Pullback took a pause

Market Review

Malaysia:. The FBM KLCI (+0.8%) halted a four-day losing streak as bargain hunting activities took precedence after more than two-thirds of the key index components closed in green. The lower liners were also rebounded, while the energy sector (- 0.5%) underperformed the positive broader market.

Global markets:. Wall Street remained volatile as the Dow (-1.1%) erased all its previous session’s gains as sentiment turned cautious ahead of the announcement of interest rate hike by the US Federal Reserve. The European stock markets also turned negative, but Asia stock markets ended mostly positive.

The Day Ahead

The FBM KLCI staged a rebound from last week’s selldown as investors snapped up selected banking heavyweights. Nevertheless, we believe the widespread rout on Wall Street overnight over the aggressive rate hikes concerns will spill over to the regional markets and the local bourse. Meanwhile, foreign funds remained in a

selling undertone (5-day net foreign selling:. RM261.4m). Commodities wise, the crude oil price dropped, trading around the USD90 per barrel mark, while the CPO traded above RM3,750.

Sector focus:. The technology sector may track the losses in Nasdaq overnight and trade on a cautious tone ahead of the FOMC meeting. On the other hand, market may favour the banking sector under the interest rate upcycle environment. Also, we like the construction and building materials sector ahead of the Budget 2023 and election talks. Besides, plastic manufacturers could bode well under the weaker ringgit environment.

FBMKLCI Technical Outlook

The FBM KLCI marked notable gains as the key index snapped its four-session losing streak. Technical indicators, however, remained negative as the MACD Histogram extended a negative bar, while the RSI hovered below 50. Resistance is pegged along 1,485-1,500, while the support is located at 1,410-1,430.

Company Brief

Top Glove Corp Bhd’s 4QFY22 net loss stood at RM52.6m vs. a net profit of RM607.9m recorded in the previous corresponding quarter, impacted by escalating costs as well as normalisation in demand and average selling prices (ASPs) for gloves. Revenue for the quarter fell 53.2% YoY to RM990.1m. (The Star)

Nestcon Bhd’s wholly-owned subsidiary Nestcon Infra Sdn Bhd has secured a contract worth RM165.1m from BARA Mining & Construction Sdn Bhd to provide site clearance, earthwork and ancillary works for Block 1 of CBS 2 in Sungai Bakau at the Mukah-Balingan coalfield in Sarawak. The letter of award (LOA) shall be in force for an initial term of 24 months effective from 20th September 2022 to 19th September 2024, with an option to extend for an additional period of 24 months upon written notice not later than 30 days prior to the expiration of the initial term. (The Star)

Sarawak Consolidated Industries Bhd (SCIB) has signed novation agreements with clients pertaining to 6 engineering, procurement, construction and commissioning (EPCC) contracts in Qatar and Oman that SCIB had previously terminated. The novation agreements were signed due to the default in payment by the clients that triggered a termination clause dated 10th November 2021. (The Star)

AME Real Estate Investment Trust (AME REIT) has identified 3 more industrial properties for potential acquisition over the next 12 months from its sponsor AME Elite Consortium Bhd. These properties have a total gross floor area of 256,828 sqf and are located in AME Elite’s industrial parks. (The Edge)

CIMB Group Holdings Bhd has doubled its sustainable finance commitment to RM60.00bn by 2024 after achieving the RM30.00bn target two years ahead of schedule in 1H22. Last year, CIMB announced that it would mobilise RM30.00bn in sustainable finance from 2021 to 2024, aimed at creating positive impacts aligned with its Green, Social, Sustainable Impact Products and Services Framework. (The Edge)

IHH Healthcare Bhd has announced its goals to cap carbon emissions by 2025 and achieve net zero by 2050, while continuing to grow the business. The company also unveiled its sustainability goals, which are encapsulated in the four pillars of patients, people, the public and planet. These announcements were made in conjunction with the 10th anniversary of the company's dual listing in Malaysia and Singapore. (The Edge)

Petronas Chemicals Group Bhd and ExxonMobil have signed a memorandum of understanding to assess the potential for large-scale implementation of advanced plastic recycling technology to help create a circular economy for plastics in Malaysia. The companies will also evaluate opportunities to support improvements in plastic waste collection and sorting in the country. (The Edge)

Pos Malaysia Bhd has announced the implementation of a digitally-enabled initiative through an omnichannel chatbot that allows customers to self-serve customs clearance for inbound parcels from any device. Customers can now pay for their clearance fees and taxes online using the omnichannel chatbot, which could improve overall customer experience significantly and reduce the delivery time to as short as 3 days from arrival at customs to delivery at doorstep. (The Edge)

Sime Darby Property Bhd has announced that the construction industry is in dire need of eco-friendly cement, also known as "green cement" towards realising the nation's aspiration to achieve net-zero greenhouse gas emissions by 2050. Currently, there is no known substitute material for cement, noting that the cement industry is among the highest emitters of carbon dioxide (CO2). (The Edge)

Two people related to the Yang di-Pertuan Agong Al-Sultan Abdullah Ri'ayatuddin Al-Mustafa Billah Shah have resigned from Citaglobal Bhd, effective immediately to pursue their other personal interests. Citaglobal announced the resignation of Tengku Datuk Seri Uzir Tengku Ubaidillah and Tengku Datuk Indera Zubir Tengku Ubaidillah from the company’s boardroom. (The Edge)

Turiya Bhd's shareholders rejected a resolution to re-elect non-independent director, Tunku Datuk Yaacob Khyra, at the group's annual general meeting. 6 shareholders who collectively hold 3.8m shares (representing 99.5% of voting shares) voted against his re-election. In comparison, 29 minority shareholders with a total of 19,330 shares (representing 0.5% of voting shares) voted in favour of the resolution. (The Edge)

SKP Resources Bhd has announced the demise of its executive chairman cum managing director, Datuk Gan Kim Huat. Gan, who passed away at 74, had helmed the group since December 2002. He had over 30 years of experience in plastics injection moulding and was a well-known entrepreneur in the local plastics industry due to his wide knowledge of plastics manufacturing and network of contacts in the industry. (The Edge)

Source: Mplus Research - 21 Sept 2022