Still below 1,500

Market Review

Malaysia:. The FBM KLCI (-0.1%) ended marginally lower, dragged by selected banking and Petronas-related heavyweights yesterday. The lower liners also retreated, while the broader market ended mixed with the energy sector (-2.0%) underperformed after crude oil prices extended their slide.

Global markets:. Wall Street turned lower as the Dow (-1.1%) reversed all its intraday gains after the strong labour force participation rate data may fuel the US Federal Reserve stance towards a more hawkish undertone. The European stock markets, however, rebounded, while Asia stock markets ended mostly weaker.

The Day Ahead

The FBM KLCI ended marginally lower on Friday amid mixed regional markets. The local bourse could remain wobbly over the near term as market selloff intensified on Wall Street, while the crude oil price remained under pressure. Meanwhile, investors may keep an eye on the European Central Bank’s and BNM’s interest rate decisions which will be releasing this week. Commodities wise, both the crude oil and crude palm oil were traded below the USD100 and RM4,000 levels, respectively.

Sector focus:. The technology sector might see further selling pressure amid persistent downtrend move on Wall Street Nasdaq. Meanwhile, the energy sector may swing lower given the crude oil price remained below USD100. Overall, investors may turn their focus to banking sector ahead of the BNM’s interest rate decision, as well as consumer sector, utilities, telco and REIT which can provide stability in current market rout.

FBMKLCI Technical Outlook

The FBM KLCI remained below its daily EMA60 level last week. Technical indicators turned mixed as the MACD Histogram extended a positive bar, while the RSI hovered below 50. The resistance is pegged along 1,530-1,550, while the support is located at 1,450-1,465

Company Brief

Scientex Bhd is partnering with Japan's leading producer of liquid and paste packaging systems, Taisei Lamick Co, Ltd (TLM) to expand its market share in the region. Its wholly owned subsidiary Scientex Packaging Film Sdn Bhd had entered into a share sale agreement (SSA) with TLM to acquire 8,100 ordinary shares representing 80.2% equity interest for RM63.8m cash consideration. The proposed acquisition is to be funded by internally-generated funds and/or bank borrowings and is not subject to the approval of Scientex shareholders and government authorities in Malaysia. The proposed acquisition is expected to be completed 2H22. (The Star)

Pasukhas Group Bhd’s wholly owned subsidiary, Pasukhas Sdn Bhd has secured a contract worth RM11.9m from Exyte Malaysia Sdn Bhd. The contract is for the supply, execution and completion of a data centre at Cyberjaya, Selangor for package C07-1 substructure and architecture. (The Star)

Boustead Heavy Industries Bhd (BHIC), which is embroiled in the RM9.00bn littoral combat ship (LCS) project fiasco, announced that the letter of awards to 2 main contractors in relation to the 6 vessels for the Royal Malaysian Navy (LCS Programme) have been voided. The 2 contractors, Contraves Advanced Devices Sdn Bhd (CAD) and Contraves Electrodynamics Sdn Bhd (CED) received a notice dated 23rd August 2022, stating that the letters issued by its unit Boustead Naval Shipyard Sdn Bhd (BNS) to these companies under the programme were void. (The Edge)

Wah Seong Corp Bhd's attempt to dispose of idle Singapore real estate for S$13.0m (RM40.1m) lapsed as the buyer, Swee Joo (Pte) Ltd, wholly owned by Singaport Cleanseas Pte Ltd was not able to get approval from the relevant authorities in the island nation. The real estate consists of 13,734 sqm leasehold land with industrial workshop, warehouse and office built on it. (The Edge)

Perak Corp Bhd has been granted a further extension of time up to 10th February 2023 to submit its regularisation plan to the regulatory authorities. Previously, the Practice Note 17 (PN17) company was granted an extension of time to submit the regularisation plan to 10th August 2022. (The Edge)

MCA, a component party of Barisan Nasional, has emerged as a substantial shareholder of car leather upholstery maker Pecca Group Bhd with a 5.7% stake. The party, through Huaren Holdings Sdn Bhd, bought 3.7m shares on 30th August 2022 and 4.4m shares on 1st September 2022, raising its total interest to 42.7m shares. (The Edge)

Al-'Aqar Healthcare REIT has acquired 3 hospitals from KPJ Healthcare Bhd for RM192.0m, to be paid in cash and new shares. The acquisition is deemed to be a related-party transaction, as both entities have a common major shareholder in Johor Corp. Al-'Aqar Healthcare REIT is buying TMC Healthcare Centre Building in Taiping, Perak for RM14.3m in cash, and KPJ Seremban Specialist Hospital Building for RM84.7m in cash. It is also buying Pasir Gudang Specialist Hospital in Johor for RM93.0m, to be satisfied by a combination of a cash payment of RM68.0m and the issuance of 20.5m new units in the REIT at RM1.22 per unit. The REIT also announced that it plans to raise RM138.0m via a private placement of up to 119.0m new units or 16.2% of its total issued units, mainly for repayment of bank financing. (The Edge)

Source: Mplus Research - 5 Sept 2022