Pullback persists

Market Review

Malaysia:. The FBM KLCI (-0.2%) trended lower after hovering in the negative zone throughout the session as the key index fell 0.6% WoW. The lower liners edged mostly higher, while the broader market closed mostly lower with the REIT sector (- 0.7%) underperformed.

Global markets:. The US stock markets closed mixed as the Dow climbed 0.2%, but the S&P 500 and Nasdaq shed 0.1% and 0.8% respectively, dragged down by concern over inflationary pressure and pullback in technology stocks. European stock markets finished mostly higher, while Asia stock markets ended mixed.

The Day Ahead

The FBM KLCI closed lower on Friday amid lacklustre trading interest as investors remained on the tenterhooks ahead of the Budget 2022. The local bourse may continue to trade sideways for the week amid dearth of fresh lead while investors awaiting more details on Budget 2022 to be tabled on Friday. Meanwhile, the recovery theme sectors might gain momentum as bargain hunting activities may emerge on the back of brighter economic prospects. Commodities wise, the CPO price staged a pullback, while the crude oil price held above the USD85 per barrel mark.

Sector focus:. We believe the recent pullback of some recovery theme sectors will be a good opportunity for bargain hunting. Investors may focus on banking, property, and consumer related stocks as well as construction sector ahead of the Budget 2022.

FBMKLCI Technical Outlook

The FBM KLCI pulled back further from the 1,600 psychological level as the key index closed around its daily EMA 9 level. Technical indicators remained positive as the MACD Histogram has extended a green bar, while the RSI hovering above the 50 level, showing some overbought signal. Resistance is located at 1,600, while the support is pegged along 1,580.

Company Brief

Bursa Malaysia Bhd has resolved to suspend the trading of securities of Serba Dinamik Holdings Bhd, including all structured warrants, effective from last Friday afternoon. The suspension in the trading of Serba Dinamik and all structured warrants relating to Serba Dinamik takes effect from 2.30pm on 22nd October 2021 until further notice. (The Star)

Ageson Bhd's wholly owned indirect subsidiary Solidvest Properties Sdn Bhd has entered into a partnership with ShuangLing Holdings Ltd to undertake a proposed residential development project with a gross development value of about RM95.2m in Mukim Batu, Daerah Gombak, in Selangor. The development period is for about two years from the expected commencement date. (The Star)

Malaysian Genomics Resource Centre Bhd (MGRC) is making its genetic screening tests available in Indonesia via a partnership with medical and pharmaceutical distributor Medifirst Sdn Bhd. With Medifirst's experience in the distribution of medical and pharmaceutical products, the partnership will see Medifirst offer MGRC's genetic screening tests in Indonesia through the latter's network of primary care physicians and specialists in hospitals and medical centres, among others. (The Edge)

KNM Group Bhd has secured a purchase order for the supply of air-cooled heat exchangers worth approximately RM111.0m. The group indirect wholly-owned subsidiary FBM Hudson Italiana SpA accepted the purchase order on the same day from engineering outfit Bechtel International Inc. The supply and delivery duration of the transaction is approximately 20 months from the date of the purchase order. (The Edge)

Opcom Holdings Bhd has entered into a collaboration agreement with Global Forway Sdn Bhd to form a 60:40 joint venture (JV) company known as Opcom Vision Sdn Bhd in a move to push into the 5G sector. Both entities bring complementary expertise and experience to the partnership, which will strengthen the JV value proposition in its tender efforts for contracts. (The Edge)

Malaysia Airports Holdings Bhd (MAHB) has appointed Datuk Iskandar Mizal Mahmood as managing director, effective 25th October 2021. The airport operator also announced the resignation of Datuk Mohd Shukrie Mohd Salleh, 47, as group chief executive officer (CEO), citing to pursue other opportunities, effective 24th October 2021. Mohd Shukrie has been at the post for only 19 months since joining MAHB in March 2020. (The Edge)

AME Elite Consortium Bhd's wholly-owned subsidiary AME Construction Sdn Bhd has been awarded a RM359.0m contract to build a new integrated production facility, logistics warehouse, and office buildings for Ye Chiu Non-Ferrous Metal (M) Sdn Bhd. (The Edge)

Gagasan Nadi Cergas Bhd has secured a contract from the Employees Provident Fund's wholly-owned subsidiary Kwasa Land Sdn Bhd to develop an affordable housing project in Selangor with a gross development value of RM1.00bn. The proposed development of two parcels of land in Kwasa Damansara Township, Petaling, Selangor has a total land size of approximately 39.1-ac. The proposed development will consist of approximately 3,990 units of affordable residential housing with an estimated construction value of RM750.0m. (The Edge)

CIMB Group Holdings Bhd announced that Tigor M Siahaan, president director and CEO of CIMB Niaga, has tendered his resignation with effect from 21st October 2021. CIMB Niaga's board of commissioners and nomination & remuneration committee have immediately activated its selection and transition planning process and will announce the new appointment in due course. (The Edge)

Gamuda Bhd has proposed to establish an employees' share option scheme (ESOS) with the number of shares to be issued equivalent to 10.0% of its issued share capital. All its executive directors namely Datuk Lin Yun Ling (group managing director), Datuk Ha Tiing Tai (deputy group managing director), Mohammed Rashdan Mohd Yusof (deputy group managing director) and Justin Chin Jing Ho (managing director) are deemed interested in the proposed ESOS scheme. (The Edge)

Source: Mplus Research - 25 Oct 2021