Extended sideways

Market Review

Malaysia:. The FBM KLCI (-0.1%) retreated, dragged down by weakness in selected gloves and banking heavyweights yesterday. The lower liners extended their decline, while the broader market closed mostly negative with the healthcare sector (-1.2%) taking the worst hit.

Global markets:. The US stockmarkets ended mixed as the Dow (-0.2%) fell amid the on-going concern over inflationary pressure, but the S&P 500 (+0.4%) and Nasdaq (+0.5%) was driven by gains in technology shares. European stockmarkets were downbeat, while Asia stockmarkets ended mostly lower.

The Day Ahead

The FBM KLCI turned lower as glove counters gave up earlier gains following SUPERMX’s announcement on its financial result amid softer glove ASP. While bargain hunting may emerge on selected sectors, the increasing volatility across regional bourses, coupled with the concerns over upcoming corporate earnings may continue to dent investors’ sentiment. Also, Melaka state election may dampen the trading activities across the local bourse. Meanwhile, on the commodity markets, the CPO price rebounded near the RM5,000 mark, while the crude oil price hovered above the USD81 per barrel mark.

Sector focus:. Nasdaq’s rally to record closing highs overnight may spill over to the local technology counters; INARI is speculated to be included into FBMKLCI in the upcoming FTSE semi-annually review. Besides, investors may focus on sectors with high earnings visibility such as banking and plantation stocks amid the earning season; the latter may gain traction as CPO prices saw rebound signs.

FBMKLCI Technical Outlook

The FBM KLCI continued to trade in consolidation mode as the key index retreated after two-session gains. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI hovered below the 50 level. The support level is envisaged along 1,500-1,520, while the resistance is pegged at 1,540-1,550.

Company Brief

DRB-Hicom Bhd’s 3QFY21 net loss stood at RM179.4m vs. a net profit of RM47.5m recorded in the previous corresponding quarter, impacted by the lockdown that restricted business activities across the group. Revenue for the quarter declined 40.4% YoY to RM2.12bn. (The Star)

Duopharma Biotech Bhd’s 3QFY21 net profit rose 20.1% YoY to RM17.0m, mainly due to higher demand from consumer healthcare and the public health sector. Revenue for the quarter improved 28.5% YoY to RM171.8m. (The Star)

Sime Darby Plantation Bhd’s 3QFY21 net profit surged 234.2% YoY to RM635.0m, driven by stronger performance at the upstream segment. Revenue for the quarter rose 59.1% YoY to RM5.06bn. (The Edge)

MISC Bhd’s 3QFY21 net profit added 55.2% YoY to RM401.0m, on the back of higher revenue. Revenue for the quarter rose 30.6% YoY to RM2.69bn. A dividend of 7.0 sen per share, payable on 14th December 2021 was declared. (The Edge)

Pharmaniaga Bhd will be supplying Sinovac Covid-19 vaccine booster doses to designated private hospitals and clinics soon, following the conditional approval of the Drug Control Authority. The booster dose had been approved for individuals aged 18 years and above who had received the same type of vaccine (homologous) and will be administered three to six months after the second dose. (The Edge)

ELK-Desa Resources Bhd’s 2QFY22 net profit dropped 56.0% YoY to RM4.8m, on lower revenue due to business disruptions during the Full Movement Control Order caused by the pandemic. Revenue for the quarter fell 37.5% YoY to RM23.4m. An interim dividend of 2.0 sen per share, payable on 16th December 2021 was declared. (The Edge)

Kejuruteraan Asastera Bhd has secured three new solar projects for grid connected photovoltaic solar systems with an aggregate capacity of 4,537-kwp in Thailand through six power purchase agreements (PPAs) with Aapico Ayutthaya Group of Companies, Great Glove (Thailand) Co Ltd and Volcano Tec (Thailand) Co Ltd in Thailand with an estimated total value of RM55.7m. (The Edge)

NCT Alliance Bhd’s 3QFY21 net profit soared 553.7% YoY to RM8.0m, on the back of improved revenue. Revenue for the quarter rose 30.8% YoY to RM26.3m. (The Edge)

Sunway Construction Group Bhd's (SunCon) 3QFY21 net profit fell 19.7% YoY to RM19.3m, on the back of weaker results at both its construction and precast segments. Revenue for the quarter declined 35.1% YoY to RM272.1m. (The Edge)

Berjaya Sports Toto Bhd’s (BToto) 1QFY22 net loss stood at RM17.7m vs. a net profit of RM67.9m recorded in the previous corresponding quarter, amid cancellation of draws, closure of sales outlets and fixed operating expenses. Revenue for the quarter shrank 40.9% Yoy to RM797.6m. A first interim dividend of 1.0 sen per share, payable on 5th January 2021 was declared. (The Edge)

Mega First Corp Bhd's 3QFY21 net profit slipped 0.7% YoY to RM88.9m, on higher material, fuel and freight costs. Revenue for the quarter, however, grew 10.1% YoY to RM232.5m. (The Edge)

Datasonic Group Bhd's wholly-owned subsidiary, Datasonic Technologies Sdn Bhd has received a letter of extension for three contracts related to the supply of Malaysian passports from the Home Ministry. It comprises the supply of the Malaysian passport chips, Malaysian passport documents, and Polycarbonate Biodata Pages to the Immigration Department for a period of 24 months from 1st December 2021. (The Edge)

KNM Group Bhd has reported that it has missed principal and coupon payments on bonds issued in Thailand worth 2.78bn baht (RM352.6m) which matured on 18th November 2021. The group blamed this on the challenges arising from Covid-19 and the unfavourable operating conditions of its subsidiary Impress Ethanol Co Ltd (IECL) that operates an ethanol plant in Thailand. It has a grace period until 2nd December 2021 to pay the principal sum, and until 9th December 2021 to pay the coupon before an event of default occurs. (The Edge)

Formosa Prosonic Industries Bhd’s 3QFY21 net profit declined 3.4% YoY to RM25.0m, dragged by lower sales from reduced production volume amid the Movement Control Order. Revenue for the quarter fell 15.7% YoY to RM236.9m. (The Edge)

Source: Mplus Research - 19 Nov 2021