Market Review

Malaysia:. The FBM KLCI (-0.3%) extended its losses after erasing all its intraday gains on quick profit taking activities yesterday. The lower liners closed mostly downbeat, while the property (+0.2%), construction (+0.1%) and financial services (+0.02%) sectors outperformed the negative broader market.

Global markets:. The US stockmarkets finished higher as the Dow added 0.4% ahead of the jobs data today that will provide an indication towards the pace of impending interest rate hike. European stockmarkets closed on an upbeat tone, while Asia stockmarkets finished mostly positive.

The Day Ahead

The FBM KLCI witnessed another session of pullback despite buying from local retail and foreign investors, as the index constituents succumbed to further profit taking activities after rebounding in mid-morning. With the average infection rate (R-naught) dipping below 1.0 (based on 1st Sept data), while Melaka and Negeri Sembilan being moved to Phase 2 and 3 of NRP from 4th September 2021, we believe optimism remains in the recovery theme on the local bourse. Meanwhile, the crude oil price rebounded and stood above USD72 per barrel, while CPO price rose above RM4,200 level.

Sector focus:. The oil & gas counters may be in limelight following the surge in crude oil price. Besides, tourism sector may gain traction as National Security Council (MKN) agreed to open the tourism sector in several destinations under the travel bubble programme in a special meeting. We might see some trading interest building up in tax related counters as tax experts highlighted that Malaysia is in need of a tax reform to broaden the tax base.

The FBM KLCI closed below the SMA200 level as the key index extended its fall. Technical indicators remained mildly negative as the MACD Histogram has extended a red bar, while the RSI fell below the 70 level. Resistance is located at 1,600, while the support is pegged along 1,570-1,580.

Company Brief

Bintai Kinden Corp Bhd's subsidiary Bintai Healthcare Sdn Bhd is collaborating with Scientillence Sdn Bhd for haemodialysis businesses in Malaysia and Southeast Asia. Scientillence, owned by the ex-CEO and chairman of hospital group Pantai Holdings Bhd Tan Sri Lim Tong Yong, is the sole manufacturer of dialyser (artificial kidney) in Malaysia as well as Southeast Asia. (The Star)

Southern Cable Group Bhd has secured a contract from Telekom Malaysia Bhd to supply rectifier systems for its regional hubs. The 30-month contract was worth RM30.0m. Rectifier is a device that converts electrical alternating current (AC) to direct current (DC), which are required for the operations of some transmission applications and devices. (The Star)

YTL Hospitality REIT is currently on the lookout for quality assets amid the industry downturn caused by the pandemic, and does not rule out potential acquisitions in the near-to-medium term with the emergence of yield-accretive assets. (The Edge)

Paragon Globe Bhd is exploring a potential collaboration with Selangor government-owned Selgate Corporation Sdn Bhd to develop private specialist hospitals. The group has signed an MoU with Selgate’s property arm, Selgate Properties Sdn Bhd. (The Edge)

Ocean Vantage Holdings Bhd has bagged a contract for the development of Heart & Mind programme for a unit of Hibiscus Petroleum Bhd in accordance with the guidelines of the Energy Institute. The duration for the contract is three years with an option to extend for one year. (The Edge)

MAA Group Bhd has emerged as a substantial shareholder of KNM Group Bhd, after acquiring a 7.0% stake in the latter. MAA has bought the stake, comprising 233.0m shares in an open market transaction for RM52.9m, or an average of 22.7 sen per share. (The Edge)

Malaysia Steel Works (KL) Bhd (Masteel) has signed an underwriting agreement with M&A Securities Sdn Bhd for the former’s rights issue with warrants exercise to raise RM89.4m. The other co-underwriters are BIMB Securities Sdn Bhd, Malacca Securities Sdn Bhd and Inter-Pacific Securities Sdn Bhd. (The Edge)

PPB Group Bhd anticipates pick-up in its business for the remaining quarters of the year, as the nation’s mass vaccination rollout progresses. The sharp rise in commodity prices in the previous quarter led to a significant increase in raw material costs of flour and feed products, with limited price-in mechanism, gross profit margin compression seen across the group’s sub-segments. (The Edge)

Source: Mplus Research - 3 Sept 2021