Sustained buying momentum

Market Review

Malaysia:. The FBM KLCI (+0.2%) marked its fourth straight winning streak, snapping a five consecutive weekly decline to register a 2.6% WoW improvement. The lower liners were boosted by the more vibrant trading activities, while the technology sector (-0.8%) underperformed the positive broader market.

Global markets:. The US stockmarkets finished mildly lower on a choppy trading session as the Dow fell 0.03% on the sluggish jobs data with only 194,000 jobs added last month vs. consensus expectations of 500,000 jobs. European stockmarkets closed mixed, while Asia stockmarkets ended mostly positive.

The Day Ahead

The FBM KLCI continued to build on positive sentiment and elevated commodities prices on Friday, taking cue from buoyant regional markets. We expect the buying momentum on the local bourse to continue, backed by brighter economic prospects as the country will resume the interstate and overseas travel from today onwards after adults’ vaccination hitting 90%. Also, with the interstate travel may reboot the tourism and transportation companies specifically for the tourism segment. Meanwhile, the CPO price rallied, trading above RM4,950 level while the crude oil price stood above USD82 per barrel mark.

Sector focus:. Recovery theme stocks such as aviation, tourism and transportation companies may bode well following the announcement by the government over the weekend to reopen interstate travelling border. Besides, the elevated commodities environment should continue to benefit the plantation and O&G stocks.

FBMKLCI Technical Outlook

The FBM KLCI extended its winning streak for the fourth straight session as the key index continued hovering above the 1,560 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI hovered above the 50 level. The resistance is located around 1,580-1,600, while the support is located at 1,520.

Company Brief

Key Alliance Group Bhd’s associate Tree Med Sdn Bhd has secured a supply and delivery contract from the Health Ministry worth over RM32.0m, to supply reagents instrument placement for centralised chemical pathology test for a few hospitals in Kedah for four years. Reagents are commonly used to test for the presence of certain substances, as the binding of reagents to the substance or other related substances triggers certain reactions. (The Star)

Bank Islam Malaysia Bhd has taken over the listing status of BIMB Holdings Bhd (BHB) with effect from last Friday, making it the first pure-play full-fledged Islamic financial institution listed on the Main Market of Bursa Malaysia. Following completion of the exercise, BHB will be a wholly-owned subsidiary of Bank Islam, with the bank assuming the parent company's role, while Takaful Malaysia will be a standalone takaful operator. (The Edge)

Malaysia’s biggest wireless carrier Axiata Group Bhd and Indonesian conglomerate Sinar Mas Group are exploring options that could include a merger of their telecommunications operations in Indonesia. The owners of PT XL Axiata and PT Smartfren Telecom are working with advisers to weigh options that could also include agreements around sharing their networks. Separately, three shareholders of Tune Talk Sdn Bhd have filed for a court injunction to stop Axiata Group Bhd from including the sale of a 35.0% Tune Talk stake in the proposed merger of Celcom Axiata Bhd with Digi.com Bhd. (The Edge)

Hong Seng Consolidated Bhd is acquiring a 51.0% stake in health technologies provider Pow Pocket Sdn Bhd for RM200.0m to expand its healthcare businesses. Its unit HS Bio Sdn Bhd has inked a heads of agreement with Pow Pocket's major shareholder Russell Walter Boyd for the acquisition. (The Edge)

Solarvest Holdings Bhd will be transferring its listing to Main Market of Bursa Malaysia on 13th October 2021, less than two years after its initial public offering. Solarvest’s entire share capital of 664.0m shares will be transferred to the Main Market, together with its 158.5m warrants. (The Edge)

Classic Scenic Bhd plans to undertake a private placement of up to 20.0% of its total number of issued shares to raise up to RM30.4m, part of which to finance the acquisition of a new manufacturing plant to expand its production capacity. The proposed placement will entail the issuance of up to 48.2m placement shares, which will be issued to investors at a price to be decided. The expected proceeds raised is based on an illustrative issue price of 63.0sen. (The Edge)

Source: Mplus Research - 11 Oct 2021