Rebound from support

Market Review

Malaysia:. The FBM KLCI (+0.5%) snapped a three-day losing streak, lifted by gains in selected oil & gas, plantation and gloves heavyweights as crude oil and crude palm oil charged higher. The lower liners finished mostly higher, while the energy sector (+4.3%) outperformed the mixed broader market.

Global markets:. The US stockmarkets rebounded as the Dow gained 0.9%, boosted by the stronger than expected ISM Non-Manufacturing data in September 2021 that rose to 61.9 vs consensus expectations of 60.0. Both the European stockmarkets also advanced, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI snapped three-session losing streak to close in the positive territory, underpinned by bargain hunting activities in selected heavyweights. Tracking the rebound on Wall Street, the key index may continue to trade higher over the near term. Also, the reopening of economic activities should support the market sentiment and the recovery narrative at least for now. Commodities wise, the crude oil price stood above USD82 per barrel mark, while the crude palm oil price advanced, closing above RM4,700. Meanwhile, the Baltic Exchange Dry Index saw gains for the third straight session, rising to above 5,400.

Sector focus:. The firmer CPO and crude oil price may provide catalyst for buying interest into oil & gas and plantation stocks. Meanwhile, investors may continue to accumulate transportation stocks amid higher Baltic Exchange Dry Index. Besides, investors may focus on technology stocks following overnight rally in Nasdaq.

FBMKLCI Technical Outlook

The FBM KLCI rebounded to close at intraday high, but still hovering below the daily EMA9 level. Technical indicators were mixed as the MACD Histogram has turned into a green bar, while the RSI continued hovering below the 50 level. Resistance is envisaged along 1,550-1,560, while the support is located at 1,515.

Company Brief

AirAsia Group Bhd (AAGB) has received the approval from Danajamin Nasional Berhad (Danajamin) for an 80.0% guaranteed loan of up to RM500.0m, which will put the low-cost carrier on a firmer position to boost its operations. The loan is part of Malaysia’s Economic Stimulus Package following the unprecedented outbreak of Covid-19. (The Star)

Kelington Group Bhd’s unit has clinched a RM40.0m ultra high purity (UHP) contract for a wafer fab in Singapore. Its indirect unit Puritec Technologies (S) Pte Ltd secured the contract, which is its third UHP job, from a global leader in engineering and project management of high-technology facilities, which is engaged by a global leading semiconductor manufacturer. The project starts mid October 2021 and is slated to be completed by December 2022. (The Star)

Malayan Banking Bhd (Maybank) has launched a new mobile application, Maybank2u Biz for small and medium enterprises, with the key objective of making their banking requirements simple and secure, and provide them with the necessary tools to help with their non-banking requirements as well as to ease business operations. Meanwhile, Maybank's 69.1%-owned insurance arm Maybank Ageas Holdings Bhd has proposed to issue RM3.00bn worth of unsecured and subordinated bonds to provide capital and funding to Maybank Ageas' Singapore subsidiary following the Singapore subsidiary's exceptional growth in 2020 and 1H21. (The Edge)

SC Estate Builder Bhd has inked a memorandum of understanding with Kedah royalty to acquire a piece of land measuring 104.6-ha (258.5-ac) in Kedah. SC Estate Builder proposed to build a 100.0-MW solar power plant or environmental, social and governance initiative projects in Kedah. (The Edge)

Muar Ban Lee Group Bhd has proposed to undertake a private placement of up to 20.0% of its total number of issued shares to raise up to RM25.7m to repay bank borrowings. The proposed private placement will entail the issuance of up to 58.9m placement shares, which will be issued to investors at an issue price to be identified later. (The Edge)

Federal International Holdings Bhd is selling a 2.0-ha. of leasehold land, on which an office and a furniture factory are built, in Banting, Selangor to Filtermation (Mfg) Sdn Bhd for RM24.5m. The proceeds from the proposed disposal of the land will provide immediate cash flow to Federal International, which may use the money to finance a special dividend payment to shareholders and fund the seller's expansion into new businesses. (The Edge)

Caely Holdings Bhd is ramping up its fabric mask production and has allocated about RM5.0m as working capital for product diversification. The company will be launching more new products to boost sales in the coming months with the hope to end the year on a high note under its new management. (The Edge)

Solarvest Holdings Bhd has bagged a RM46.8m subcontract job from Tenaga Nasional Bhd (TNB) to provide engineering, procurement, construction and commissioning (EPCC) for the development of a 50.0-MW large scale solar photovoltaic plant in Bukit Selambau, Kedah. Solarvest’s wholly-owned subsidiary Atlantic Blue Sdn Bhd accepted the letter of award from TNB's unit TNB Engineering Corp Sdn Bhd for its appointment for the project. (The Edge)

Tune Protect Group Bhd has appointed Datuk Mohamed Khadar Merican as the insurer's chairman, effective immediately. Mohamed Khadar succeeds Ng Siek Chuan, who will be redesignated as a non-independent director following the expiry of his nine-year term of office. (The Edge)

KPJ Healthcare Bhd in response to a news report that said the group was set to be privatised has clarified that it has not yet received any proposal on the matter so far. KPJ will make the necessary announcement as required by the Main Market Listing Requirements if and when such a proposal is received. (The Edge)

Lambo Group Bhd has emerged as a new substantial shareholder in Sinaran Advance Group Bhd, formerly known as K-Star Sports Ltd, after acquiring 70.1m shares or 10.0% of Sinaran for RM6.5m. Lambo and its subsidiary Oriented Media Holdings Ltd has on between 10th September 2021 and 1st October 2021 acquired Sinaran shares from the open market. (The Edge)

Majuperak Holdings Bhd has reported that the Perak State Agricultural Development Corp (PPPNP) has proposed to subscribe for 56.9m new shares in the company, representing 20.0% of its existing issued shares. PPPNP will pay 33.5 sen per share or a total of RM19.1m for the shares. The share subscription is the most appropriate avenue to raise funds for the PN17 company while it is in the midst of formulating its proposed regularisation plan. (The Edge)

Source: Mplus Research - 6 Oct 2021