Re-capturing 1,400

Market Review

Malaysia:. The FBM KLCI (+1.0%) marched higher to claw its way back above 1,400, driven by gains in more than two-thirds of the key index components yesterday. The lower liners also extended their gains, while the plantation sector (+3.3%) rallied after CPO futures price surged above RM4,000/MT.

Global markets:. The Dow (+1.1%) cemented its position above 30,000, driven by the better-than-expected corporate earnings from Goldman Sachs, while Netflix’s subscribers growth topped estimates. The European stock markets stayed upbeat, while Asia stock markets closed mostly positive.

The Day Ahead

The FBM KLCI saw a comeback buoyed by buying momentum from foreign funds following a positive cue from Wall Street. Investors may shrug off some recession fear in the near term to position themselves in the ongoing third quarter reporting season on Wall Street. Meanwhile, we expect sentiment on the local bourse to stablise once the GE15 official date is announced later this week. Commodities wise, the crude oil traded above USD90, while the CPO price sustained above RM4,000. The crude oil price may continue to settle lower on the back of higher US supply and lower fuel demand from China.

Sector focus:. Buying interest may continue to build up in the plantation counters given the sustained CPO price. Besides, the technology sector may extend its rallies as buying interest was noticed in Wall Street Nasdaq. We continue to like solid consumer and healthcare stocks.

FBMKLCI Technical Outlook

The FBM KLCI rebounded to close above the key 1,400 and its daily EMA-9 level. Technical indicators remained negative as the MACD Histogram geared towards zero in the negative zone, while the RSI hovered below 50. Resistance is set along 1,420-1,430, while the support is envisaged along 1,355-1,365.

Company Brief

IJM Corp Bhd’s wholly-owned subsidiary IJM Construction Sdn Bhd has secured 2 contracts in Selangor totalling RM981.8m from the Works Ministry. The first contract worth RM831.0m was a design-and-build turnkey construction contract for a new 312-bedded government hospital in Kapar via a 60:40 joint venture between IJM Construction Sdn Bhd and Ganda Imbuhan Sdn Bhd. Another contract worth RM150.8m is for the construction of an Inland Revenue Board (IRB) office tower in Shah Alam. Construction work for the hospital with specialist medical facilities is scheduled to commence in November 2022 and is expected to be completed within 48 months by November 2026. Construction work of the 18- storey IRB building is scheduled to commence on 1st November 2022 and is expected to be completed within 36 months by 31st October 2025. (The Star)

Pantech Group Holdings Bhd’s 2QFY23 net profit jumped 102.5% YoY to RM31.0m, lifted by the manufacturing division’s robust exports of steel products. Revenue for the quarter surged 97.8% YoY to RM270.0m. (The Star)

Affin Bank Bhd has announced a single-tier special dividend of 18.09 sen per share, amounting to RM400.2m, following the divestment of a 63.0%-stake it owns in Affin Hwang Management Bhd that was completed on 29th July 2022. Apart from the proposed special dividend, the bank has also proposed an interim dividend of 4.53 sen, amounting to RM100.2m, for FY22. (The Edge)

The former executive chairman of Caely Holdings Bhd, Datuk Wira Ng Chun Hau, has filed a defamation suit in the Kuala Lumpur High Court against Caely and its new board, over defamatory statements in connection with misappropriated funds amounting to RM30.6m. Ng was the executive chairman of Caely from February 2021 to May 2022. (The Edge)

G Capital Bhd is planning a joint venture (JV) to develop mini-hydropower projects in Sabah, which could see the JV raise funds of no less than RM3.00bn for the first 200.0MW. It would be G Capital’s first foray into the renewable energy segment in East Malaysia. Its wholly-owned unit, CM Creative Itinerary Sdn Bhd, on Tuesday inked a JV and shareholders’ agreement with Innoprise Synergy Sdn Bhd and Kerap Hijau Sdn Bhd. (The Edge)

CN Asia Corp Bhd has announced that Messrs Ong & Wong Chartered Accountant has resigned as its external auditor, as the firm has been temporarily banned from auditing public interest entities. The firm has tendered its resignation after it was notified by the Securities Commission Malaysia (SC)’s Audit Oversight Board (AOB) that it was prohibited from auditing financial statements of public interest entities for 12 months, commencing on 7th Sept 2022. (The Edge)

Teo Guan Lee Corp Bhd has announced several boardroom changes on 18th October 2022, including the redesignation of the group’s managing director Toh Kian Beng as executive chairman. Taking over the managing director’s post is her brother, Toh Choon Keat, who had been serving as non-independent and executive director. Kian Beng and Choon Keat own stakes of 1.2% and 0.2% respectively in Teo Guan Lee. (The Edge)

Berjaya Land Bhd (BLand) has acquired 40.0m shares or 2.3% stake in Berjaya Food Bhd (BFood) for RM32.0m cash, or 80.0 sen per share. This raised BLand’s stake in BFood to 2.8%. (The Edge)

Mynews Holdings Bhd has reported that a winding-up petition levied on its unit in relation to a rental dispute is set to be withdrawn, following the settlement of the amount allegedly owed. Mynews Retail Sdn Bhd had paid the petitioner; Kumpulan Hamzah Kwong Hing Realty Sdn Bhd the RM112,770 that was allegedly owed. (The Edge)

Source: Mplus Research - 19 Oct 2022