Further pullback

Market Review

Malaysia:. The FBM KLCI (-0.3%) extended its losses dragged down by weakness in selected banking heavyweights yesterday. Both the lower liners and broader market closed mixed, but the technology sector (+1.0%) was leading the pack after recovering part of its previous session losses.

Global markets:. Wall Street staged a strong rebound as the Dow (+1.3%) rallied, driven by the ISM Services PMI data that rose to 3-month high at 56.7 in July 2022 and solid corporate earnings from Paypal and Moderna. The European stock markets also turned upbeat, while the Asia stock markets finished mostly higher.

The Day Ahead

The FBM KLCI took another dive amid continuous profit-taking activities as investors digested the strong gains in the previous four sessions. Given the market treated Nancy Pelosi’s visit to Taiwan as non-event, we believe the sentiment will recover along with the regional peers following the sharp gains in the US triggered by robust economic data and stronger corporate earnings. Commodities wise, the crude oil price continued to fall, trading below the USD100 per barrel, while the CPO price dropped and traded around RM3,800.

Sector focus:. The technology sector may rebound higher taking the positive cue from the strong gains in the Nasdaq overnight. However, the energy sector should take a breather amid the declining crude oil price which is traded below USD100 per barrel mark. Meanwhile, the uplift of workers bans entering Malaysia from Indonesia could boost the sentiment on the plantation and construction sectors.

FBMKLCI Technical Outlook

The FBM KLCI extended losses for the second session as the key index pulled back further from the 1,500 psychological level. Technical indicators, however, remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above 50. Resistance is pegged along 1,500-1,530, while the support is set at 1,450-1,460

Company Brief

Fraser and Neave Holdings Bhd's (F&N) 3QFY22 net profit gained 1.4% YoY RM97.5m, as improved sales in Malaysia and price adjustments helped to mitigate pressures from Thailand operation and export markets. Revenue for the quarter rose 5.5% YoY to RM1.12bn. (The Star)

IJM Corp Bhd has entered into a strategic partnership with China Harbour Engineering Company Ltd (CHEC) for the development of Malaysia-China Kuantan International Logistics Park (MCKILP) in Kuantan. This marks IJM’s first foray into the industrial and logistics market to meet the growing logistics demands in the east coast region. The agreement for a new joint-venture company was signed between CHEC and Asas Panorama Sdn Bhd, IJM’s indirect subsidiary that is owned 60:40 by IJM Land Bhd and Guangxi Beibu Gulf International Port Group Co Ltd (Guangxi Beibu). (The Star)

ILB Group Bhd is seeking legal advice after a minority shareholder BT Investment Capital Ltd filed a lawsuit against ILB board members, in an attempt to block an acquisition that could dilute shares owned by existing shareholders. (The Edge)

Green Packet Bhd and Privasia Technology Bhd have denied a local news report that the companies are attempting to obtain the Health Ministry's approval for a digital tracking system in relation to the proposed Control of Tobacco Product and Smoking Bill 2022. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has inked a Memorandum of Understanding with PT Semesta Noor Berkarya and PT Envy Manajemen Konsultansi to explore the formation of a partnership in relation to the construction of 4G telecommunications towers for Indonesia’s outermost regions. (The Edge)

Businessman Datuk Seri Tee Yam @ Koo Tee Yam continued to expand his shareholdings in Caely Holdings Bhd, buying 5.5m shares off market. This raised his total shareholdings to 39.4m shares or 15.3%. The group’s former executive chairman Datuk Wira Ng Chun Hau, meanwhile, disposed of the same number of shares on the same day via off-market transaction. (The Edge)

Malaysian Genomics Resource Centre Bhd (MGRC) has announced that it is not aware of any corporate development that would have caused the sharp fall in its share price in a reply to the unusual market activity (UMA) query on 2nd August 2022. (The Edge)

TDM Bhd, a subsidiary of the Terengganu State government, has announced the appointment of Tengku Seri Bijaya Raja Datuk Tengku Farok Hussin Tengku Abdul Jalil as its non-independent non-executive chairman. (The Edge)

Globaltec Formation Bhd’s 52.0%-owned Australia-listed subsidiary NuEnergy Gas Ltd has obtained approval from the Indonesian Ministry of Energy and Mineral Resources for additional exploration time at the Muralim gas field until 18th July 2023. (The Edge)

Joe Holding Bhd has proposed the acquisition of 2 pieces of machinery from Fintec Global Bhd’s wholly-owned subsidiary Fintec Glove Sdn Bhd for a total contract price of RM14.5m. (The Edge)

Source: Mplus Research - 4 Aug 2022