Sentiment still wobbly

Market Review

Malaysia:. The FBM KLCI (+0.04%) traded in a choppy session before raking in marginal gains, lifted by the better performances in selected telco heavyweights yesterday. The lower liners extended their decline, while broader market ended mostly lower with the construction sector (-1.2%) taking the worst hit.

Global markets:. The US stockmarkets rebounded as the Dow rose 0.2%, lifted by the strong retail sales data that rose 16.3% YoY in October 2021; exceeding economists’ expectations of 12.0% YoY improvement. European stockmarkets closed mixed, while Asia stockmarkets finished mostly upbeat.

The Day Ahead

The FBM KLCI ended marginally higher after erasing most of its gains in the final trading hour, underpinned by renewed buying interest in the index-linked telecommunication stocks offsetting selling pressure in gloves. Tracking the slightly bullish tone on Wall Street overnight, we expect buying support to spillover to stocks on the local bourse, especially in the technology stocks as Nasdaq closed near the all-time-high region. Commodities wise, the CPO price is hovering around RM4,800 level, while the crude oil price continued to trade above the USD82 per barrel mark. The crude oil price is likely to trade in consolidation mode as OPEC chief has been noticing the signs of oil surplus in the near term.

Sector focus:. As we are entering the reporting season, we believe market players will focus on solid fundamental companies such as plantation and blue chips for now. Meanwhile, the technology sector may be focused as Nasdaq is traded on a bullish tone overnight.

FBMKLCI Technical Outlook

The FBM KLCI booked marginal gains as the key index closed above its immediate support level at 1,520. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI is still hovering below 50. The key index may continue to trade in rangebound mode between the support level at 1,520 and the resistance along 1,540-1,550 without any fresh catalyst.

Company Brief

Pacific & Orient Bhd and its subsidiary, Pacific & Orient Insurance Co. disposed of 23.3m Ancom Bhd shares for RM57.6m. The shares were disposed via open market and direct business transactions from 27th October 2021 to 10th November 2021. The balance of the Ancom Shares held after the disposal is 23.4m shares. (The Star)

BSL Corporation Bhd’s unit Ban Seng Lee Industries Sdn Bhd has secured a USD3.5m (RM14.6m) contract from SDU Pte Ltd to fabricate and supply semiconductor components, sub-assembly modules. The contract involved manufacturing and suppling of integrated console, sheet metal fabrication including precision machining. (The Star)

GHL Systems Bhd is collaborating with Lotuss Stores Malaysia Sdn Bhd (Lotuss Malaysia), formerly known as Tesco Malaysia, to boost the retailer's Order & Collect personal shopper service with a wider range of payment options, powering its online payments via the WhatsApp messaging platform. (The Edge)

NTPM Holdings Bhd, Tan Chong Motor Holdings Bhd and Tasco Bhd are potential inclusions in the Securities Commission Malaysia's (SC) Islamic or Shariah compliant securities list as these companies' cash-to-total assets ratio and debt-to total assets ratio have fallen below the 33.0% permissible threshold criteria. Yinson Holdings Bhd and Rubberex Corp (M) Bhd, however, are at risk of dropping out from the SC's list for failing to completely meet the 33.0% threshold criteria for both the cash-to-total assets ratio and debt-to-total assets ratio. (The Edge)

CJ Century Logistics Holdings Bhd has signed a warehousing, fulfilment and logistics services agreement with Astro Malaysia Holdings Bhd's unit MEASAT Broadcast Network Systems Sdn Bhd. The partnership will commence on 1st December 2021 for an initial period of 3 years with an option to extend for 2 more years upon conclusion of the initial term. (The Edge)

Pos Malaysia Bhd's 3QFY21 net loss widened to RM43.9m, from a net loss of RM7.4m recorded in the previous corresponding quarter, amid lower revenue and higher finance costs. Revenue for the quarter fell 13.9% YoY to RM536.3m. (The Edge)

Tenaga Nasional Bhd (TNB) and Malakoff Corp Bhd has announced that their 60:40 joint venture company, Kapar Energy Ventures Sdn Bhd (KEV) has filed an application for judicial review to challenge the notices of assessment from the Inland Revenue Board amounting to RM596.0m. (The Edge)

Perak Transit Bhd’s 3QFY21 net profit increased 14.2% YoY to RM13.7m, mainly due to a higher contribution from the integrated public transportation terminal operations. Revenue in the quarter climbed marginally by 0.6% YoY to RM35.2m. A fourth interim dividend of 0.825 sen per share, payable on 15th February 2022 was declared. (The Edge)

Perusahaan Otomobil Kedua Sdn Bhd, in which UMW Holdings Bhd holds a 38.0% stake and MBM Resources Bhd has 20.0% equity interest has reported that it is unlikely to meet its sales target for 2021 due to a chip shortage despite selling 146,951 vehicles in 10MFY21 vs. 171,861 units in the same period last year. (The Edge)

JF Technology Bhd's (JF Tech) 1QFY22 net profit increased 25.7% YoY to RM5.0m, on the sustained strong demand from its customers stemming from the Covid-19 pandemic. Revenue for the quarter added 23.8% YoY to RM9.1m. (The Edge)

Dialog Group Bhd's 1QFY22 net profit fell 12.1% YoY to RM128.8m, mainly due to higher project costs. Revenue for the quarter, however, rose 52.4% YoY to RM505.5m. (The Edge)

Source: Mplus Research - 17 Nov 2021