Dour undertone resumes

Market Review

Malaysia:. The FBM KLCI (-0.7%) trended lower after hovering largely in the negative territory throughout the session yesterday with more than two third of the key index components finished lower. The lower liners extended their losses with the exception of the energy sector (+0.1%).

Global markets:. The US stockmarkets retreated from their peak as Dow (-0.3%) slipped on concern over the inflationary pressure following the strong Producer Price Index data that rose 8.6% YoY in October 2021. European stockmarkets were downbeat, while Asian stockmarkets ended mixed.

The Day Ahead

The FBM KLCI skidded on the back of further selling pressure amid mixed regional market performances, despite the Malaysia’s Industrial Production Index (IPI) increased 2.5% YoY and improved employment readings. Meanwhile, the energy sector was the sole gainer on the broader market as crude oil price remained elevated, hovering above the USD84 per barrel at the time of writing. While investors may remain on tenterhooks ahead of Melaka State election, we believe the bashed-down counters could be sweet spot for bargain hunting activities especially counters with solid earnings prospects.

Sector focus:. Traders may focus on 5G related counters following the launch of the country’s first 5G network today while the government anticipating further expansion next year. Meanwhile, the oil and gas counters may gain traction in line with the advanced crude oil price.

FBMKLCI Technical Outlook

The FBM KLCI retreated after registering two-day winning streak amid lacklustre in trading activities. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI hovered below the 50 level. Investors could monitor for the support level located at 1,500-1,520, while the resistance is envisaged along 1,550-1,560.

Company Brief

Sunway Real Estate Investment Trust’s (Sunway REIT) 3QFY21 net property income improved 3.2% YoY toRM70.5m, on lower operating cost. Revenue for the quarter, however, slipped 0.5% YoY to RM106.9m. (The Star)

MLABS Systems Bhd’s external auditors, Messrs PKF has expressed qualified opinion in the company's audited financial statements for the financial year ended 30th June 2021. The qualified opinion was about Mlabs’ subsidiary which had invested in Coinful Capital Fund. The investment was accounted for as unquoted financial assets at fair value through profit and loss, with the carrying amount amounted to RM1.7m. (The Star)

Hibiscus Petroleum Bhd indirect wholly-owned subsidiary SEA Hibiscus Sdn Bhd has executed the amendment and restatement agreement with commodities trading company Trafigura Pte Ltd on the prepayment agreement of up to US$80.0m originally dated 8th October 2018. This agreement effectively extends the existing Trafigura prepayment facility to 31st December 2023. (The Edge)

Sime Darby Property Bhd (SimeProp)’s 136 units of Elmina Green Five (EG5) in the City of Elmina and 46 units of Trilia homes in Bukit Jelutong, Selangor are fully taken up during their respective early-bird previews in end-October 2021. Both products have a combined gross development value (GDV) of RM239.0m. (The Edge)

QL Resources Bhd’s convenience store subsidiary FamilyMart Malaysia's new factory with a total investment of about RM100.0m will be completed by 1Q22, which will enable the convenience store operator to supply more stocks to its retail stores. The new factory will be located near its current factory in Shah Alam, Selangor, after unveiling its new Food Superstore concept at the fifth anniversary of FamilyMart Malaysia. (The Edge)

Land & General Bhd’s (L&G's) 9.1% equity interest investment in Vietnam Industrial Investments Ltd (VII) was removed from the Australian Securities Exchange's (ASX) Official List on 29th October 2021, pursuant to ASX's Listing Rules 17.12. The company's original cost of investment in VII was RM11.9m as at 31st March 2021. (The Edge)

RCE Capital Bhd's 2QFY22 net profit fell 10.9% YoY to RM31.6m, due to lower refinancing activities by customers amid the implementation of the Full Movement Control Order that restricted business activities nationwide from 1st June 2021. Revenue for the quarter slipped 8.0% YoY to RM69.8m. A first interim dividend of 7.0 sen per share, payable on 6th December 2021 was declared. It also wants to further reward shareholders with the distribution of 1 treasury shares for every 20 existing shares held together with 19 bonus shares for every 20 existing shares held. (The Edge)

Nestcon Bhd wholly-owned subsidiary Nestcon Sustainable Solutions Sdn Bhd (NSS) has inked an agreement with Hatten Land’s unit Hatten Renewable Energy Sdn Bhd (HRE) to form a (70:30) joint venture company (JVCo) to secure, supply, construct, develop and manage solar photovoltaic plants and facilities. The JVCo will undertake the development of a 3.2MW rooftop solar photovoltaic system project, which consists of 6,373 solar panels and associated system on the roof of Dataran Pahlawan Melaka Megamall in Melaka. (The Edge)

TAFI Industries Bhd shares hit limit up in the afternoon trading session yesterday to close at a record high of RM3.54, after rising 81 sen or 29.7% in active trade. Shares in the office furniture manufacturer have risen from around 60 sen in the last six months, amid the emergence of a new controlling shareholder. (The Edge)

Aneka Jaringan Holdings Bhd’s Indonesia subsidiary PT Aneka Jaringan Indonesia has accepted a contracting job in Indonesia on 8th November 2021. The price of the contract is IDR48.75bn inclusive of value-added tax, which is equivalent to approximately RM14.2m. The contract is expected to commence on 11th November 2021 and shall be completed by 10th March 2022. (The Edge)

Damansara Holdings Bhd has announced a slew of boardroom changes, after Johor Corp Bhd re-emerged as its largest shareholder. Datuk Nor Azri Zulfakar is appointed as its new chairman effective 9th November 2021, while its newly appointed group chief executive officer Muazzam Mahmud has been redesignated as group managing director. At the same time, its independent director Datuk Mohd Aisom Omar has also resigned, citing other work commitments. (The Edge)

Genting Malaysia Bhd (GenM)’s 49.0%-owned subsidiary Empire Resorts Inc has won a license to offer mobile sports betting in New York on 8th November 2021. (The Edge)

Source: Mplus Research - 10 Nov 2021