Sustaining above 1,600

Market Review

Malaysia:. The FBM KLCI (+0.02%) traded on a rangebound manner before edging marginally higher as mild profit taking activities was also supported by bargain hunting activities in selected banking heavyweights. The lower liners closed mostly higher, but the broader market closed mostly lower.

Global markets:. The US stockmarkets extended their gains as the Dow climbed 0.4%, spurred by the on-going batch of solid corporate results, while concern over the potential stagflation has taken a backseat. European stock markets were upbeat, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI showed marginal gains after flirting between gains and losses yesterday. Given the foreign funds are still buying into our local equities, we expect the bullish momentum to sustain at least for the near term ahead of the tabling of Budget 2022 next week. Also, we still expect recovery theme stocks may remain in focus with the reopening of business activities in various segments following the ongoing vaccination programme. Meanwhile, both the CPO and crude oil prices extended their rally, with the former surging above RM5,000 and the latter trading above USD85 per barrel mark.

Sector focus:. Investors may continue focus on the laggards of the recovery theme play amid recovery while awaiting Budget 2022 next week. Sectors such as consumer, construction and renewable energy may be in focus. Besides, we expect the energy and plantation counters should be lifted by the firmer crude oil and CPO prices. Technology stocks may return into the limelight after the recent consolidation and a positive overnight Wall Street.

FBMKLCI Technical Outlook

The FBM KLCI extended its gains for the third straight session and closed firmly above the 1,600 psychological level. Technical indicators remained positive; the MACD Histogram has extended a green bar, while the RSI hovered above the 50 level. Next resistance is located at 1,620, while the support is pegged along 1,580.

Company Brief

Tenaga Nasional Bhd (TNB) unit Vantage RE Ltd, has completed its acquisition of a 49.0% stake in Blyth Offshore Demonstrator Limited (BODL) from EDF Renewables, marking the power giant’s maiden entry into the international offshore wind market. BODL owns an operating offshore wind asset comprising five turbines with installed capacity of 41.5MW (Blyth 1), and development rights for an innovative floating offshore wind project of up to 58.4MW (Blyth 2) located off the Northumberland coast in England. (The Star)

Mah Sing Group Bhd has completed an issuance of secured and unrated Sukuk Murabahah of RM300.0m in nominal value under the company’s existing Sukuk Murabahah Programme. The secured and unrated Islamic medium-term notes has a tenure of 5 years and carries a fixed profit rate of 4.9% per annum payable semi annually. (The Star)

CIMB Bank Bhd, the entity of CIMB Group Holdings Bhd has entered into a sustainability-linked derivative (SLD) transaction with Standard Chartered Malaysia. The SLD takes the form of an interest rate swap with a notional value of RM2.45bn for hedging purposes. The ringgit-denominated SLD transaction is the first of its kind globally and Asia’s largest environmental, social and governance-linked derivative transaction by notional value to date. (The Edge)

Following the completion of the disposal of its entire 50.0% stake in MRCB George Kent Sdn Bhd to Malaysian Resources Corporation Bhd on 13th October 2021, George Kent (Malaysia) Bhd is looking forward to exploring new growth opportunities in the domestic and regional railway space under the 12th Malaysia Plan’s policy enabler of enhancing connectivity and transport infrastructure. (The Edge)

Bintai Kinden Corp Bhd has entered into a distribution agreement with Scientillence Sdn Bhd for the non-exclusive distribution of hemodialyzer in the private and commercial sector. The firm subsidiary Bintai Healthcare Sdn Bhd signed the agreement for a one-year period, which can be extended an additional five years subject to terms and conditions. (The Edge)

Daya Materials Bhd announced that it has received Bursa Securities' approval for its regularisation plan. The plan was submitted to the regulator on 31st December 2020. The regularisation plan will see the exchange of the total number of issued shares of Daya Materials comprising 2.04bn shares for 20.4m new shares in Propel Global Sdn Bhd (Newco), on the basis of one new Newco share for every 100 existing Daya Materials shares held on an entitlement date to be determined later. It will also see the proposed assumption of the listing status of Daya Materials by Newco. (The Edge)

Hua Yang Bhd’s 2QFY22 net loss widened to RM8.7m, from a net loss of RM5.8m recorded in the previous corresponding quarter, dragged by slower sales and construction progress. Revenue for the quarter fell 50.4% YoY to RM16.1m. (The Edge)

Classic Scenic Bhd’s wholly-owned subsidiary Finesse Moulding (M) Sdn Bhd has acquired a piece of industrial land and a factory on it in Bidor, Perak for RM12.5m from VE Surpass Frame (M) Sdn Bhd. The purchase price will be financed through proceeds to be raised from the proposed private placement announced on 8th October 2021. (The Edge)

Pestech International Bhd has entered into a Memorandum of Understanding (MoU) with Gartena Holdings Ltd to explore the opportunity to cooperate in proposing and developing Waste-2-Energy solutions in the ASEAN region. Gartena is a company operating in the United Kingdom and Sweden which has developed and holds the worldwide patent for the world's technically advanced, efficient and environmentally friendly Waste-2-Energy process. (The Edge)

Noting that China has the highest growth potential in the luxury car market, Sime Darby Bhd plans to grow its luxury vehicle presence in the country by establishing a foothold in the second and third tier cities. (The Edge)

Carimin Petroleum Bhd has declared a special dividend of 5.0 sen for FY21 to reward its shareholders. The group’s shares will trade ex-dividend on 3rd November 2021, and the dividend will be paid on 17th November 2021. Together with the first and second interim dividends of 0.5 sen each, Carimin’s total payout for FY21 will be 6.0 sen. (The Edge)

KIP Real Estate Investment Trust's (REIT) 1QFY22 net property income (NPI) fell 2.3% YoY to RM13.7m, on the back of lower promotional area income amid the restrictions on mall level activities. Revenue for the quarter fell 6.0% YoY to RM17.1m. A first interim distribution per unit of 1.55 sen, payable on 23rd November 2021, which includes a non-taxable portion of 0.71 sen derived from capital allowances and tax-exempt income was declared. (The Edge)

SKB Shutters Corp Bhd has proposed to undertake a bonus issue of 2 new shares for every 1 share held. It also announced free warrants on the basis of 1 warrant for every 2 shares held. The proposals, which are subject to shareholders' approval, could involve the issuance of 88.0m bonus shares, and up to 66.0m warrants. (The Edge)

FGV Holdings Bhd hopes to formalise the appointment of an independent auditor by November 2021 in its effort to remove the US ban on its palm oil products. It is currently engaging a US-based legal counsel to finalise the terms of the appointment. The independent auditor, it said, will assess the group's operations against the 11 International Labour Organization indicators of forced labour. (The Edge)

Ageson Bhd has decided to scrap its proposed rights issue of irredeemable convertible unsecured loan stocks (ICULS). Ageson will explore an alternative avenue to raise funds expeditiously for its operational requirements. (The Edge)

Source: Mplus Research - 21 Oct 2021