Stabilising above support

Market Review

Malaysia: The FBM KLCI (+0.1%) rebounded, boosted by gains in telco and banking heavyweights as the key index recorded its fifth straight week of decline; falling 0.4% WoW. Both the lower liners and the broader market ended mixed with the energy sector (+1.1%) outperformed in the latter.

Global markets: The US stockmarkets endured another volatile session as the Dow (-0.8%) slipped on hawkish remarks from US Federal Reserves over concern over another Covid-19 wave in Europe may stall economic recovery progress. European stockmarkets extended their losses, while Asia stockmarkets finished mixed.

The Day Ahead

The FBM KLCI saw marginal gains on Friday as persistent selling pressure in glove counters offsetting the gains in telecommunication heavyweights. Given the Melaka state election has concluded, we believe the buying interest may resume on the local bourse. However, the upside might be limited given the concerns over the resurgence of Covid-19 cases European countries, which may potentially dampen the economic recovery going forward. Meanwhile, the decline in crude oil price below USD80 per barrel could trigger some selling pressure in the energy sector. The CPO is hovering around the RM5,000 zone.

Sector focus: Given the Nasdaq closing above the 16,000 level, market may see continued buying interest in the local technology stocks, tracking Nasdaq’s overnight rally. Investors reduce exposure on O&G stocks on the back of falling crude oil price, while traders might be keen to position themselves ahead of the reporting season, where plantation stocks might still provide strong earnings momentum amid the firm CPO price.

FBMKLCI Technical Outlook

The FBM KLCI staged a mild rebound but still hovering below the daily EMA9 level amid lacklustre trading. Technical indicators remained negative as the MACD Histogram has extended a negative bar, while the RSI is below 50. The support level remained at 1,510, while the next resistance is pegged along 1,540-1,550.

Company Brief

Affin Bank Bhd's 3QFY21 net profit jumped 173.5% YoY to RM133.2m, on higher net interest income, net fee and commission income and income from the Islamic banking business. Revenue for the quarter, however, eased marginally by 0.8% YoY to RM552.5m. (The Star)

Gas Malaysia Bhd’s 3QFY21 net profit improved 22.5% YoY to RM62.4m, on higher gross profit, lower administrative expenses and lower finance costs. Revenue for the quarter, however, fell 19.7% YoY to RM1.38bn. (The Star)

Khee San Bhd has triggered the criteria pursuant to Paragraph 2.1(b) of Practice Note No 17 (PN17) of the Main Market Listing Requirements of Bursa Securities. Bursa Malaysia Securities would continue to monitor Khee San’s progress in respect of its compliance with the listing requirements. (The Star)

Pharmaniaga Bhd's 3QFY21 net profit skyrocketed 34.6x YoY to RM49.8m, driven by growth across its concession, non-concession and Indonesian businesses. Revenue for the quarter surged 239.3% YoY to RM2.12bn. A third interim dividend of 2.0 sen per share, payable on 29th December 2021 was declared. (The Edge)

Bumi Armada Bhd's 3QFY21 net profit rose 79.2% YoY to RM153.4m, mainly due to higher operating income. Revenue for the quarter, however, fell 3.3% YoY to RM545.7m. (The Edge)

Oversea Enterprise Bhd has reported that Lim Kon Lian, LKL International Bhd's co-founder and managing director, has emerged as a substantial shareholder of the restaurant operator on 19th November 2021 after he subscribed to 261.9m shares representing a 23.1% stake in the company via a private placement. (The Edge)

IJM Plantations Bhd’s 2QFY22 net profit stood at RM101.0m vs. a net loss of RM1.0m recorded in the previous corresponding quarter, thanks to higher commodity prices coupled with the increase in fresh fruit bunch (FFB) production. Revenue for the quarter climbed 41.8% YoY to RM299.8m. (The Edge)

Reservoir Link Energy Bhd's 3QFY21 net profit ballooned 9.3x YoY to RM5.8m, mainly due to recognition of mobilisation fees for the Mauritania project and contribution from its solar renewable energy division. Revenue for the quarter rose 46.6% YoY to RM38.2m. (The Edge)

Sarawak Plantation Bhd's 3QFY21 net profit jumped 116.0% YoY to RM42.2m, in line with the increase in operating profit coupled with gain arising from changes in fair value of biological assets of RM12.8m. Revenue for the quarter rose 52.2% YoY to RM208.8m. (The Edge)

Muda Holdings Bhd's 3QFY21 net profit plummeted 93.6% YoY to RM1.6m, on higher production cost, lower output, deficit in revaluation of properties, higher operating expenses, and reduction of wage subsidies. Revenue for the quarter, however, gained 3.5% YoY to RM366.2m. (The Edge)

Source: Mplus Research - 22 Nov 2021