All eyes on Bank Negara

Market Review

Malaysia:. The FBM KLCI (+0.2%) halted a four-day losing streak, driven by gains in Petronas-related heavyweights yesterday. Both the lower liners and the broader market, however, ended mixed with the energy sector (-1.7%) underperformed following the weaker crude oil prices movements.

Global markets:. Wall Street staged a sharp rally as the Dow (+1.4%) advanced after the slump in crude oil prices eased some worries over the persistent high inflation. The European stock markets ended mostly higher after recovering from their intraday lows, but Asia stock markets closed mostly negative.

The Day Ahead

The FBM KLCI rebounded from a four-day slide, outperforming most of the regional markets as the industrial products & services and utilities heavyweights led gains. We believe the overall sentiment will turn more positive with the rebound on Wall Street overnight. Meanwhile, Malaysia BNM’s and European Central Bank’s interest rate decision will be in focus today, we believe the market is pricing in a 25-basis point Overnight Policy Rate (OPR) hike at this juncture. Commodities wise, the crude oil price declined, trading around USD88 as market expected a slower demand from China. Meanwhile, the CPO traded above RM3,700.

Sector focus:. The technology sector may see further bargain hunting activities following a rally in Wall Street Nasdaq overnight. Meanwhile, the banking sector could benefit from the interest rate hike environment. On the contrary, the falling crude oil price following a downbeat Chinese trade data may drag the energy counters at least for the near term.

FBMKLCI Technical Outlook

The FBM KLCI pared earlier losses and closed in the positive territory but the key index continued to stay below its EMA60 level. Technical indicators are still mixed as the MACD Histogram extended a negative bar, while the RSI crossed above 50. Resistance is at 1,510-1,530, while the support is located at 1,465-1,480.

Company Brief

Tafi Industries Bhd’s wholly-owned units, TAFI Home and Office Sdn Bhd, has bagged a turnkey construction contract worth RM115.0m from Magna Park Sdn Bhd for the overall development and construction of service apartments Metro Kepong Phase 2D in Kepong Baru, Kuala Lumpur. The contract period as set out in the letter of award shall be 48 months upon obtaining the approval of building plan from authorities or 30 months upon obtaining the advertising permit by the developer or a date to be advised by the employer (Magna Park), whichever is later. (The Star)

Tenaga Nasional Bhd (TNB) has obtained a 5-year extension of power purchase agreement (PPA) for Sungai Perak hydroelectric power stations from the Energy Commission (EC) TNB Power Generation Sdn Bhd had received a letter from the EC that the existing PPA of Sungai Perak Hydroelectric Power Plants which comprise of six stations with a total capacity of 649.1MW has been extended till 24th August 2027. (The Star)

Kejuruteraan Asastera Bhd has proposed to diversify into the sustainable energy solutions segment and is planning to raise RM119.0m from a private placement partly to fund the diversification. The move is part of the group’s strategy to diversify its business and create an additional source of income on top of the existing contribution from its core mechanical and electrical engineering business. (The Edge)

T7 Global Bhd’s unit Tanjung Offshore Services Sdn Bhd has received a Letter of Award from Petronas Carigali Sdn Bhd to provide platform-based underwater inspection services by utilising mini remotely operated vehicles for over 30 offshore structures such as jackets and pipelines in Malaysia. (The Edge)

Haily Group Bhd’s wholly owned subsidiary Haily Construction Sdn Bhd has won a second contract worth RM17.5m from Mah Sing Group Bhd’s unit Meridin East Sdn Bhd to build 108 double-storey terrace homes in the latter’s largest integrated township in the Eastern Gateway of Iskandar Malaysia, Johor. (The Edge)

Following the outcome of Jade Marvel Group Bhd’s 20th annual general meeting and extraordinary general meeting (EGM), the group has announced the retirement of its deputy chairman Chong Wei Liang, as well as its joint managing director Datuk Khoo Yik Chou. It also announced the appointment of Seah Yee Teng as an independent and non-executive director, as well as Datuk Seri Chong Wei Chuan as an executive director. One of the resolutions at Jade Marvel’s EGM, which sought to diversify the group’s existing business to include mining, sale and trading of iron ore, dolomite, sand and other minerals, garnered 42.0% or 38.8m shares for it, while 58.0% voted or 53.6m shares voted against it. (The Edge)

Iskandar Waterfront City Bhd has appointed Messrs Crowe Malaysia PLT as its new external auditor, after its previous external auditor Messrs Ernst & Young PLT resigned on 6th September 2022. (The Edge)

Trive Property Group Bhd announced that it has cut off talks with Syarikat Perumahan Negara Bhd (SPNB) in relation to being a turnkey contractor for an affordable housing project amounting to RM1.10bn in gross development value. (The Edge)

Source: Mplus Research - 8 Sept 2022