Market Review

Malaysia:. The FBM KLCI (-0.6%) pared some of its previous session gains amid concerns over the geopolitical developments in Taiwan. However, the key index marked its third winning weekly streak (+0.6% WoW). Meanwhile, the broader market ended mostly lower with the energy sector (-1.2%) underperformed.

Global markets:. Wall Street closed mixed as the Dow (+0.2%) rose, but the S&P 500 (-0.2%) and Nasdaq (-0.5%) fell after the stronger-than-expected jobs data reaffirms the US Federal Reserve hawkish tone on interest rate hike. The European stock markets turned lower, while the Asia stock markets closed mostly positive. The Day Ahead The FBM KLCI retreated mildly on the back of elevated tension between China and Taiwan. Also, with the market expecting a more hawkish tone from the FOMC meeting going forward after the better-than-expected jobs data on Friday, we expect the near-term volatility to persist. However, we believe the downside risk might be limited if the economy is on the recovery tone; short term upward move could be seen. Similarly, on the local front, we are heading into the August reporting month, investors may position themselves ahead of the period within sectors with higher earnings certainty. Commodity wise, the Brent oil is trading around USD94, while the CPO price is hovering around RM3,800-3,900.

Sector focus:. We believe the technology stock may see some selling pressure, but they should be supported ahead of the earning season. Meanwhile, we expect sustainable move within the plantation stock as FCPO stabilises near RM3,800. Also, investors may look at the REIT sector on the back of its defensive nature.

FBMKLCI Technical Outlook

Although the FBM KLCI fell on Friday, it is still hovering above 1,500. Technical indicators remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above 50. Investors should watch the next resistance along 1,530- 1,550 and support is set at 1,460-1,480.

Company Brief

IOI Corp Bhd has completed the sale of 1,800 shares, representing its 10.0% shareholdings in Bunge Loders Croklaan Group B.V. (BLC) to Koninklijke Bunge B.V. (KBBV), for a total of US$84.4m plus €19.7m. With the completion of the share sale, the company’s equity interest in BLC has reduced to 20.0%. The company further said that the estimated loss arising from the share sale is about RM50.0m, which mostly relates to fair value loss from the derecognition of the terminated Put and Call Options. (The Star) Leong Hup International Bhd and PPB Group Bhd has reported that the Malaysia Competition Commission's allegations that their subsidiaries were involved in price-fixing practices involving poultry feed are without merit, and they will respond to the MyCC within the stipulated time to defend their subsidiaries against these allegations. The groups said this following a proposed decision issued by MyCC against five feedmillers, including Leong Hup's wholly-owned Leong Hup Feedmill Malaysia Sdn Bhd (LFM), PPB's 80.0%-owned FFM Bhd and Malaysan Flour Mills Bhd's Dindings Poultry Development Centre Sdn Bhd. (The Edge)

Datuk Seri Koe Peng Kang will be stepping down from his post as S P Setia Bhd’s deputy president and chief operating officer to pursue interests outside the organisation. His last day with the property developer will be 30th September 2022. (The Edge) SLP Resources Bhd’s 2QFY22 net profit jumped 89.3% YoY to RM8.9m, largely boosted by a gain from the disposal of leasehold land at RM5.1m. Revenue for the quarter increased 13.3% YoY to RM47.1m. (The Edge) Hong Seng Consolidated Bhd has sold a 20.0% stake in digital healthcare platform operator eMedAsia Sdn Bhd to Green Packet Bhd for RM20.0m. This reduces Hong Seng’s stake in eMedAsia that is held through wholly-owned subsidiary HS Bio Sdn Bhd to 60.0%. (The Edge)

Singapore-based Jardine Cycle & Carriage Ltd (Jardine CCL) has raised its stake in Cycle & Carriage Bintang Bhd (CCB) to 91.0% under its third attempt to take over the auto distributor. Jardine CCL will procure CCB to take the requisite steps to withdraw its listing status from Bursa Malaysia. (The Edge) D’nonce Technology Bhd’s unit is acquiring 32,375-sqm of vacant industrial land in Kulai, Johor for RM12.2m to build a new factory. The group 82.0%-owned Attractive Venture (JB) Sdn Bhd is buying the land from ACL Group Sdn Bhd, which is 60.0% owned by Tang Mei Yean and 40.0% by Chia Swee Beng. (The Edge) ILB Group Bhd has reported that the lawsuit filed against the logistics services group to block its proposed acquisition of a commercial property in Petaling Jaya is not expected to have any material financial or operational impact on the group. The suit was filed by BT Investment Capital Bhd, which is a minority shareholder of ILB, on the grounds that the acquisition for RM15.9m via the issuance of new shares in ILB will dilute the shares of existing shareholders of the group. (The Edge)

Businessman Datuk Seri Tee Yam @ Koo Tee Yam has increased his shareholding in Caely Holdings Bhd to 19.1%, up from 15.25%, closing the gap with the group’s largest shareholder Datuk Seri Goh Choon Kim, who holds a 21.1% stake. Koo bought 10.0m shares on 3rd August 2022 in an off-market transaction. (The Edge)

Source: Mplus Research - 8 Aug 2022