Solidifying above 1,400

Market Review

Malaysia:. The FBM KLCI (+0.8%) marched higher for the third straight session, underpinned by gains in plantation and oil & gas heavyweights yesterday. The lower liners also tipped higher, while the broader market ended mostly positive, led by the plantation sector (+2.4%) following the rebound in CPO prices.

Global markets:. Wall Street ended mildly negative with despite the Dow (-0.1%) recovering most of its intraday losses as the US treasury yields and Dollar regained their lost ground after a two-session pullback. The European markets also retreated, but the Asia markets ended mostly upbeat.

The Day Ahead

The FBM KLCI climbed for the third consecutive session, taking positive cue from the global markets as industrial products & services and plantation heavyweights led gains. Given Wall Street ended flat without significant selling pressure which may benefit stocks on the local front. Commodity wise, crude oil price ticked above USD93 after OPEC+ announced a production cut, while the CPO price sustained above RM3,750 in the anticipation of an easing of lockdown measure in China, which may boost demand going forward.

Sector focus:. We believe the investors may favour energy stocks following the uptick in crude oil price after OPEC+ announced the production cut policy. Besides, budget-related counters including solar related, telecommunications, and selected consumer stocks may gain traction. Also, we like the technology sector as Wall Street ended mildly negative.

FBMKLCI Technical Outlook

The FBM KLCI breached above its immediate resistance of 1,410. Technical indicators were mixed as the MACD Histogram crossed above zero, while the RSI hovered above 30, approaching 50. Next resistance is pegged along 1,430-1,450, while the support is located at 52-week low at 1,400, followed by 1,380.

Company Brief

Ancom Nylex Bhd has completed the acquisition of a 25.0%-equity interest in Ancom-Chemquest Terminals Sdn Bhd (ACT) for RM4.0m cash. ACT is primarily involved in the business of chemical tank farm and warehouse, which it builds, owns, operates, leases, and manages. It owns 48 tanks, equivalent to 44,100 cubic meters of tank storage capacity in West Port, Klang, Selangor. (The Star)

Malayan United Industries Bhd (MUIB) has disposed of a 5.6% stake in Pan Malaysia Corp Bhd (PMC) for RM6.5m to Fortress Opportunistic Growth Fund. Following the disposal, MUIB and its subsidiaries now hold a total of 428.1m shares, representing 55.5% equity interest in PMC. (The Star)

S P Setia Bhd has unveiled its Setia Neo II terrace factory which will potentially boost business growth with a strategic address in the industrial zone of Johor in Taman Industri Jaya. With a gross development value of RM75.4m, Setia Neo II has 56 units of double-storey terrace factories with a land area of 24x80 ft and 24x108 ft, priced from RM1.12m. The project has already recorded a 60.0% take-up rate since the launch on 12th September 2022. (The Star)

FGV Holdings Bhd has failed to strike out a counterclaim by five of its former non executive directors, including Tan Sri Ismee Ismail and Tan Sri Sulaiman Mahbob, over the controversial acquisition of Asian Plantations Ltd in 2014. (The Edge)

Caely Holdings Bhd has filed a police report against 12 shareholders, including former managing director Datuk Chuah Chin Lai and his wife Datin Fong Nyok Yoon, for allegedly misappropriating nearly RM31.0m in funds. Back in August 2022, Caely had filed a lawsuit against the 12 shareholders seeking the return of the funds. (The Edge)

OCK Group Bhd has inked a shareholder agreement with the Ministry of Finance (MOF) in Laos to further expand its global footprint. Under this agreement, OCK will set up a joint venture company under the name OCK Laos TowerCo Co Ltd, whereby OCK will hold a majority stake of 70.0%, while the remaining 30.0% stake will be held by the Laos MOF. (The Edge)

Techna-X Bhd has dropped plans for a backdoor listing of its 50.0%-owned Chinese capacitor technology subsidiary, HK Aerospace Beidou New Technology Co Ltd (HKAB), via Singapore-listed Chaswood Resources Holdings. This collective decision was arrived at given the inadvertent delay in completing the relevant due diligence and corporate restructuring exercises of HKAB in connection with the reverse takeover offer, stemming from the incessant travel, movement and other restrictions implemented by the authorities in China in its pursuit of zero-Covid policy. (The Edge)

Source: Mplus Research - 6 Oct 2022