Market Review

Malaysia:. The FBM KLCI (-2.0%) declined for the eighth session after hovering in the negative territory for the whole trading session, succumbing to selling pressure in PCHEM and banking heavyweights. The lower liners trended lower, while the broader market was painted in red led by the property sector (-4.0%).

Global markets:. The US stockmarkets started November with record high as the Dow rose 0.3%, as corporate earnings lifted investors’ optimism on economic recovery. The European stockmarkets ended in green, while the Asia stockmarkets finished mixed.

The Day Ahead

Following the strong hammered down situation on the local front, we expect the sentiment will remain more negative over the near term without any significant positive fresh leads in the market. Nevertheless, with the Wall Street still in the upward trending tone, buying interest might spillover to technology stocks on the local front. Still, we expect mild bargain hunting activities to emerge once market is able to look beyond Cukai Makmur and contract notes stamp duty going forward. Commodities wise, the CPO price is hovering below RM5,000 level, while the crude oil price was mildly higher.

Stocks to watch:. Technology could be a sweet spot given the earnings certainty going forward. Also, we expect traders to lookout for recovery theme stocks under the tourism and consumer sectors. Meanwhile, TAWIN securing a RM2.5bn contract from South Korea’s POSCO may spur trading interest within metal related sector.

FBMKLCI Technical Outlook

The FBM KLCI closed significantly lower for the session post-budget, turning into a downtrend formation. The MACD Histogram has expanded lower, while the RSI is below 50. We believe the FBMKLCI could consolidate within the support zone between the 1,515-1,530 levels. Meanwhile, resistance will be located around 1,550-1,560

Company Brief

Hong Seng Consolidated Bhd’s wholly owned subsidiary HS Petchem Logistics Sdn Bhd s subleasing a tract of land in Prai Bulk Cargo Terminal, Pulau Pinang, to construct a tank farm and provide integrated logistics services to wholly owned subsidiary Hong Seng Industries Sdn Bhd as well as other nitrile butadiene latex (NBL) manufacturers. (The Star)

Pharmaniaga Bhd’s wholly owned subsidiary Pharmaniaga Research Centre Sdn Bhd has entered into a memorandum of understanding with the National Institutes of Biotechnology Malaysia (NIBM) to collaborate on vaccine research and development, including cooperation in the provision of technical services subject to services fees, the provision of industrial and stakeholders input. The MoU shall come into effect from 1st November 2021, and shall remain in force for a period of three years or until termination of the MoU, whichever is earlier. (The Star)

Gromutual Bhd (Gromutual) is planning to acquire a 9.79-ac piece of land in Johor to further expand its business in the development of ready-built industrial facilities (RBF) for sale or lease to the supply chain of multinational companies operating in Senai Airport City’s Free and Non-Free Zone from Senai Airport City Sdn Bhd, a member of the MMC Group, for RM21.3m. (The Edge)

Cycle & Carriage Bintang Bhd‘s 3QFY21 net profit declined 70.8% YoY to RM2.1m as sales volumes were hit by the Movement Control Order (MCO) 3.0 restrictions and supply-related challenges that affected production of automotive makers. Revenue for the quarter fell 48.2% to RM212.0m. (The Edge)

Ta Win Holdings Bhd (Ta Win) announced that it secured a RM2.50bn contract from South Korea’s POSCO International Corp to supply copper rods and wires as well as other copper-related products. The contract lasts for three years and Ta Win is expected to supply about 65,000 tonnes of the products for the whole three years, starting with 10,000 tonnes in the first year. (The Edge)

Greatech Technology Bhd’s 3QFY21 net profit increased 24.8% YoY to RM29.0m due to increased foreign exchange gain and lower administrative and marketing expense. Revenue for the quarter grew by 25.7% YoY to RM95.3m. (The Edge)

FGV Holdings Bhd (FGV) announced that the acquisition price for MSM Perlis Sdn Bhd has been revised to RM181.1m from RM175.0m previously due to the completion net debt and completion working capital of MSM Perlis at RM902,954 and RM5.2m respectively. FGV also announced that its logistics subsidiary FGV Transport Services Sdn Bhd will begin to provide delivery and cold storage solutions for temperature-sensitive products and perishable items. The initial investment was RM8.3m and expects RM3.2m in revenue for its cold chain business by 2024. (The Edge)

Source: Mplus Research - 2 Nov 2021