Relief rebound

Market Review

Malaysia:. The FBM KLCI (+0.7%) snapped a 5-day losing streak as bargain hunting activities took charge with more than two-thirds of the key index components advanced. The lower liners also advanced, while 11 of the 13 major sectors ended in green with the healthcare sector (+1.3%) leading the pack.

Global markets:. Wall Street erased some of its previous session gains as the Dow (-1.3%) fell on a consumer survey from the University of Michigan which implies that inflation expectations remain on the rise. The European stock markets extended their lead, while Asia stock markets ended mostly upbeat.

The Day Ahead

The FBM KLCI staged a rebound on Friday following the positive cues from global markets. However, we opine that the rebound attempt may stall as Wall Street was hit by another wild swing on the back of rising inflation expectations suggested in University of Michigan consumer survey and potentially the rising concerns of the tightening monetary policies could push the US economy into a recession. Nevertheless, we still expect bargain hunting to emerge within the solid balance sheet companies and stable consumer stocks. Commodities wise, the crude oil price hovered around USD91, while the CPO price traded along RM3,800.

Sector focus:. The broad-based rebound on Friday could fizzle as global sentiment remained negative and the technology stock may see further selldown following the declining session on Nasdaq. Investors could favour the consumer, utilities and banking sectors; the latter may benefit under the interest rate upcycle environment.

FBMKLCI Technical Outlook

The FBM KLCI rebounded from its five-session losing streak but stayed below the daily EMA9 level. Technical indicators were negative as the MACD Histogram extended a positive bar, while the RSI remained below 50. Resistance is set along 1,400-1,430, while the support is envisaged along 1,355-1,365.

Company Brief

Tenaga Nasional Bhd (TNB)’s unit has secured financing of up to RM185.0m from CIMB Islamic Bank Bhd for its third large-scale solar project in Bukit Selambau, Kuala Muda, Kedah. The project, with a capacity of 50.0MWac (75MWdc), is part of the government’s Large Scale Solar @ Mentari or Large Scale Solar 4 (LSS4) programme.

Separately, another unit of TNB, TNB Power Generation Sdn Bhd, has obtained approval from the Energy Commission to refurbish Sungai Perak hydroelectric power plants with a capacity of 650.8MW. The project, dubbed Hydro Life Extension Programme, involves 6 power stations comprising 18 units, with refurbishment works commencing in 2024. (The Edge)

The Malaysia Competition Commission (MyCC) is seeking a review of the Federal Court’s decision not to grant leave to the watchdog to appeal against the rejection of its bid to reinstate a fine on Capital A Bhd’s AirAsia Bhd and Malaysia Airlines System Bhd. MyCC had imposed a fine of RM10.0m each on AirAsia and Malaysia Airlines in 2014, after it found that the 2 firms had breached the market sharing prohibition under Section 4(2) of the Competition Act 2010. (The Edge)

No appeal has been filed by Emqore Envesecure Private Capital Trust against a court decision to dismiss the US fund’s lawsuit seeking over US$6.50bn (RM30.56bn) in damages from IHH Healthcare Bhd and others. Emqore had a 30- day window to file an appeal against the New Jersey District Court’s order dated 7th September 2022. (The Edge)

Hibiscus Petroleum Bhd indirect wholly-owned subsidiary, Anasuria Hibiscus UK Ltd, is set to operate in its North Sea block on a 100.0% interest basis. This comes after NEO Energy (ZPL) Ltd assigned its 30.0% interest in the related UK petroleum production licence to Anasuria. (The Edge)

Samaiden Group Bhd’s unit has signed a partnership agreement with Thingnario Ltd to pursue opportunities in the development of telemetry monitoring artificial intelligence (AI)-based solutions for existing and future businesses. Its wholly owned subsidiary Samaiden Sdn Bhd would explore the AI system to support the renewable energy and energy efficiency businesses of Samaiden within Malaysia. (The Edge)

Pansar Bhd has secured a contract worth RM67.1m in Sarawak. Its unit, Perbena Emas Sdn Bhd, has received a letter of acceptance from Public Works Department Sarawak for the completion of the remaining works for a road in Jalan Lubok Teranggas, Samarahan Division. (The Edge)

Revenue Group Bhd is planning to undertake a bonus issue of up to 105.6m Warrants B, on the basis of 1 warrant for every 6 existing shares held. The exercise price of the Warrants B will be fixed by the board at a later date. Upon full exercise of the Warrants B, the gross proceeds will be used to fund additional working capital such as courier charges, as well as transportation and other costs related to the installation and deployment of the electronic data capture terminal. (The Edge)

Stella Holdings Bhd is offloading its healthcare business to Panorama Elit Sdn Bhd, as part of its efforts to streamline and focus on its core construction and property development segments. The group will dispose of its entire equity interest in Stella Healthcare Holdings Sdn Bhd for RM12.0m cash. (The Edge)

Source: Mplus Research - 17 Oct 2022