Pullback from overbought position

Market Review

Malaysia:. The FBM KLCI (-0.6%) extended its losses alongside with the mostly negative regional markets, marred by selling pressure in selected oil & gas and banking heavyweights yesterday. The lower liners closed mixed, but the healthcare sector (+1.6%) outperformed the mostly negative sectorial peers.

Global markets:. Wall Street surged sharply higher as the Dow (+2.6%) rallied, driven by gains in Apple (+7.6%) following the stronger-than-expected earnings, while Microsoft and Alphabet also mirrored the performance. The European stock markets ended mixed, while Asia stock markets closed mostly negative.

The Day Ahead

The FBM KLCI slipped on Friday as profit-taking activities within selected banking and energy heavyweights on the key index pulled the index lower. While Wall Street staged a massive comeback on Friday, investors may continue to monitor a series of event this week including the interest rate decision by the US Feds and Bank of England to gauge economic outlook and market directions going forward. On the local front, we believe investors’ focus may shift to GE15 theme at least for the near term. Commodities wise, the crude oil traded above USD95, while the CPO price tumbled below RM4,000.

Sector focus:. Construction, utilities, and banking stocks may be in focus as investors may position for the GE15 theme. Meanwhile, the technology sector is likely to be on the play following a surge in Nasdaq. On the contrary, the in CPO price could lead to some selling pressure in the plantation sector, but traders may focus on O&G stocks on the back of firmer oil price.

FBMKLCI Technical Outlook

The FBM KLCI extended losses and closed around its daily EMA60 level. Technical indicators, however, remained positive as the MACD Histogram extended a positive bar, while the RSI hovered above 50. Resistance is set along 1,465-1,485, while the support is located at 1,400-1,420.

Company Brief

Maxis Bhd has appointed Goh Seow Eng as chief executive officer (CEO) effective 1st December 2022, succeeding Gokhan Ogut. Goh will join Maxis as CEO Designate on 1st November 2022 before he officially takes over from Ogut, who will complete his service on 30th November 2022. (The Star)

Texchem Resources Bhd’s 3QFY22 net profit jumped 100.0% YoY to RM2.4m, as the polymer engineering, food and restaurant divisions all performed better thanks to improved focus on profitability and operational efficiency. Revenue for the quarter rose 19.9% YoY to RM282.6m. (The Star)

The Johor state government's investment arm Johor Corp (JCorp) is taking its property arm Damansara Holdings Bhd private by proposing a selective capital repayment (SCR) of 80.0 sen per share to the Damansara Holdings' board. The SCR of 80 sen per share with a total payment of RM43.3m is 81.8% higher compared with the last traded price of 44 sen per share before the company's shares were suspended from trading on 27th October 2022. (The Edge)

HUBLine Bhd's unit Layang Layang Aerospace Sdn Bhd secured a contract worth RM22.0m to provide helicopter services in Sabah to the Election Commission (EC) to be used for the 15th general election (GE15). The contract awarded by EC is valid for a period of 6 months. (The Edge)

CI Holdings Bhd's 60.0%-owned unit Palmtop Vegeoil Products Sdn Bhd is acquiring a 6.6-ac piece of industrial land together with a two-storey factory and office building in Pasir Gudang, Johor for RM33.8m. Palmtop is also buying storage tanks, machinery and other fittings for RM3.3m. The land and building are being acquired from Sanjung Nuri Sdn Bhd, and the other assets from Togo Greenland Sdn Bhd. (The Edge)

Homeritz Corp Bhd's 4QFY22 net profit sky-rocketed 43.8x YoY to RM11.0m, mainly due to an increase in revenue which enabled the group to achieve better economies of scale. Revenue for the quarter soared 710.5% YoY to RM51.1m. A final dividend of 1.0 sen per share, with the payment date to be decided later was announced. (The Edge)

Samaiden Group Bhd has set its sights on a transfer to the Main Market of Bursa Malaysia. The move to the Main Market will enhance its credibility, prestige and reputation and accord it greater recognition and acceptance among investors. (The Edge)

Kim Teck Cheong Consolidated Bhd is seeking to transfer its listing status to the Main Market of Bursa Malaysia. The proposed transfer will enhance its corporate profile, credibility and reputation, and accord it greater recognition and following among institutional investors. (The Edge)

Hextar Healthcare Bhd saw the emergence of Revongen Corp Sdn Bhd as its new substantial shareholder with 176.6m shares or a 16.2% stake. The latest allotment of shares to Revongen came as Hextar Healthcare bought into test kit manufacturer Reszon Diagnostics International Sdn Bhd for RM180.0m via a combination of RM54.0m cash and RM126.0m worth of shares issuance. The acquisition forms part of Hextar Healthcare’s plan to diversify into the healthcare sector. (The Edge)

Destini Bhd has aborted its private placement of up to 10.0% of the company's total issued shares to raise RM16.1m for working capital purposes. The group has reviewed its financial requirements and to explore other avenues of fundraising to meet its financial needs. (The Edge)

PeterLabs Holdings Bhd has reported that Messrs Grant Thornton Malaysia PLT has resigned as auditor of the company due to disagreement over audit fees and disbursements. The group has identified a new auditor, but its appointment can only be finalised upon receiving its consent letter to act as auditor of the company. (The Edge)

Borneo Oil Bhd has proposed a 30.0% private placement to raise RM53.1m to partly fund a plan to increase its shareholdings in a cement producing business to 60.0%, just two days after it completed a RM22.0m placement by issuing 1.04bn shares. (The Edge)

Source: Mplus Research - 31 Oct 2022