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Mplus Market Pulse - 12 Sept 2022

Publish date: Mon, 12 Sep 2022, 08:58 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

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Marching up

Market Review

Malaysia:. The FBM KLCI (+0.1%) edged mildly higher, supported by gains in selected banking heavyweights on last Friday. The lower liners also advanced amid the positive market sentiment, while the broader market closed mostly upbeat, led by the technology sector (+0.8%).

Global markets:. Wall Street remained upbeat as the Dow (+1.2%) rallied as investors perceived that the economy is strong enough to withstand the third consecutive rate hike of 0.75% later this month. Both the European and Asia stock markets also closed on a positive manner.

The Day Ahead

The FBM KLCI ended the week on an upbeat note along with the regional markets, mainly lifted by the gains in the banking heavyweights following the OPR hike. We believe the local bourse is on pace for further upside after a broad-based rebound on Wall Street overnight, as investors could be taking a view that the CPI data is likely to decline and the Fed may be looking at a smaller hike going forward. Hence, the focus this week will be on the US and Eurozone’s inflation rate. Commodities wise, the crude oil price jumped above USD92 per barrel, while the crude palm oil hovered above RM3,550.

Sector focus:. The technology sector could be in the spotlight, tracking overnight gains in Nasdaq. Besides, investors may see buying interest building up in the energy counters following a rebound in crude oil price. Other sectors like building material, telco, medical-related may be on the way up ahead of Budget 2023.

FBMKLCI Technical Outlook

The FBM KLCI stayed above its daily EMA9 level as the key index extended gains for the third straight session. Technical indicators, however, remained mixed as the MACD Histogram extended a negative bar, while the RSI hovered above 50. A rise above 1,500 could put 1,510-1,530 as the next resistance level, while 1,485 would serve as support, followed by 1,465.

Company Brief

Heitech Padu Bhd has bagged a 5-year contract worth RM66.8m from the Ministry of Defence (Mindef). Under the letter of award signed with Mindef on 8th September 2022, the technology company would provide maintenance on the tactical operational flight trainer, computer-based training and enhanced training aid system at Bangunan Simulator Sukhoi 30-MKM. The company would also provide an air defence simulator system and upgrade the existing system. (The Star)

Destini Bhd's 70.0% indirect subsidiary M Rail Technics Sdn Bhd has accepted a maintenance, repair and overhaul (MRO)contract worth about RM163.6m from the Ministry of Transport. The contract is for level 4 MRO works on 10 units of electric train sets (ETS) operated by Keretapi Tanah Melayu Bhd (KTMB) for a period of 3 years. (The Star)

IHH Healthcare Bhd (IHH) discussions with Sime Darby Holdings Bhd (SDH) and Ramsay Health Care for IHH's proposed acquisition of 100.0% of Ramsay Sime Darby Health Care Sdn Bhd had concluded without a binding agreement. In March 2022, IHH submitted a confidential, conditional, non-binding and indicative proposal to acquire 100.0% of Ramsay Sime Darby for RM5.67bn. (The Edge)

Parkson Holdings Bhd's 55.0%-owned subsidiary, Parkson Retail Group Ltd (PRG), is to sell commercial properties with an aggregate construction area of 76,013 sqm in Qingdao, China for 280.0m yuan (RM182.0m). The department store operating on the properties has been suffering losses due to the weakening spending power of local residents as well as the adverse effects of Covid-19 mitigation policies on the retail business. (The Edge)

Encorp Bhd has teamed up with Touch Group Holdings Sdn Bhd to jointly develop a 5.0-ac piece of land in Kuantan, Pahang into a mixed development featuring retail lots, serviced apartments and a car park podium. The proposed joint venture (JV) provides a strategic partnership and is in line with the group's principal business activity to expand its property development segment. The estimated total cost of the proposed JV is RM328.5m and it is expected to generate a gross profit of RM74.1m. (The Edge)

Oriental Holdings Bhd (OHB) will be investing RM150.0m to build a new hospital, called the Oriental Medical Segamat, in Johor. The construction of the hospital, on a newly purchased 2.4-ha piece of land is OHB's second hospital after Oriental Melaka Straits Medical Centre (OMSMC) in Klebang, Melaka. (The Edge)

CME Group Bhd has bagged a RM145.8m contract to supply 150 units of compact fire rescue tender (CFRT) complete with fittings and accessories to the Fire and Rescue Department for 72 months. CME wholly owned subsidiary, CME Edaran Sdn Bhd had on 8th September 2022 received a letter of acceptance from the Ministry of Housing and Local Government for the order. (The Edge)

Techna-X Bhd is issuing 37.1m new shares to pay off RM1.0m owed by the company to an individual, Chan Kok San, at 2.75 sen per share. Techna-X had entered into a capitalisation agreement with Chan to settle the amount owed. The issue price of 2.75 sen represents a 9.2% discount to the 5-day volume weighted average market price of Techna-X shares of 3.03 sen on 8th September 2022. (The Edge)

Fraser & Neave Holdings Bhd (F&N) plans to leverage its products to gain more market share, while expanding its footprint, especially in the global halal market. Taking the example of its oyster-flavoured sauce and soy sauce from Sri Nona, the products have great prospects to succeed in deeper markets, especially in Muslim majority populations. (The Edge)

Malayan Flour Mills Bhd’s (MFM) partially-owned subsidiary Dindings Poultry Development Centre Sdn Bhd (DPDC) has received a month extension from the Malaysia Competition Commission (MyCC) to submit its written submissions, in response to the proposed poultry feed price-fixing decision the competition watchdog levied against it. (The Edge)

Lim Seong Hai Capital Bhd’s wholly owned subsidiary LSH Best Builders Sdn Bhd (LSHBB) has entered into a collaboration agreement with Gamuda Bhd’s Gamuda Industrial Building System Sdn Bhd (Gamuda IBS) to boost construction efficiency through promoting the use of digital industrial building system (IBS). Under the collaboration agreement, LSHBB and Gamuda IBS aim to support the construction industry’s transition towards the Fourth Industrial Revolution (IR4.0) via the digitalisation of work processes and automation of construction works. (The Edge)

Lambo Group Bhd has reached out to China's finance ministry and the past and present auditors of its indirect wholly owned subsidiary Fujian Accsoft Technology Development Co Ltd over alleged wrongdoing in relation to Fujian Accsoft's financial report. On 25th August 2022, Lambo has appointed Messrs Cheng + Kheng Hoe to assist the company in relation to the investigation into Fujian Accsoft. (The Edge)

Sapura Energy Bhd has announced that Lim San Peen has been appointed as its wholly owned subsidiary Sapura Project Services Sdn Bhd’s (SPSSB) interim liquidator under the order of the Shah Alam High Court. This is in connection with the winding-up petition that SPSSB was served with by Danamin (M) Sdn Bhd on 28th February 2022, in relation to a sum of RM4.2m under a construction contract for the provision of mechanical works. (The Edge)

Parlo Bhd has called off its collaboration with Myanmar employment agency Diamond Palace to source workers for Malaysia and Japan. The termination came after the long-deferred commencement of employment agency related services as Myanmar's borders remained closed due to Covid-19, as well as the uncertain political landscape scenario in Myanmar. (The Edge)

Safetyware Group Bhd, an integrated safety and health solutions provider, made a positive debut on the LEAP Market, opening at 20 sen per share, a premium of five sen or 33% over its reference price of 15 sen. The group’s listing was the fifth listing on the LEAP Market and the 26th on Bursa in 2022. (The Edge)


Source: Mplus Research - 12 Sept 2022

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