Into consolidation

Market Review

Malaysia:. The FBM KLCI (-0.01%) shaved all its intraday gains to close marginally lower alongside with the mostly negative performance across regional peers. The lower liners closed mostly lower, while the broader market also ended mostly downbeat with the technology sector (-0.7%) taking the worst hit.

Global markets:. The US stockmarkets edged higher as the Dow climbed 0.2% in anticipation of solid corporate earnings this week from 5 technology giants such as Facebook, Alphabet, Microsoft, Apple and Amazon. European stockmarkets closed mostly upbeat, but Asia stockmarkets ended mostly weaker.

The Day Ahead

The FBM KLCI’s gains faded in the final trading hour, leaving the key index in the negative territory as trading remained lacklustre ahead of the tabling of Budget 2022. Nevertheless, tracking the strong gains from the overnight Wall Street, we believe bargain hunting activities may surface on the local bourse. Also, foreign investors continued to stay as net buyers over the past 5 trading days. We expect trading focus to surround on the potential beneficiaries in the upcoming Budget 2022. Both the CPO and Brent oil prices staged a rebound as energy crunch persists, while gold crossed above USD1,800 mark.

Sector focus:. The technology may be focused following the overnight gains in Nasdaq. Besides, the bounce in commodity prices such as CPO, Brent oil and gold may shine a light on plantation, oil & gas and gold sectors. We expect construction and property sectors to trend higher prior to the Budget 2022.

FBMKLCI Technical Outlook

The FBM KLCI staged a marginal loss yesterday as the key index closed slightly below the daily EMA9 level. Technical indicators were slightly mixed with MACD Histogram turning softer, but the RSI is hovering above 50. Resistance is pegged at 1,600, while the support is envisaged along 1,580.

Company Brief

Genetec Technology Bhd’s 2QFY21 net profit surged 518.3% YoY to RM16.3m, underpinned by higher sales volume and improved operational efficiency from its electric vehicle (EV) sector. Revenue for the quarter increased 53.2% YoY to RM59.3m. Genetec also proposed to undertake a bonus issue of 661.6m new shares on the basis of 12 bonus shares for every one share held (The Star)

Supermax Corp Bhd has cautioned that there could be a material adverse impact on its financial performance should efforts to divert its US glove shipments to other markets be unsuccessful. The extent of the adverse impact will also be determined by the duration of the withhold release order by the US Customs and Border Protection (CBP). Consequently, the group would take steps to divert goods bound for the US to other markets where possible. (The Star)

Serba Dinamik Holdings Bhd whose securities have been suspended from trading has reported that Bursa has allowed to postpone the submission to 30th November 2021. Serba Dinamik has also denied that its directors had been given factual findings update by Ernst & Young (EY), which is undertaking the special independent review of the group's financial accounts. (The Edge)

Yinson Holdings Bhd has made a lodgement with the Securities Commission Malaysia (SC) for the establishment of the Sukuk Wakalah Programme of up to RM1.00bn. The first issuance under the programme will be made within 60 business days from the lodgement date of 22nd October 2021. The programme has been assigned ratings of A+IS and A1 by Malaysian Rating Corp Bhd (MARC) and RAM Rating Services Bhd respectively. (The Edge)

Petronas Gas Bhd's 65.0%-owned subsidiary Pengerang LNG (Two) Sdn Bhd (PLNG2SB) has announced a non-binding expression of interest (EOI) for a proposed liquefied natural gas (LNG) storage tank in Pengerang, Johor to be used for LNG storage and reloading activities. The EOI, which was published on 1st October 2021, and scheduled to end on 30th November 2021, aims to support growth of the LNG emerging market across Asia. (The Edge)

Raffles Education Corp Ltd has received an order jointly issued by the Monetary Authority of Singapore and the Commercial Affairs Department requiring the group to provide certain documents relating to loan facilities extended by Affin Bank Bhd to the group ‘s subsidiaries Raffles K12 Sdn Bhd and Raffles Iskandar Sdn Bhd. This order is in connection with an investigation into a potential offence under Chapter 289 of Singapore’s Securities and Futures Act. (The Edge)

Cepatwawasan Group Bhd’s 3QFY21 net profit jumped 117.2% YoY to RM11.6m, underpinned by higher palm oil prices. Revenue for the quarter rose 64.6% YoY to RM103.9m. (The Edge)

