Market Review

Malaysia:. The FBM KLCI (-0.4%) pared gains from the previous session amid cautious trading prior to the Deepavali holiday and the US Fed’s policy meeting. The lower liners retreated, while the broader market ended mostly in the negative territory with the energy sector (-1.4%) taking the biggest hit.

Global markets:. The US stockmarkets closed mixed as the Dow (-0.1%) faded lower as investors mulled the US Fed’s decision to begin tapering asset purchases later this month, while Nasdaq gained 0.8%. Meanwhile, both the European stockmarkets and the Asian stockmarkets were higher.

The Day Ahead

The Fed’s move to begin tapering this month is within consensus expectations and overall market conditions in the US are still positive, especially on Nasdaq. Hence, we expect the positive sentiment to spillover to tech stocks on the local front. However, broader market sentiment could have limited upside potential as investors are still digesting the impact from “Cukai Makmur” and stamp duty changes moving into 2022. Meanwhile, on the commodity markets, the CPO managed to charge above RM5k, while the Brent oil has traded in a volatile manner hitting the intra-day high of USD84.48 and declined near the USD81 at the time of writing as Saudi TV reported that Saudi Arabia's oil output may surpass 10m barrels per day following the easing of Covid-19 pandemic.

Sector focus:. We think investors may still consider recovery theme sectors such as tourism, aviation to participate, while short term theme may focus on the upcoming November reporting season. Also, technology stocks should be decent to be traded on the short to mid-term following the positive sentiment from Nasdaq.

FBMKLCI Technical Outlook

Following the significant decline on Monday and the mild bargain hunting activities, we think the market may turn into consolidation phase. Technical readings are still negative; 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

Hextar Global Bhd is acquiring the entire issued share capital of TufBond Technologies Sdn Bhd, a synthetic latex polymers manufacturer for RM13.0m funded from internally generated funds and/or borrowings, as it continues to expand its specialty chemicals sector. The acquisition of TufBond comes with a profit after tax guarantee of RM2.0m per annum for three years for an aggregate profit guarantee of RM6.0m. (The Star)

Dialog Group Bhd’s engineering, procurement, construction and commissioning (EPCC) segment secured a contract valued at about RM248.0m from PRPC Utilities and Facilities Sdn Bhd. The contract entails the EPCC of Titanium Nitrile Butadiene Latex (NBL) Outside Battery Limit Facility Project for Pengerang Integrated Complex (PI) at Pengerang, Johor. The project will commence immediately and is expected to be completed by 2Q2023. (The Star)

Pentamaster Corporation Bhd’s sub-subsidiary Pentamaster Equipment Manufacturing Sdn Bhd has entered into an agreement to acquire 11.8-ac leasehold land in Batu Kawan Industrial Park from Penang Development Corp for RM28.3m. The proposed acquisition will increase the group’s engineering and manufacturing capacity, specifically to cater for its expansion into the factory automation solution and medical segment. (The Star)

Damansara Holdings Bhd’s ongoing unconditional mandatory take-over offer by Johor Corp’s (JCorp) subsidiary JLand Sdn Bhd has been extended from 8th Nov 2021 to 22nd Nov 2021 as JCorp’s current stake of 74.4% of the total issued shares of Damansara Holdings is insufficient for the state-controlled investment arm to withdraw the listing status of the company. (The Edge)

Frasers & Neave Holdings Bhd’s 4QFY21 net profit shrank by 31.6% YoY to RM58.7m due to surging commodity, freight and warehousing costs as well as restructuring and Covid-related expenses. Revenue for the quarter dropped 6.0% YoY to RM896.3m. A 33.0 sen dividend per share was declared. (The Edge)

Symphony Life Bhd is proposing a private placement to raise up to RM38.2m to fund its property development projects and working capital based on an illustrative issue price of 47.69 sen. RM13.0m is earmarked for property development projects, RM24.0m for working capital while the remaining RM1.2m is for the estimated expenses for the proposed private placement. (The Edge)

Sarawak Consolidated Industries Bhd has been given an ultimatum by regulator Bursa Malaysia to submit its annual report by 8th November 2021 or it will face suspension on 9th November 2021. (The Edge)

DRB-Hicom Bhd’s 50.1% subsidiary Proton Holdings Bhd has exceeded its year-todate (YTD) sales volume by selling 86,379 units for the first 10 months of 2021 compared to 84,999 units for the same period. The market share for Proton is estimated to be 20.5% for October while its YTD market share figure stood at 22.7%. (The Edge)

Ecomate Holdings Bhd’s 2QFY22 net loss stood at RM1.8m on top of revenue of RM6.5m, after incurring listing expenses of approximately RM0.7m. No comparison was made as this is the first interim financial report on the Company’s unaudited condensed consolidated financial results. (The Edge)

Benalec Holdings Bhd’s major shareholders, the Leaw brothers sold 148.5m shares or 17.2% stake via Oceancove Sdn Bhd for RM22.3m at 15.0 sen per share. Oceancove is owned by Benalec group managing director and chief executive officer, Datuk Leaw Seng Hai and Datuk Leaw Ah Chai. (The Edge)

Source: Mplus Research - 5 Nov 2021