Stretching higher

Market Review

Malaysia:. The FBM KLCI (+0.4%) started off the week on a buoyant manner to record its fifth winning session, boosted by gains in selected banking heavyweights. The lower liners also extended their upbeat tone, while the healthcare (-0.8%) and utilities (-0.1%) sectors declined on the broader market.

Global markets:. The US stockmarkets extended their losses as the Dow fell 0.7% after the rally of crude oil prices sparked further concern that the inflationary pressure may not be transitionary. European stockmarkets ended mixed, while Asia stockmarkets ended mostly higher.

The Day Ahead

The FBM KLCI climbed for another session, with banking stocks leading the way higher as investors’ sentiment turned more positive following the government’s announcement on interstate border reopening over the weekend. Despite the selling pressure on Wall Street, we expect the foreign funds that has continuously buying into the local equities, coupled with the firmer commodity prices in crude oil and crude palm oil will provide a healthy sentiment to the local exchange over the near term. As Malaysia is ready to enter the endemic phase, prospects of the economic recovery should persist and positive momentum could continue at least for the near term. The crude oil price was traded above USD83 per barrel mark, while the CPO price is consolidating around the all-time-high region.

Sector focus:. Plantation and energy stocks may remain upbeat considering the high commodity prices. Besides, the recovery theme stocks are still under the limelight following the interstate border reopening announcement. We expect the renewable energy stocks may trade higher ahead of the Budget 2022.

FBMKLCI Technical Outlook

The FBM KLCI started the week on an upbeat mode as the key index touched the SMA 200 level before closing above 1,570. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI is above 50. The resistance is pegged along 1,580-1,600, while the support is located at 1,550.

Company Brief

Gas Malaysia Bhd has announced the average natural gas selling price for the distribution segment by its wholly-owned subsidiary Gas Malaysia Energy and Services Sdn Bhd (GMES). For 4Q21, beginning 1st October 2021 to 31st December 2021, the average natural gas selling price is RM36.42/MMBtu. This includes the Transportation Tariff of RM1.19/MMBtu and Distribution Tariff of RM2.05/MMBtu as previously approved by the Energy Commission. (The Star)

YB Ventures Bhd is planning to raise up fresh capital to pay for the installation of rooftop solar PV system at its factory in Kulai, Johor and future investment. The company has proposed to place out up to 20.0% of its issued share capital to raise between RM21.1-145.9m. YB Ventures has allocated RM16.0m for the rooftop solar PV system and the rest of the proceeds will be set aside for future investments and working capital. (The Star)

Jade Marvel Group Bhd (JMG) has entered into a memorandum of understanding (MoU) with YHL Foods Sdn Bhd for a proposed joint venture (JV) to set up an integrated frozen seafood processing facility with cold storage facilities at Bio Desaru in Kota Tinggi, Johor. The MoU represents a planned diversification into the food business for JMG, which is already a diversified company with businesses including construction and property development. (The Edge)

The Federal Court has fixed 9th February 2022 as the hearing date for Malaysia Competition Commission (MyCC)-related cases in its appeals against AirAsia Group Bhd and Malaysian Airline System Bhd (MAS) along with Grab Holdings Inc's appeal, while another bench upheld MyCC's fine imposed on MyEG Services Bhd (MYEG). (The Edge)

Solarvest Holdings Bhd has launched Solarvest Innovation Lab 2021 (SIL 2021), a start-up programme to spur innovation and entrepreneurship development in Malaysia with particular emphasis on renewable energy, green technology and financial technology. It is partnering with the likes of Malaysian Technology Development Corp, Telekom Malaysia Bhd (TM), Malaysian Global Innovation and Creativity Centre, OCBC Bank (Malaysia) Bhd, INTI International University and Colleges, Junior Chamber International Malaysia, the JCI Creative Young Entrepreneurs Award and many other notable names to accelerate the nation's green agenda and digital revolution through the search for bright and innovative ideas from budding start-ups. (The Edge)

JAKS Resources Bhd has given investors assurance that the recent fluctuations in coal prices will not impact the group's profit generated from one of its power plants in Vietnam. Coal prices for JAKS Hai Duong Power Plant in Vietnam are passed through to the off-taker, Vietnam Electricity. (The Edge)

IOI Corp Bhd is aiming to increase its oleochemical earnings by RM100.0m, or more than 35.0%, by FY21. The group had commenced construction of a new 110,000 tonne per year oleochemical plant in Prai, Penang with capital expenditure of RM220.0m. The plant is poised to be completed by 2H22 and help boost its oleochemical earnings for FY21 by more than 35.0%. (The Edge)

Damansara Holdings Bhd has announced the appointment of Muaazam Mahmud as its group chief executive officer. Muaazam has been Johor Corp Bhd's (JCorp) head of transformation since 2020. Muaazam's appointment came after JCorp re-emerged as the largest shareholder of Damansara Holdings after buying a 49.6% stake in the company for RM78.9m in September 2021. (The Edge)

Genting Bhd's wholly owned subsidiary, Resorts World Las Vegas LLC has taken steps to remedy an inadvertent "system error" that resulted in the under withholding or deduction of taxes on tips received by some employees and that the amounts that should have been deducted will be withheld over the remaining pay periods in 2021. Resorts World Las Vegas' internal memorandum on the system issues was posted on Twitter, hence leading to reporters' enquiries on the matter. (The Edge)

Source: Mplus Research - 12 Oct 2021