Turning the tide

Market Review

Malaysia:. The FBM KLCI (+1.9%) delivered a solid performance with more than two thirds of the key index components finished higher amid the calmer market sentiment. The lower liners extended their gains, while the plantation sector (+8.0%) emerged as the biggest winner on the mostly positive broader market.

Global markets:. The US stockmarkets came off from their session lows to trend higher as the Dow rose 0.3% on optimism over the potential agreement between Republicans and Democrats to avert a government debt default. European stockmarkets turned downbeat, while Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI jumped and closed at intraday high for the second session, lifted by the firm buying momentum in plantation stocks amid the surge in CPO price to above RM4,800. The market sentiment may remain positive-bias with both the Johor and Pahang states moving into the next phase of NRP starting from 8th of October, while vaccination rate for adult population stood at 88.4%. Commodities wise, the CPO price rallied amid tighter supply, while the copper and aluminium prices fell on demand fears. Over to the Brent crude oil, it retraced from the USD83 but still trading above the USD80 per barrel mark for now.

Sector focus:. We reckon the transportation & logistics sector may gain traction in tandem with the fourth session rise in Baltic Exchange Dry Index. Meanwhile, the investors may eye the recovery theme sectors especially aviation and tourism amid positive prospects from the resumption of interstate travel going forward.

FBMKLCI Technical Outlook

The FBM KLCI rebounded to close above the SMA50 level and the daily EMA120 level. Technical indicators turned positive as the MACD Histogram has extended a green bar, while the RSI crossed above the 50 level. As the key index crossed above the immediate resistance of 1,550, investor may monitor for the next resistance located at 1,580. Support is pegged along 1,530.

Company Brief

Kimlun Corporation Bhd is setting up an Islamic commercial papers (ICP) programme and a 7-year Islamic medium-term notes (IMTN) programme with a combined limit of up to RM800.0m. Proceeds raised from the sukuk Murabahah will be utilised for Shariah-compliant general corporate purposes of the group comprising the group’s working capital requirements, capital expenditures, investments, acquisitions and any other related expenses; and to refinance existing financing. (The Star)

Mieco Chipboard Bhd intends to undertake a fundraising exercise via a private placement, involving the issuance of new shares of up to 20.0% of the total issued shares of the company to third-party investors to be identified later, at an issue price to be determined later. Based on the indicative issue price of 44.7 sen per placement share, the proposed private placement is expected to raise gross proceeds of up to RM75.1m. Proceeds from the exercise are mainly intended to finance its proposed acquisition, either in whole or in part. (The Star)

AirAsia Group Bhd has signed an amendment agreement with aircraft maker Airbus SAS to convert the budget airline’s remaining A320 aircraft orders to the A321neo. In addition, AirAsia also announced that it will only allow fully vaccinated adult passengers on its flights, as it prepares to resume domestic and eventually international flight services. (The Edge)

Yinson Holdings Bhd has invested in Canada-based energy storage solutions company Sterling PBES Energy Solutions Ltd (SPBES) that is working to lower or eliminate dependence on fossil fuels in marine and industrial applications. The deal is done via the group’s subsidiary Yinson Green Technologies Pte Ltd (YGT)’s wholly-owned unit Singapore-based Yinson Venture Capital Pte Ltd. (The Edge)

Tenaga Nasional Bhd (TNB) will continue to balance the needs of the industry and its role as a listed company that gives fair returns to the people. TNB will also continue to support the nation’s growth and economic recovery through reliable electricity supply, reinvigorating the economy through the transformation of the energy industry, and helping the target groups. (The Edge)

Theta Edge Bhd, whose shares hit limit up yesterday, has been slapped with an unusual market activity (UMA) query by Bursa Malaysia. Theta Edge's share price jumped 29.9% or 38 sen to RM1.65 to its highest in five years after some 28.9m shares were traded. (The Edge)

Top Glove Corp Bhd has confirmed that the Department of Safety and Occupational Health (DOSH) is probing the death of a foreign worker on its factory floor earlier this week. Meanwhile, Top Glove reported that the group has always abided by the law and has adhered to all policies and procedures of reporting to the relevant authorities, when any such unfortunate event occurs. (The Edge)

Insas Bhd is listing its stockbroking arm M & A Securities Sdn Bhd (M&A) via a reverse takeover of furniture maker SYF Resources Bhd. The securities firm is valued at RM222.0m, representing a price-to-book valuation of 1.2x which is generally higher than most banks listed on Bursa Malaysia and a price-to-earnings ratio of 11.8x. Under the proposal, Insas will inject M&A into SYF, comprising 100.0m ordinary shares and 60.0m redeemable convertible preference shares, in exchange for 1.58bn new SYF shares. (The Edge)

Source: Mplus Research - 7 Oct 2021