Volatility still a feature

Market Review

Malaysia:. The FBM KLCI (-0.8%) recorded its fourth straight session of decline with two-thirds of the key index components closed in red yesterday. The lower liners were also downbeat, while the plantation sector (+0.2%) was the sole outperformer on the broader market.

Global markets:. Wall Street nudged higher in the final trading hour the Dow (+0.6%) rebounded ahead of the two-day FOMC meeting that is widely to raise interest rates by another 75 basis points. The European stock markets ended mixed, while Asia stock markets closed mostly in red.

The Day Ahead

The FBM KLCI tumbled along with the regional peers as global sentiment was dampened by fears over global recession under the interest rate upcycle environment. Also, we believe the local bourse will remain volatile at least until the US Fed’s September meeting amidst heightened expectations for hawkish monetary policy decisions. Commodities wise, the crude oil price hovered around USD92 per barrel mark, while the CPO price retraced from RM3,700. Meanwhile, fears over global recession may continue to weigh on commodities prices.

Sector focus:. Nevertheless, with the slight rebound on Wall Street, we expect bargain hunting activities to emerge within the technology stocks at least for today’s session. Meanwhile, we like selected uptrend stocks under the energy sector as Brent oil price is still hovering around USD92. Besides, investors may focus on the banking sector under the interest rate upcycle environment.

FBMKLCI Technical Outlook

The FBM KLCI breached below its immediate support at 1,465 as the key index declined for the fourth straight session. Technical indicators remained negative as the MACD Histogram extended a negative bar, while the RSI hovered below 50. Next support is located at 1,430, followed by its 52-week low around 1,410, while resistance is set along 1,485-1,500.

Company Brief

Yinson Holdings Bhd's renewables division, Yinson Renewables, has entered the Indonesian market via the acquisition of a majority stake in solar company PT Ineco Solar Solutions (Inecosolar). Inecosolar is a well-established solar system provider in Indonesia with a track record delivering residential and commercial rooftop solar systems. The acquisition aims to enable Inecosolar to provide all-in one zero-capital solutions, expand its project portfolio and establish itself as an independent power producer (IPP) in Indonesia and beyond. (The Star)

Opcom Holdings Bhd has proposed to acquire 4.0m shares representing the entire equity interest in T&J Engineering Sdn Bhd (TJE) for a purchase consideration of RM90.0m in cash and shares. TJE is principally involved in the provision of telecommunications network infrastructure solutions, encompassing civil as well as mechanical and electrical (M&E) engineering telecommunication infrastructure deployment. TJE, which primarily operates in Sarawak, has been sub-awarded contracts for the implementation of the Jalinan Digital Negara (Jendala) Phase 1 project in multiple locations in the state. Barring any unforeseen circumstances and subject to all approvals being obtained, the inter-conditional proposals are expected to be completed by the end-FY23. (The Star)

T7 Global Bhd has secured contracts worth about RM400.0m in Thailand. The group unit Tanjung Offshore Services Sdn Bhd had inked charter and operation and maintenance contracts with Busrakham G11 Ltd for the provision of leasing, operations and maintenance of a mobile offshore production unit in the Nong Yao Field, Southern Gulf of Thailand. The duration of the contract is 5 years, with an extension of 2 years. (The Edge)

EA Technique (M) Bhd said has entered a memorandum of agreement to dispose of a marine vessel for USD4.2m (RM18.7m) to United Arab Emirates-based tanker vessel operator Glory International FZ-LLC. Back on 5th August 2022 that it planned to sell the vessel, Nautica Maharani, to a third-party purchaser for at least USD4.0m, as part of disposals of 3 marine vessels for about USD13.5m. (The Edge)

Reservoir Link Energy Bhd has received a letter of award from Petronas Carigali Sdn Bhd for its second contract from Petroliam Nasional Bhd (Petronas) this year. The contract is for the provision of completion of new technology equipment and services, including Boron EaziGoFlo erosion-resistant sand screen and related services, to Petronas Carigali. (The Edge)

EP Manufacturing Bhd has entered into two investment agreements on its venture into the two-wheeled electric vehicle business. The first agreement, with a minimum investment amount of USD50.0m (RM227.5m), was inked between the company and CIS Pride Fund SPC, Sharkgulf Technologies Group Ltd, as well as Blueshark Holding Ltd. Meanwhile, the second agreement was signed by EP Manufacturing, Siraj Holding LLC, Siraj Holding Sdn Bhd and Sharkgulf, involving a total minimum investment amount of USD125.0m. (The Edge)

Ancom Nylex Bhd has appointed former police chief Tan Sri Mohamad Fuzi Harun and chartered accountant Christina Foo as independent and non-executive directors, effective immediately. Fuzi, 67, had served the Royal Malaysian Police for 35 years in various capacities. Foo, 61, currently sits on the board of UEM Sunrise Bhd and Malaysian Technology Development Corporation Sdn Bhd. (The Edge)

Citaglobal Bhd has reached a final resolution with Datuk William Tan Chee Keong and Choi Chee Ken by agreeing that neither party will appeal the High Court’s decision in the RM59.2m lawsuit relating to a profit guarantee. Additionally, the group agreed to pay Tan and Choi their solicitors’ costs of RM450,000 and awarded costs of RM70,000. (The Edge)

Source: Mplus Research - 20 Sept 2022