Market Review

Malaysia:. The FBM KLCI (+0.4%) rebounded, snapping a 8-day losing streak as positive sentiment at Wall Street spilled over to the local bourse, shrugging off market concerns over Cukai Makmur and contract notes stamp duty. The lower liners trended higher, while the broader market was traded in positive tone.

Global markets:. The US stockmarkets extended its rally as the Dow (+0.4%) closed above the 36,000 level, powered by gains in the technology and healthcare sectors. The European stockmarkets finished mixed but the Asian stockmarkets were mostly in the red.

The Day Ahead

Given the rebound on the FBMKLCI, we expect the near term floor has been found and investors could have digested the proposed one-off “Cukai Makmur” and the contract notes stamp duty changes. All in all, the negative earnings impact could be lesser than expected, hence bargain hunting activities have emerged. Also, with the strong broad rally on the Wall Street, we do opine that the buying interest may spillover to technology stocks on the local front, which could be one of the sweet spot in our local bourse. Commodities wise, the CPO price managed to maintain its trading range along RM4,800-5,000, while Brent oil is still hovering above USD84.

Sector focus:. We believe investors might lookout for recovery theme stocks going into the final two months in 2021. Also, technology stocks may be lifted by the strong sentiment on Wall Street. Overall, broad market may be supported by bargain hunting activities at least for the near term.

FBMKLCI Technical Outlook

Following the significant decline on Monday and mild bargain hunting activities on the local front, we think the market may turn into consolidation phase in the near term. Technical readings are still negative for the FBM KLCI; the MACD Histogram extended another negative bar, while RSI is below 50. The resistance is located around 1,550-1,560. Support is pegged around 1,520.

Company Brief

Nestlé (Malaysia) Bhd’s 3QFY21 net profit grew 15.3% YoY to RM148.0m as sales picked up in both domestic and export market. Revenue for the quarter rose 3.6% YoY to RM1.44bn. An interim dividend of 70.0 sen, payable on 15th December 2021 was declared. (The Star)

Ramssol Group Bhd (Ramssol) and Impiana Hotels Bhd (Impiana) have entered into a two-year partnership to provide Human Resources Development Corporation (HRD Corp) certified training programmes for Malaysia’s workforce. Both companies are targeting approximately RM100.0m in training value over the next 24 months. (The Star)

MR DIY Group (M) Bhd’s 3QFY21 net profit declined 20.4% YoY to RM90.4m as it saw higher operating expenses from higher store count, while outlets remained closed during the Covid-19 movement restriction measures. Revenue for the quarter, however, climbed 3.8% YoY to RM768.0m. A dividend of 0.65 sen per share, payable on 29th November 2021 was declared. (The Edge)

Dufu Technology Corp Bhd's 3QFY21 net profit jumped 57.5% YoY to RM20.3m as it enjoyed higher revenue, economies of scale and a favorable product mix. Revenue for the quarter rose 19.8% to RM91.0m. (The Edge)

Malaysia Marine and Heavy Engineering Holdings Bhd’s (MHB) 3QFY21 net loss stood at RM23.9m, vs. a net profit of RM2.6m in the previous corresponding quarter, as the company’s heavy engineering and marine units registered operating losses due to factors such as the Covid-19 movement restrictions. REvenue for the quarter, however, rose 5.4% YoY to RM389.3m. (The Edge)

Ibraco Bhd has secured a construction contract worth RM375.0m in Kuching, Sarawak. The company accepted the letter of award from Lestari Asiabina Sdn Bhd as turnkey contractor for the job, which involves the construction of road and drain reserves, condominium, apartment and shophouses, on Lot 6036, Block 26, Muara Tuang Land district. Construction works are expected to start from 3Q2022 and be completed by 4Q2026. (The Edge)

NCT Alliance Bhd has been appointed to revive two phases of an abandoned Genting Valley project involving 168 bungalow units on 80.0-ac of freehold land, in Batang Kali, Selangor, that carry an estimated gross development value of RM500.0m. The company has been proposed by the liquidator to undertake the scheme proposal to revive the development. (The Edge)

Carlsberg Brewery Malaysia Bhd has confirmed that the prices of some of its drinks will be revised from 15th November 2021 to account for rising costs, as per a leaked letter that had been making the rounds on WhatsApp. The contents of the letter dated 14th October 2021 are an official communication from the company to its trade partner. The company reiterated that the price adjustments are to its trade partner and it does not determine retail prices. (The Edge)

Trive Property Group Bhd plans to undertake a private placement to raise up to RM19.9m by issuing 342.9m shares (up to 20.0% of its issued shares) to third party investors to be identified, to upgrade its newly acquired office building, Persoft Tower. While the actual issue price is yet to be fixed, the expected proceeds to be raised is based on an illustrative price of 5.8 sen per placement share. (The Edge)

Source: Mplus Research - 3 Nov 2021