Cautious undertone prevails

Market Review

Malaysia:. The FBM KLCI (-0.02%) finished mildly lower after recovering from its intraday low ahead of the mid-week break, dragged down by weakness in selected telco and gloves heavyweights. The lower liners rebounded, while the industrial products & services sector (+0.9%) outperformed on the mixed broader market.

Global markets:. The US stockmarkets turned lower as the Dow (-0.2%) fell on the back of the mixed economic data, while investors remain cautious on the economic reopening alongside with the spread of the Delta variant. Both the European stockmarkets advanced, while Asia stockmarkets finished mostly lower.

The Day Ahead

The FBM KLCI drifted lower earlier Wednesday but rebounded to close flat on last minute buying amid cautious market sentiment. Nevertheless, we believe bargain hunting activities should emerge with the return of foreign participation in our local stock markets on the back of our reopening of economic activities following several relaxations of SOPs under our National Recovery Plan; month-to-date foreigners have registered an inflow of RM904.6m. Commodities wise, the crude oil price hovered above USD75 per barrel, CPO price surged, while the gold price retreated.

Sector focus:. Further relaxation on NRP SOPs should continue to drive investors’ interest in accumulating recovery theme stocks such as building material and consumer. Besides, the plantation counter may benefit from the surging CPO price, while the transportation & logistics may gain traction with the Baltic Dry Index charging higher.

FBMKLCI Technical Outlook

The FBM KLCI fell below the daily EMA120 level as the key index continued hovering below 1,560 level. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI hovered below the 50 level. Resistance is located at 1,580-1,600, while the support is pegged along 1,535.

Company Brief

AirAsia X Bhd (AAX) has obtained court permission to extend the deadline to convene its creditor meetings to 17th March 2022. In February 2021, it was granted court approval to convene the separate meetings with different groups of creditors to vote on its proposal within 180 days. The court had separated the airline's 14 creditors into three classifications; the first for airport operator Malaysia Airports Holdings Bhd, the second for other creditors, and the third for planemaker Airbus SE. (The Star)

Shareholders of MSM Malaysia Holdings Bhd (MSM) have approved the disposal of the entire equity interest in its wholly-owned subsidiary MSM Perlis Sdn Bhd to FGV Holdings Bhd's unit FGV Integrated Farming Holdings Bhd for an initial consideration of RM175.0m cash. The move comprises 11 parcels of agricultural and industrial land, subject to adjustments for net working capital and net debt at completion of the proposed disposal. The disposal of the entire equity interest in MSM Perlis is estimated to result in a gain of RM91.6m after completion. (The Edge)

Investment banker turned investor Ian Yoong Kah Yin has emerged as a substantial shareholder at Tri-Mode Systems (M) Bhd after acquiring 60,000 shares in the company from the open market. Post-acquisition, Yoong's stake in the logistics service provider increased to 5.0% or 8.3m shares. (The Edge)

Nestcon Bhd is partnering with Singapore-listed property developer Hatten Land Ltd to jointly explore and pursue business opportunities in the solar photovoltaic (PV) sector in Malaysia. Nestcon Sustainable Solutions Sdn Bhd (NSS) has inked a strategic partnership agreement with Hatten Land's wholly-owned unit, Hatten Commercial Management Sdn Bhd (HCM). (The Edge)

Tan Sri Rodzali Daud has resigned as Destini Bhd's chairman effective 15th September 2021 after helming the company since May 2015. He will be replaced by one of the group’s largest shareholders and CEO, Datuk Rozabil Abdul Rahman, who has been appointed the group's executive chairman. (The Edge)

Pasukhas Group Bhd via its unit Pasukhas Sdn Bhd has secured a building and external work contract worth RM77.0m from Focus Dynamics Bhd's subsidiary Famous Ambience Sdn Bhd to complete the construction of a commercial smart building at Jalan Tun Razak, Kuala Lumpur. The three-storey building will have two basement levels and a banquet hall. (The Edge)

The Employees Provident Fund (EPF) has ceased to be a substantial shareholder of Cahya Mata Sarawak Bhd (CMSB). The provident fund’s stake in the group dropped below 5.0% after it disposed of a total of 1.8m shares on 10th September 2021. (The Edge)

Key Alliance Group Bhd has emerged as a new substantial shareholder of Macpie Bhd after buying a 5.9% stake or 56.0m shares in it in the open market. The group spent a total of RM5.3m to acquire the shares between 6th September 2021 and 13th September 2021. (The Edge)

Source: Mplus Research - 17 Sept 2021