Recovery took a pause

Market Review

Malaysia:. The FBM KLCI (-0.1%) halted a six-day winning streak, dragged by mild profit taking in Petronas-related and selected banking heavyweights yesterday. The lower liners, however, extended their lead, while the utilities sector (-0.4%) underperformed the mixed sectorial peers.

Global markets:. Wall Street marched higher as the Dow (+1.1%) rose, driven by a batch of stronger-than-expected corporate earnings from Coca-cola, General Motors and Microsoft. The European stock markets closed mostly positive, but the Asia stock markets finished mixed.

The Day Ahead

The FBM KLCI took a breather from earlier winning streak as profit-taking activities emerged in Petronas-related and selected banking heavyweights. However, we believe the buying interest could spillover from Wall Street to stocks on the local front, coupled with the foreign investors turning net buyers (5-day net buy valued at RM37.1m). Meanwhile, traders might be attuning towards GE15 theme or re-tabling of Budget 2023 after the GE15. Commodities wise, the crude oil price traded above USD93, while the CPO price hovered above RM4,150.

Sector focus:. The telecommunications & media sector may continue to stay active with the ongoing 5G rollout, while waiting for the re-tabling of Budget 2023. For GE15 theme, we like construction, building materials, as well as selected banking stocks. Meanwhile, the technology sector may track the solid overnight gains in Nasdaq.

FBMKLCI Technical Outlook

The FBM KLCI retreated to close slightly below its daily EMA60 level, snapping the six-day winning streak. Market breadth, however, remained positive as the MACD Histogram extended a positive bar, while the RSI remained above 50. Resistance is envisaged along 1,465-1,485, while the support is set at 1,400-1,420.

Company Brief

Puncak Niaga Holdings Bhd's wholly-owned subsidiary TRIplc Medical Sdn Bhd has secured a RM44.1m contract to supply additional medical equipment for Hospital UiTM Puncak Alam Campus in Selangor. The contract will run for a period of 40 months from 1st July 2022 to 31st October 2025. (The Star)

Ni Hsin Group Bhd's electric vehicle (EV) unit has received the vehicle type approvals from the Road Transport Department for two models of its EBIXON EV bikes; the TAILG BOLD and TAILG TORQ in the personal and commercial categories respectively. The company will commence completely knocked down (CKD) assembly of the EBIXON EV Bikes in November 2022 for launch on the Malaysian market. (The Star)

Sersol Bhd has been appointed an agent for the Malaysia Premium Visa Programme (PVIP) by the Immigration Department of Malaysia. The appointment would enable it to act as an agent on behalf of the Immigration Department to process up to 300 applications over a period of 3 years from 21st October 2022. The PVIP is a long-term residency status visa that enables investors, entrepreneurs and foreign talents to live and work or study in Malaysia for up to 20 years. (The Star)

Caely Holdings Bhd has been issued with another requisition notice to convene an extraordinary general meeting dated 21st October 2022 from Messrs Ahmad Deniel, Ruben & Co, which represents the company’s former executive vice chairman Datin Seri Jessie Wong Siaw Puie, and four others; Zhang Jia, Leow Boon Kin, Datuk JP Low Kok Chuan and Cheng Kwee. However, the company did not disclose reasons for the requisition. (The Edge)

Lingkaran Trans Kota Holdings Bhd (Litrak) has announced a special dividend of RM4.57 per share, after completion of the disposal of two highway concessionaires under its purview to Amanat Lebuhraya Rakyat Bhd. The special dividend’s ex-date is 10th November 2022, with entitlement on 11th November 2022. (The Edge)

Globetronics Technology Bhd’s 3QFY22 net profit fell 21.4% YoY to RM12.8m, mainly on lower volume loadings from some of the group’s customers. Revenue for the quarter declined 17.3% YoY to RM46.0m.

Separately, Globetronics announced the retirement of its 74-year-old founder Michael Ng Kweng Chong, who has resigned as the group’s executive chairman, effective 1st November 2022. Succeeding him as executive chairman will be his 46-year-old son Ng Kok Yu. (The Edge)

Oriental Interest Bhd’s (OIB) 4QFY22 net profit surged 439.8% YoY to RM27.6m, driven by higher earnings in property development and general construction segments. Revenue for the quarter jumped 154.6% YoY to RM154.7m. An interim single tier dividend of 5.0 sen per share, payable on 30th December 2022 was declared. (The Edge)

Sunview Group Bhd has clinched a RM93.8m engineering, procurement, construction and commissioning contract for the development of a 26.0-MW large scale solar photovoltaic (PV) plant in Kuala Langat, Selangor. The contract was awarded to the group’s wholly-owned subsidiary Fabulous Sunview Sdn Bhd from LSS TPG Sdn Bhd, a unit of Advancecon Holdings Bhd. (The Edge)

Advancecon Holdings Bhd’s 51.0%-owned indirect subsidiary Spring Energy Sdn Bhd is disposing of a piece of land in Kedah to plastic packaging manufacturer Thong Guan Industries Bhd for RM34.0m or RM9.95/sqf. (The Edge)

Sarawak Consolidated Industries Bhd (SCIB) has redesignated Shamsul Anuar Ahamad Ibrahim as its independent non-executive chairman with immediate effect. He replaces Datuk Dr Mohd Abdul Karim Abdullah, who has been redesignated as a non-independent and non-executive director. (The Edge)

Tanco Holdings Bhd has proposed to raise RM100.0m through an allotment of 100.0m redeemable preference shares of RM1.00 each to the Social Security Organisation (Socso). Proceeds will be used for working capital, investments and targeted expansion of the companies within Tanco and its subsidiaries. (The Edge)

Yew Lee Pacific Group Bhd has proposed a bonus issue of warrants on the basis of 1 warrant for every 2 existing ordinary shares, on an entitlement date to be determined later. The exercise entails the issuance of 266.2m warrants, based on Yew Lee’s total issued share capital of RM67.5m, comprising 532.4 m ordinary shares as of 3rd October 022. (The Edge)

BT Capital Investment Ltd is contemplating proceeding with its suit against ILB Group Bhd and its board of directors to block the purchase of a commercial land, despite the fact that the transaction was already called off. ILB had attempted the acquisition using the 20.0% general mandate that was intended to improve cash flow, boost liquidity and working capital. BT Capital Investment, a minority shareholder in logistics company ILB, claimed the acquisition would have diluted the stakes of existing shareholders and that the ILB board misled minority shareholders by not announcing material information immediately. (The Edge)

Independent adviser MainStreet Advisers Sdn Bhd has advised shareholders of Mulpha International Bhd to reject the unconditional voluntary takeover bid of the group by several joint offerors, deeming the offer price of RM2.30 per share as not fair and not reasonable. MainStreet Advisers said based on the revalued net asset value approach, the offer price per share represents a discount of RM14.92 or 86.6% to the estimated value of Mulpha share of RM17.22 apiece. (The Edge)

Minority shareholders of Ornapaper Bhd, have also advised by MainStreet Advisers to reject the mandatory takeover offer launched by its substantial shareholders, Sai Ah Sai, Sai Han Siong, Sai Chin Hock and persons acting in concert, who collectively hold 33.0% of Ornapaper shares, to acquire the remaining shares at RM1.06 each or RM52.7m. The offer is not fair, after taking into consideration that the offer price represents a discount of RM1.52 or 58.9% to the net assets per Ornapaper share of RM2.58. (The Edge)

Source: Mplus Research - 26 Oct 2022