Tabling of 12th Malaysia Plan

Market Review

Malaysia:. The FBM KLCI (-0.5%) pullback after erasing all its intraday gains from the start of the trading bell as sentiment turned dour following the lingering concern over China's Evergrande Group defaulted a US$83.5m coupon bond payment. The lower liners retreated, while the broader market ended mostly lower.

Global markets:. The US stockmarkets edged mildly higher as the Dow added 0.1% after recovering from its intraday losses as traders turned defensive following the China’s Evergrande Group’s debt woes and prospectus of reduction in US stimulus. European stockmarkets were downbeat, while Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI finished the volatile week in the negative territory, mirroring the weakness across China and Hong Kong stock markets amid investors’ fret over Evergrande debt concerns; the key index was mainly dragged by TENAGA and selected banking heavyweights. The local bourse may remain sideways with investors eyeing on the 12th Malaysia Plan (12MP) which will be tabled today; we noticed construction and property sectors have some trading activities prior to this event. Commodities wise, the crude oil price rose above the USD78 level, while the CPO price declined. Baltic Exchange Dry Index still hovered at its 12 years high despite a retreat on Friday.

Sector focus:. With the adult vaccination rate increased to 83.1%, the government’s prediction to reopen cross state travel in 3 weeks might benefit the aviation and tourism counters. Other sectors such as consumer and technology may also trend higher. Besides, the firmer crude oil price may shine a light on the oil & gas sector.

FBMKLCI Technical Outlook

The FBM KLCI retreated as the key index still closed below the daily EMA9 level. Technical indicators were negative as the MACD Histogram has extended a red bar and the RSI hovered below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged along 1,515.

 Company Brief

VS Industry Bhd’s 4QFY21 net profit fell 24.2% YoY to RM41.5m, owing to a one-off impairment on the investment in an associate amounting to RM25.0m. Revenue for the quarter, however, rose 6.6% YoY to RM941.1m. A fourth interim dividend of 0.5 sen per share and a final dividend of another 0.5 sen per share was proposed, subject to shareholders’ approval at the upcoming annual general meeting. (The Star)

Hong Seng Consolidated Bhd has entered into a share sale agreement with Robust Potential Sdn Bhd for the disposal of 100.0% equity interest in Hong Seng Priority Management Sdn Bhd (HSPM) for RM34.5m. The sale of 2.0m ordinary shares of its hire purchase business will result in an estimated gain of about RM31.2m. The proceeds will mainly be used for working capital purposes for the group’s healthcare and glove businesses. (The Star)

Bursa Malaysia Securities has queried Sam Engineering & Equipment (M) Bhd following the recent sharp rise in the price and volume of its shares. The regulator had advised investors are advised to take note of the company’s reply to the above unusual market activity (UMA) query when making their investment decision. (The Star)

FGV Holdings Bhd is believed to be eyeing its maiden oil palm venture in India's State of Telangana after news reports indicated that FGV representatives had met government officials there on 22nd September 2021 to propose the setting up of an oil palm processing unit in Sircilla, and other parts of the State. (The Edge)

NTPM Holdings Bhd's 1QFY22 net profit rose 7.8% YoY to RM15.8m, on the back of higher unrealised gain on foreign exchange of RM5.5m. Revenue for the quarter, however, slipped 3.1% YoY to RM173.8m. A first interim dividend of 0.8 sen per share, payable on 29th October 20212 was declared. (The Edge)

Dagang NeXchange Bhd (DNeX) recorded a net profit of RM116.7m for its 6QFY21 on revenue of RM45.9m after changing its financial year end from 31st December to 30th June. The reported figures mainly boosted by a fair value of oil reserves and goodwill from its acquisition of Ping Petroleum Ltd. (The Edge)

Analabs Resources Bhd's 1QFY22 net profit rose 49.2% YoY to RM8.2m, thanks to higher pipe laying and rehabilitation segment contribution, and higher dividend income that offset the lower contributions from chemicals division and recycled products division. Revenue for the quarter, however, fell 2.5% YoY to RM27.0m. (The Edge)

Federal International Holdings Bhd's 50.0%-owned joint venture outfit has inked a Memorandum of Understanding (MoU) with SPIC Energy Malaysia Bhd to acquire a stake in some operating solar energy assets. The collaboration will focus on the acquisition of a solar farm, which would then undergo a process of repair and upgrade under a team led by SPIC. (The Edge)

AMMB Holdings Bhd (AmBank) has continued its share buy-back exercise after a three-month hiatus since June 2021. The banking group spent RM3.5m to acquire 1.1m shares in four transactions between 17th September 2021 and 22nd September 2021. The shares were acquired between RM3.17 and RM3.22 per share, which comes up to an average of RM3.21 per share. (The Star)

Source: Mplus Research - 27 Sept 2021