Telekom Malaysia Bhd (TM), via its wholesale domestic and international business arm TM Wholesale, has collaborated with nine tower providers, enabling it access to the companies' tower site facilities. The collaboration will allow the high-speed fibre optic network to connect to the towers, enabling high quality network performance and capability. (The Edge)

Genting Malaysia Bhd’s operating unit Resorts World Genting (RWG) has reported that US fast-food chain Five Guys Enterprises LLC had opened its doors at RWG. Five Guys outlet at RWG is the burger joint’s first outlet in Malaysia. (The Edge)

Annum Bhd has teamed up with Greentech IOT Technology Sdn Bhd to undertake a RM62.3m subcontract under the Sarawak Water Supply Grid Programme. The job involves the supply, laying and commissioning of pipelines from the Salim Water Treatment Plant, Sibu Water Board to Kanowit Sibu Division, as well as piling works and mechanical and electrical works. Annum will be entitled to 50.0% of the net profit in relation to the project. (The Edge)

Southern Cable Group Bhd is slated to transfer its listing to the Main Market of Bursa Malaysia on 28th October 2021. The group entire share capital of 800.0m shares will be transferred to the Main Market and traded under the stock name SCGBHD and stock code 0225. (The Edge)

Cabnet Holdings Bhd wholly owned subsidiary CEE M&E Engineering Sdn Bhd has been appointed as a works package contractor for the electrical work package for a factory in Kedah for a contract sum of RM22.6m. CEE accepted the letter of award from Kinetics Systems Malaysia Sdn Bhd. (The Edge)

Bursa Malaysia Securities has publicly reprimanded JAKS Resources Bhd and its principal adviser Kenanga Investment Bank Bhd for breaches of the Main Market listing requirements. JAKS and Kenanga Investment Bank had failed to ensure that there were at least 10 market days’ notice from the date the books closing date (BCD) was announced to the actual BCD, for the adjustment to the exercise price or additional number of JAKS warrants (JAKS-WB) arising from the proposed rights issue with warrants announced on 22nd May 2020. (The Edge)

Oriental Interest Bhd’s 4QFY21 net profit slipped 66.4% YoY of RM6.6m, mainly as a result of temporary shutdown of the group's business activities and operations in compliance with reimposition of the nationwide full lockdown (MCO 3.0) by the government to curb the spread of the Covid-19 pandemic. Revenue for the quarter declined 2.7% YoY to RM60.7m. (The Edge)

Hup Seng Industries Bhd has announced the demise of its managing director Kuo Choo Song. Kuo, 89, was one of the founders of Hup Seng Co, which was established in 1958 and subsequently became Hup Seng Perusahaan Makanan (M) Sdn Bhd in 1974. (The Edge)

Axis Real Estate Investment Trust (Axis REIT) has acquired a warehouse logistics facility built on leasehold land in Pasir Gudang, Johor for RM32.0m. The property, with a net lettable area of 276,000-sqf comprises one block of single-storey warehouse, together with another three blocks of single-storey warehouse. (The Edge)

Samaiden Group Bhd plans to raise up to RM34.0m via a private placement to fund its investment in renewable energy assets. The private placement will involve 31.5m shares or 10.0% of Samaiden's total number of issued shares, which will be issued to third-party investors to be identified later. The issue price of the private placement will be fixed later date. (The Edge)

TDM Bhd's healthcare arm Kumpulan Medic Iman Sdn Bhd (KMI Healthcare) is set to develop the first private specialist hospital in Terengganu's Kemaman district. KMI Healthcare signed a memorandum of understanding (MoU) with the Kemaman Municipal Council to facilitate the construction of the hospital on 5.4-ac of land owned by the council. The 100-bed hospital is capable of being expanded to 200 beds in near future. (The Edge)

Newly appointed Malaysia Airports Holdings Bhd (MAHB) managing director Datuk Iskandar Mizal Mahmood has resigned as Theta Edge Bhd’s independent non-executive director. The resignation was due to other work commitment. (The Edge)

Straits Energy Resources Bhd has proposed a private placement to raise up to RM33.6m, over half of which it plans to use to acquire a shipping agency service provider to expand its port operation and facility management services. The group plans to issue up to 186.8m shares for the placement at an indicative price of 18 sen per share. (The Edge)

Source: Mplus Research - 26 Oct 2021