget statement issued by the Finance Ministry which is believed to spur economic recovery. Meanwhile, OPEC+ is expected to stick to the existing gradual output hike despite revising up the 2022 demand outlook, which may boost the oil price in the long run.

Sector focus:. Investors may continue targeting the recovery theme sectors such as building material, banking and consumers following a pullback. Besides, the technology stocks may track overnight gains in Nasdaq. Also, solar-related stocks may be having higher trading interest due to PV contracts being awarded to several companies.

FBMKLCI Technical Outlook

The FBM KLCI snapped seven-day winning streak and closed below the 1,600 psychological level. Technical indicators turned mildly negative as the MACD Histogram has turned into a red bar, while the RSI has hooked lower in the overbought region. Resistance is pegged around 1,600, while support is located along 1,580.

Company Brief

Prestar Resources Bhd is extending its collaboration with Murata Machinery, Ltd (Japan) for the supply of automated storage and retrieval system (ASRS) racking system. Murata is one of the largest designers and manufacturers of material handling systems in Japan with a leading edge in the manufacturing of Automation Integrator serving a global market in a wide range of industries. With the supplemental manufacturing partnership agreement, Prestar Storage in total will be covering 10 regions including the main partnership located in Japan. (The Star)

Solarvest Holdings Bhd has secured a RM175.0m large-scale solar (LSS) project from Classic Solar Farm Sdn Bhd under the LSS@Mentari programme. It would undertake the main engineering, procurement, construction, and commission (EPCC) works for the 50.0-MW solar farm located in Chuping, Perlis. Inclusive of the latest contract, Solarvest’s new EPCC orders secured from the LSS@Mentari programme grew to approximately RM371.0m and Solarvest's unbilled orderbook has grown to RM583.0m. (The Star)

Malaysia’s pilgrimage fund is considering taking TH Plantations Bhd private amid a rally in palm oil prices. Lembaga Tabung Haji had asked banks for proposals for the potential deal for the owner of palm oil and rubber plantations. (The Edge)

Paramount Corp Bhd is buying a parcel of freehold residential land measuring approximately 13.3-ha in Selangor for RM102.7m. The land is within a kilometre radius of Paramount’s Sejati Residences and Sejati Lakeside. It is a 35-minute drive from Kuala Lumpur city centre or 25 minutes from Kuala Lumpur International Airport (KLIA), and only 10 minutes from Putrajaya via major highways. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has bagged a contract worth an estimated RM80.0m to procure, supply, install, test and commission medical equipment for the proposed development of a specialist hospital in Bandar Baru Uda, Johor Bahru. The project sum is the maximum purchasing budget for all the equipment to be supplied on a capital equipment lease concession basis. (The Edge)

Paragon Union Bhd, whose share price surged 37.5% in two trading days, has been slapped with an unusual market activity (UMA) query by Bursa Malaysia. The loss making carpet maker told the regulator it is not aware of any corporate development, rumour, report and explanation that may account for the usual trading activity. (The Edge)

Former Chief Secretary to the government, Tan Sri Dr Ali Hamsa has been appointed as the BCB Bhd new chairman, effective 1st September 2021. Ali Hamsa also holds directorship in several companies, including KPJ Healthcare Bhd, YB Ventures Bhd, G Capital Bhd, Kulim (Malaysia) Bhd and NCB Holdings Bhd. (The Edge)

LYC Healthcare Bhd’s unit LYC Medicare Sdn Bhd has proposed to issue 42.0m redeemable preference shares (RPS) at an issue price of RM1.00 per RPS to Kenanga Investors Bhd. The company will use the proposed issuance of RM42.0m to enable LYC Medicare’s wholly-owned unit, LYC Nutrihealth Sdn Bhd, to acquire 70.0% equity interests in both Aqurate Ingredients Intl (M) Sdn Bhd and Microbiome Intl (M) Sdn Bhd. The company will also utilise the proceeds for the fees and expenses incurred in the issuance of RPS, as working capital and other payments in the ordinary course of business of LYC Medicare. (The Edge)

Pekat Group Bhd's unit Pekat Solar Sdn Bhd has accepted an RM18.1m award for the design, supply, installation, testing and commissioning of solar photovoltaic systems at 16 sewerage treatment plants owned by Indah Water Konsortium Sdn Bhd (IWK). Scheduled to commence in September 2021, the project is expected to be completed in March 2022. (The Star)

Source: Mplus Research - 2 Sept 2021