Market Review

Malaysia:. The FBM KLCI (-0.3%) erased all its intraday gains to record its seventh straight session of decline and the key index fell 1.6% WoW. The lower liners managed to chalk in meagre gains, while the broader market ended mixed with the healthcare sector (+1.1%) outperformed.

Global markets:. The US stockmarkets marched higher after enduring a choppy trading session as the Dow added 0.2%, lifted by the solid corporate earnings from Exxon and Chevron that offset the disappointments from Apple and Amazon. Both the European and Asia stockmarkets ended mixed.

The Day Ahead

The FBM KLCI declined significantly amid continued selling activities prior to the Budget 2022 tabled on Friday. Although the Budget 2022 is viewed as expansionary, we expect the surprise of the one-off “Cukai Makmur” and contract notes stamp duty changes for listed share trading may offset the goodies from the Budget 2022, at least for the near term. This might lead to knee-jerk reaction selling pressure on FBM KLCI and broader market today. Nevertheless, we expect the bargain hunting activities to emerge once the market players look beyond the oneoff tax and focuses on the economic recovery tone going forward. Commodities wise, the CPO price rebounded above the RM5,000 level, while the crude oil price was mildly higher.

Sector focus:. Following the rally in the healthcare sector on Friday, we believe traders would refocus on Budget 2022 beneficiaries. Sectors such as consumer, automotive, telecommunications, technology, tourism and EVs related counters.

FBMKLCI Technical Outlook

The FBM KLCI closed around the EMA60 level after fluctuating between the positive and negative territories, marking its 7th session of losses. Technical indicators remained negative as the MACD Histogram stayed below zero, while the RSI continued hovering below the 50 level. Next resistance is located at 1,580, while the support is pegged along 1,515-1,530.

Company Brief

Genting Malaysia Bhd’s (GenM) 49.0%-owned associate Empire Resorts Inc has issued US$300.0m (RM1.20bn) bonds due 2026 on the Singapore Exchange (SGX). The notes denominated in US Dollar, which pay an annual interest rate of 7.8%, will be listed and quoted on the SGX's Bonds Market on 1st November 2021. (The Edge)

KNM Group Bhd indirect wholly-owned subsidiary FBM Hudson Italiana SpA had accepted a purchase order (PO) from Saudi Aramco’s subsidiary Saudi Basic Industries Corp (SABIC) for the supply of a reactor gas-gas exchanger, amounting to approximately RM17.7m. The supply and delivery duration of the transaction is for a period of approximately 55 weeks from the date of the PO. (The Edge)

Bursa Malaysia Bhd’s 3QFY21 net profit fell 34.4% YoY to RM79.8m, on the back of lower revenue. Revenue for the quarter declined 26.8% YoY to RM174.0m. (The Edge)

Westports Holdings Bhd’s 3QFY21 net profit dipped 2.4% YoY to RM199.1m, on higher operational cost of fuel. Revenue for the quarter fell 4.4% YoY to RM504.9m. (The Edge)

Maxis Bhd’s 3QFY21 net profit fell 10.7% YoY to RM325.0m, on higher depreciation and amortisation charges. Revenue for the quarter, however, grew 2.3% YoY to RM2.26bn. A third interim dividend of 4.0 sen per share, payable on 30th December 2021 was declared. (The Edge)

AirAsia Group Bhd’s consolidated air operator’s certificate recorded a load factor of 67.0% in 3Q21. This was down by 1.0% from the same period last year. Its seat capacity fell 82.0% Y.oY during the quarter under review. (The Edge)

Kuala Lumpur Kepong Bhd (KLK) will subscribe for 9.1m new shares of Synthomer plc under the UK-listed speciality chemicals company's proposed placement exercise. KLK and its wholly-owned subsidiary KL-Kepong International Ltd currently hold a total of 90.7m shares in Synthomer, or 21.3% of its issued share capital. The subscription cost for the new shares will be £44.0m (RM251.1m), which will be financed by existing cash reserves and bank borrowings. (The Edge)

Cahya Mata Sarawak Bhd (CMSB) has agreed to extend the ongoing investigation into its former group chief financial officer (CFO) Syed Hizam Alsagoof over allegations of possible financial mismanagement in relation to the group's investments and operations by another month until end-November. (The Edge)

Source: Mplus Research - 1 Nov 2021