Mirroring regional weakness

Market Review

Malaysia:. The FBM KLCI (-1.3%) marked its seventh consecutive losing streak after hovering largely in the negative zone throughout the day with more than two third of the key index components closing lower. The lower liners also extended their losses, while the broader market was splashed in red.

Global markets:. The US stockmarkets endured another volatile session as the Dow (-1.8%) sank on the back of the concerns over the China’s real estate sector, coupled with timing of the US Federal Reserve tapering of stimulus measures. Both the European and Asia stockmarkets finished in the red.

The Day Ahead

Tracking the performance in the regional markets, the FBM KLCI registered its 7th straight session of decline as investors’ sentiment remained sour; foreign funds turned net seller for the second session (net selling of RM120.8m). Given the negative Wall Street overnight, we believe market may perform a knee jerk selling at the opening bell and bargain hunting activities may emerge once the selling pressure is overdone. In the meantime, government’s discussion on possibility of allowing interstate tourism which may be seen as a mode for gradual economic recovery might be one of the few catalysts to cushion the downside risk for the near term. Meanwhile, both the CPO and crude oil prices extended their retreat.

Sector focus:. Investors may collect bashed down recovery theme stocks, targeting tourism and consumer sectors amid government’s discussion on possible interstate travelling. Also, traders may look out for strong momentum counters within the technology sector for extension of buying interest today.

 FBMKLCI Technical Outlook

Marking its 7th consecutive session of losses, the FBM KLCI crossed below the immediate support level at 1,535. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level. Next support level is located around 1,515, while the resistance is pegged along 1,580-1,600.

Company Brief

Hong Leong Industries Bhd’s 4QFY21 net profit stood at RM39.8m vs. a net loss of RM29.6m recorded in the previous corresponding quarter, boosted by higher sales across all product segments and improved operational efficiencies which reduced cost. Revenue for the quarter grew 49.1% YoY to RM463.8m. (The Star)

MGB Bhd has secured a turnkey project from Retro Court Sdn Bhd to develop a 1,006.7-ac industrial estate in Kertih, Terengganu. MGB was appointed as the turnkey contractor to undertake the entire design, financing, construction and completion, sales and marketing and credit administration of all that piece and parcel of the land. (The Star)

Techna-X Bhd which has been building up its energy storage and digital transformation businesses. It will temporarily cease its loss-making metallurgical coke business operations by 31st December 2021. Its coke business, which has been classified as discontinuing operation, remained in dire situation as it recorded a cumulative net loss of about RM59.1m for 6MFY21. (The Star)

Hong Leong Capital Bhd has appointed Hong Leong Investment Bank Bhd (HLIB) group managing director and chief executive officer (CEO) Lee Jim Leng as a non independent and non-executive director. Lee has been HLIB's group managing director/CEO since 24th November 2009. (The Edge)

KNM Group Bhd has appointed former federal territories minister Tan Sri Dr Zulhasnan Rafique as its non-executive chairman, following the resignation of his predecessor Datuk Ab Halim Mohyiddin on 26th June 2021. (The Edge)

Hup Seng Industries Bhd has reported that the Covid-19-driven temporary suspension of the biscuit maker's operations is expected to result in production volume loss of about 3.0% of the manufacturer's annual output volume as the company disinfects the premises of one of its subsidiaries. Its wholly-owned subsidiary Hup Seng Perusahaan Makanan (M) Sdn Bhd has received a notice from the Ministry of Health on 19th September 2021 to temporarily suspend its operations until 30th September 2021 for the purpose of carrying out disinfecting exercise on its entire premises. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) has entered into a strategic partnership with Maxis Bhd to co-develop a digital transformation road map for Smart Airport operations as the airport operator aims to leverage Maxis as the single telco operator to manage its connectivity services. Maxis will be managing the Wi-Fi and 5G-related network services and solutions. (The Edge)

Sime Darby Property Bhd has reopened its sales galleries and resumed operations at all project sites following the recent easing of lockdown restrictions. The property developer will comply with all standard operating procedures in support of the National Recovery Programme as the minimum standard at all sales galleries and project sites to ensure the safety and health of its employees and visitors. (The Edge)

Dayang Enterprise Holdings Bhd's 2QFY21 net loss widened to RM21.9m, from a net loss of RM1.0m recorded in the previous corresponding quarter, due to higher operating costs amid the Covid-19 pandemic. Revenue for the quarter fell 6.6% YoY to RM159.7m. (The Edge)

GFM Services Bhd is partnering Amzass (M) Sdn Bhd to upgrade the northbound and southbound Bemban lay-bys in Melaka. Amzass has been authorised by the Malaysian Highway Authority to upgrade the facilities of the lay-bys, as well as to construct a petrol station on both sides of the proposed rest and service areas. (The Edge)

Kimlun Corp Bhd's 2QFY21 net profit stood at RM2.4m vs. a net loss of RM9.7m recorded in the previous corresponding quarter, supported by higher contributions from all its major business divisions. Revenue for the quarter jumped 128.0% YoY to RM214.3m. (The Edge)

MUI Properties Bhd’s 4QFY21 net profit slumped 75.7% YoY to RM2.1m, due to lower net forex gains. Revenue for the quarter, however, rose 4.7% YoY to RM19.4m. A first dividend payout in 10 years amounting to 0.45 per share, payable on 22nd September 2021 was declared. (The Edge)

Source: Mplus Research - 21 Sept 2021