Market Review

Malaysia: The FBM KLCI (-1.2%) erased all its previous session gains, dragged by broad-based selling as weakness was in line with the negative regional markets. The lower liners extended their losses, while all 13 major sectors on the broader market declined with the healthcare sector (-2.2%) taking the worst hit.

Global markets: The US stockmarkets remained downbeat as the Dow fell 0.4% on mounting concern over the spread of Covid-19 delta variant that may impede the economic growth. European stockmarkets ended mixed, while Asia stockmarkets closed mostly weaker.

The Day Ahead

Overall, the FBM KLCI and broader market declined with the returned of selling pressure from foreign funds; it turned net sellers with a net outflow of RM63.0m, snapping 12 sessions of net buying streak. Glove counters extended their retreat amid the on-going vaccination progress. Going forward, we expect recovery theme to stay focus in the anticipation of the reopening of more economic activities, where most stocks might be oversold after being bashed down yesterday. Commodities wise, both CPO and crude oil prices dipped, while the aluminium price continued trending higher.

Sector focus: Investors are likely to remain optimistic with the recovery theme and focusing on recovery sectors such as construction, building, material, banking and consumer as well as transportation and logistics. Besides, a keynote address at the National Recovery Summit yesterday aiming to have 5G coverage in 80% of populated areas by end 2024 may bode well for 5G related counters.

FBMKLCI Technical Outlook

The FBM KLCI reversed and closed below SMA200 level, losing its grip on the 1,580 support level. Technical indicators remained mixed as the MACD Histogram has extended a red bar, while the RSI has hooked down again. With the key index crossed below the 1,580 support level, next support is pegged along 1,560, while the resistance is located at 1,600-1,620.

Company Brief

Several managers at semiconductor firm SilTerra Malaysia have been arrested by the country's anti-corruption agency, according to parent company Dagang Nexchange Bhd (DNeX). SilTerra was notified that the arrests had been made on Wednesday by the Malaysian Anti-Corruption Commission (MACC) to assist in their investigation of a potential offence. DNeX owns 60.0% of SilTerra while its Chinese partner, Beijing Integrated Circuit Advanced Manufacturing and High-End Equipment Equity Investment Fund Center holds the remainder. (The Star)

Leon Fuat Bhd’s 2QFY21 soared 12.0x YoY to RM32.0m, boosted by higher selling prices. Revenue for the quarter grew 73.1% YoY to RM185.0m. (The Star)

Top Glove Corp Bhd is looking to offer more employment and create new jobs for individuals within and outside the organisation amid pandemic-driven business closures and job losses. (The Edge)

Maxis Bhd has offered a performance share grant involving 10.5m ordinary shares in the telecommunications group for its eligible employees, under its long-term incentive plan. The shares granted have a vesting period of 34 months or almost three years. (The Edge)

Kuala Lumpur Kepong Bhd's (KLK) major shareholder Batu Kawan Bhd's share price closed up 40 sen or 1.9% at a record high of RM21.00 on Bursa Malaysia yesterday after the latest round of share buy-backs. The stock, which had been climbing since a year-to-date low of RM18.52 on 30th July 2021, traded between RM20.80 and RM21.00 yesterday with 23,300 shares changing hands. (The Edge)

PPB Properties, the property division of PPB Group Bhd, announced that Megah Rise’s residential tower in Taman Megah, Selangor is scheduled for topping-out by the end of September 2021. The freehold 39-storey high-rise which is the only one in the area will see keys handed over to residents by 2Q22. It contains 228 units with built-up from 764 sq ft to 1,747 sq ft. The average selling price is RM1,080 psf. (The Edge)

Source: Mplus Research - 10 Sept 2021