FBMKLCI drifting below 1,500

Market Review

Malaysia:. The FBM KLCI (-1.1%) endured another volatile session yesterday as the key index slipped below the 1,500 level, taking cue from the weakness on Wall Street overnight. The lower liners were also languished in the red, while the plantation sector (+0.1%) was the sole outperformer on the broader market.

Global markets:. US stockmarkets erased all their intraday gains as the Dow (-1.3%) extended its losses, dragged down by the first case of the Omicron Covid-19 variant identified in the US. European stockmarkets rebounded, while Asia stockmarkets finished mostly higher.

The Day Ahead

The FBM KLCI tumbled below the psychological 1,500 level as market reacted to Covid-19 Omicron variant developments, as well as the overnight selldown on Wall Street following more hawkish comments from Jerome Powell. We believe volatility may remain on the local bourse, taking into account government’s decision to bar travellers from eight countries with confirmed cases of Covid-19 Omicron variant and tracking the negative performance from Wall Street. Nevertheless, downside may be cushioned by the improved Malaysia’s November Purchasing Manager Index (PMI), which signalled improved operating condition. Commodities wise, the crude oil price remains soft, but the CPO price staged a mild rebound.

Sector focus:. Investors may take further step back from recovery theme sector on the back of increasing concerns over Omicron variant, which may potentially delay the economic recovery progress. Besides, buying interest might be seen in the healthcare sector following recent selldown.

FBMKLCI Technical Outlook

The FBM KLCI reversed Monday’s rebound to close below the significant 1,500 support level. Technical indicators remained negative with the MACD Histogram extending a negative bar, while the RSI hovered below 50. The next support level is located at 1,480, while the resistance is pegged along 1,515-1,530.

Company Brief

Awanbiru Technology Bhd's wholly owned subsidiary has entered into a RM75.9m contract with Pernec Integrated Network Systems Sdn Bhd for the supply of Google workspace solution and support services for a unified communication and collaborative service managed by Pernec. The deal with Pernec will commence from 25th November 2021 to 13th February 2024. (The Star)

George Kent (Malaysia) Bhd has signed a memorandum of understanding with the Malaysia Digital Economy Corporation (MDEC) to promote the growth of the tech ecosystem. Both parties will jointly promote initiatives that will benefit and drive growth of the tech ecosystem in the country. (The Star)

Pharmaniaga Bhd will embark on setting up a halal insulin manufacturing plant at its high-technology plant in Pharmaniaga Lifesciences Puchong. The company had earmarked a capital expenditure of RM107.0m for FY21 for its manufacturing division, specifically its halal vaccine and insulin plant, while a further RM295.0m is earmarked in FY22 for its logistics and distribution division. (The Edge)

Bintai Kinden Corp Bhd has inked a MoU with Charter Built Sdn Bhd to jointly develop a piece of industrial land near KLIA. The industrial land measuring 36.0-ha has a potential gross development value of not less than RM700.0m. (The Edge)

TCS Group Holdings Bhd has won a RM126.0m contract from Saujana Permai Development Sdn Bhd to build a condominium project in Bandar Saujana Putra. The project known as Arcadia comprises two 21-storey blocks, with 315 units each, together with retail lots. (The Edge)

KNM Group Bhd, which is in the midst of negotiating for new financing to repay its 2.78bn baht (RM352.6m) bonds after missing payments last month, announced the appointment of three non-independent non-executive directors. They are James Beltran, who is linked to the Melewar group, Singaporean businessman Datuk Indera Naresh Mohan, and Ravindrasingham Balasingham. (The Edge)

Telekom Malaysia Bhd has appointed the Employees Provident Fund's chief digital technology officer Muhammad Afhzal Abdul Rahman as its non-independent and non-executive director. (The Edge)

Tan Chong Motor Holdings Bhd has terminated its commercial papers and medium term notes (MTN) programmes worth a combined nominal value of RM1.50bn. This came after the full redemption of the notes which were outstanding under the MTN programme with a nominal value of RM500.0m. on 24th November 2021. (The Edge)

Samaiden Group Bhd has inked a 20-year solar power purchase agreement with Perbadanan Pengurusan Sunway Nexis, under which the latter will purchase electricity generated from a rooftop solar photovoltaic (PV) power system that will be developed by Samaiden. The rooftop solar PV power system will be a 531-kwp grid-connected system that will be built at Sunway Nexis' premises in Kota Damansara. (The Edge)

RGT Bhd is buying a 70.0% stake in Keenness Precision Engineering Sdn Bhd (KPESB) for RM9.8m. RGT is buying the stake from KPESB’s directors Ooi Swang Kieat and Tan Eng Thuan. (The Edge)

Source: Mplus Research - 2 Dec 2021