Sideways prolonged

Market Review

Malaysia:. The FBM KLCI (-0.6%) retreated as volatility remains unabated with more than two-third of the key index components ended lower as the key index declined 4.0% MoM. The lower liners closed mixed, while the broader market was also mixed with the transportation & logistics sector (+0.9%) outperformed.

Global markets:. The US stockmarkets endured another volatile session as the Dow sank 1.6% to record 4.3% MoM decline, as the proposal to raise debt ceiling and change in tax legislations weighed on sentiment. European stockmarkets retreated, while Asia stockmarkets finished mostly higher.

The Day Ahead

On the final day of 3rd quarter, the FBM KLCI ended lower after hovering mostly in the negative territory as broad-based sentiment remained cautious amid mixed regional performances as well as concerns from the US. Given the weak sentiment from the Wall Street, we expect the consolidation phase to persist for the near term. Commodity wise, we noticed the CPO price traded above RM4,500 per tonne mark on the back of supply concerns as production normally peaks in Sept-Oct and decent prospects of rising demand under the recovery environment. Meanwhile, the Baltic Exchange Dry Index continued to hover above the 5,000 mark.

Sector focus:. The advanced CPO price that traded at the all-time high may bode well for the plantation sector. Besides, we reckon bargain hunting activities in recovery theme stocks to persist, thus investors may look out for stocks in consumer, aviation and tourism sectors.

FBMKLCI Technical Outlook

Snapping the 3-day gains, the FBM KLCI fell below the daily EMA9 level. Technical indicators remained negative as the MACD Histogram has extended a red bar, while the RSI continued hovering below the 50 level. Resistance is located at 1,550-1,560, while the support is pegged along 1,515.

Company Brief

Sapura Energy Bhd’s 2QFY21 net loss stood at RM1.52b vs. a net profit of RM23.7m recorded in the previous corresponding quarter, as the Covid-19 pandemic pushed up the cost on certain projects and forcing the oil and gas company to make hefty provisions for foreseeable losses, coupled with project delays in Taiwan and India. Revenue for the quarter dropped 38.7% YoY to RM747.1m. (The Star)

MR DIY Group Bhd will open 35 new stores in seven states across the country in October 2021. The new stores comprise 14 MR DIY, 3 MR DIY Express, 6 MR TOY and 12 MR DOLLAR stores, bringing the total number of stores across the group to 830. MR DIY continues to adhere to the SOPs mandated by the Health Ministry and has a 99.0% vaccination rate for its retail staff nationwide. (The Star)

NPC Resources Bhd has found a new buyer to acquire part of its estates in Sabah, barely days after withdrawing an offer to IOI Corporation Bhd. Syarikat Kretam Plantations Sdn Bhd has accepted its offer to sell a total of 2,109-ac (853-ha) of land in Kinabatangan, Sabah for RM52.7m. (The Star)

Ahmad Zaki Resources Bhd’s (AZRB) 4QFY21 net loss stood at RM20.6m vs. a net profit of RM30.5m registered in the previous corresponding quarter, largely impacted by unrealised foreign exchange gains in the plantation division. Revenue for the quarter, however, grew 27.6% YoY to RM208.3m. (The Star)

BP Plastics Holding Bhd has proposed a bonus issue of one new share for every two held. The group also announced free bonus warrants on the basis of one warrant for every five shares held. The entitlement dates for the two issues will be determined later, subject to shareholders' approval. The proposals are expected to be completed by the end-2021. (The Edge)

Top Glove Corp Bhd executive chairman Tan Sri Dr Lim Wee Chai has bought shares in the company for the first time in about three months on 23rd September 2021, when he acquired 3.0m shares for RM2.66 each after the rubber glove manufacturer’s share price closed down below RM3.00 on 20th September 2021. (The Edge)

Berjaya Corp Bhd (BJCorp) will focus on three areas; rationalisation of the group, improving its efficiency and optimising its resources fully for FY22, according to its group CEO Jalil Rasheed. Jalil remains optimistic about the group’s outlook and shared that the recovery was made possible by all Berjaya companies. (The Edge)

Ta Win Holdings Bhd has called off the memorandum of understanding with RR One Capital effective yesterday, after parties were unable to conclude the discussions with details and terms of a proposed joint venture. (The Edge)

Cahya Mata Sarawak Bhd (CMSB) director Tan Sri Mohd Zahidi Zainuddin has been redesignated as the group’s chairman effective 1st October 2021. He replaces Tan Sri Abdul Rashid Abdul Manaf, who is retiring from the board to focus on other business interests. (The Edge)

MMC Corp Bhd shareholders has approved its controlling shareholder Tan Sri Syed Mokhtar Albukhary's plan to take the company private. 99.7% of the shareholders voted in favour of the tycoon’s privatisation plan in an extraordinary general meeting (EGM) held yesterday. (The Edge)

Kenanga Investment Bank Bhd (Kenanga IB), which is the independent adviser to minority shareholders of IJM Plantations Bhd under Kuala Lumpur Kepong Bhd's (KLK/offeror) unconditional mandatory takeover offer for the remaining IJM Plantations shares, recommended that IJM Plantations' shareholders accept the RM3.10 a share offer, as the price is deemed fair and reasonable. (The Edge)

Cypark Resources Bhd’s 3QFY21 net profit grew 3.3% YoY to RM16.7m, on the back of improved revenue. Revenue for the quarter rose 18.3% YoY to RM65.9m. (The Edge)

Enfrasys Consulting Sdn Bhd has emerged as the second largest shareholder of Transocean Holdings Bhd, after acquiring a 30.7% stake in the logistics group on 28th September 2021. The largest shareholder of Transocean is Kumpulan Kenderaan Malaysia Bhd, which held a direct interest of 6.9% and an indirect interest of 25.7% as of 13th September 2021. (The Edge)

Source: Mplus Research - 1 Oct 2021