Spurred by solid 3Q22 GDP

Market Review

Malaysia:. The FBM KLCI (+1.3%) closed sharply higher, taking cue from gains on Wall Street overnight, coupled with the stronger-than-expected 3Q22 GDP data that advanced 14.2% YoY. The lower liners also advanced, but the REIT sector (-0.2%) underperformed the positive sectorial peers.

Global markets:. The US stockmarkets inched higher with the Dow rising 0.1% as investors continue to cheer on the slowdown in inflation data. The European stockmarkets ended mostly upbeat, while Asia stock markets finished on a positive note after China’s move to ease Covid restrictions.

The Day Ahead

The FBM KLCI notched higher on Friday, fuelled by optimism over Malaysia’s 3Q2022 economy growth as well as the significant global markets recovery move. We reckon that the local bourse should remain resilient, taking cue from the buoyant Wall Street over the weekend. Still, investors may pay attention to the US economic data such as the US retail sales as well as jobs data as that may provide more insights into the aggressiveness of upcoming rate hikes. Commodities wise, the crude oil price jumped above USD95 as the market cheered the easing of Covid-19 restrictions in China, while the CPO price climbed above RM4,250.

Sector focus:. We believe the technology sector will be on further upward move in tandem with the gains in Nasdaq. Meanwhile, the energy sector could remain attractive for investors following a jump in crude oil price. Besides, the glove sector’s momentum is likely to persist over the near term as the glove ASP outlook is likely to stabilise in the next 6-9 months.

FBMKLCI Technical Outlook

The FBM KLCI jumped, breaching above its immediate resistance at 1,465 as well as its daily EMA120 level. Technical indicators were positive as the MACD Histogram turned positive, while the RSI hovered above 50. Next resistance is pegged along 1,480-1,500, support is set at 1,420-1,430.

Company Brief

Carlsberg Brewery Malaysia Bhd’s 3QFY22 net profit surged 193.9% YoY to RM76.4m, as it rebounded from a low base caused by Covid-19 restrictions. Revenue for the quarter rose 63.7% YoY to RM571.6m. A third interim dividend of 19.0 sen, payable on 9th December 2022 was declared (The Star)

IHH Healthcare Bhd is in discussion with the Securities and Exchange Board of India to determine the next steps to proceed with the mandatory open offer for an additional 26.0% stake in Fortis Healthcare Ltd. Should IHH receive approval from the Indian market regulator, the integrated healthcare provider would be ready to undertake the offer in a timely manner. (The Edge)

Gas Malaysia Bhd, which is being sued by MSM Malaysia Holdings Bhd over a disputed sum of RM10.3m relating to gas supply to MSM Malaysia's sugar refinery unit in Johor, has reported that it maintains their stand on acting in accordance with the gas supply agreement (GSA) inked by the unit. Gas Malaysia also explained that a take-or-pay (TOP) provision is part of the contractual requirements. (The Edge)

Kelington Group Bhd is investing RM45.0m to set up its second carbon dioxide gas recovery plant at the existing site in Kerteh, Terengganu. The group existing plant is operating at more than 80.0% of its capacity, and so it is the right time to invest in the second plant to capture future opportunities. The construction of the plant to manufacture an additional 70,000 tonnes per year of beverage grade liquid carbon dioxide will commence in December 2022, and it is expected to be completed by December 2023. (The Edge)

Muar Ban Lee Group Bhd (MBL) is disposing of its entire 51.0% stake in its Indonesian unit PT Serdang Jaya Perdana (SJP) for 36.00bn Rupiah (RM11.0m). MBL is expected to incur a net loss of RM524,800 from the disposal. (The Edge)

Pharmaniaga Bhd is working to ensure sufficient supply of the Sinovac Covid-19 vaccine for children, and additional boosters for adults at several private hospitals and clinics across the country. Pharmaniaga acknowledged increasing concern over the rise in the number of new Covid-19 cases in the past week. (The Edge)

Bursa Malaysia has publicly reprimanded TA Securities Holdings Bhd as the sponsor and principal adviser for Catcha Digital Bhd for breaches in the Bursa Malaysia Securities ACE Market Listing Requirements (ACE Market LR). TA Securities had failed to assess the internal controls of REV and risk management systems of iMedia Asia Sdn Bhd and its subsidiaries to determine the suitability of the enlarged Catcha group for listing. In addition, it had repeatedly provided inaccurate and misleading statements and confirmation to Bursa Malaysia Securities in relation to the matter. (The Edge)

Malaysian Rating Corp Bhd (MARC) has assigned a final rating of AA-IS to MyEG Services Bhd’s proposed Islamic medium-term notes (IMTN) programme of up to RM1.00bn, with a stable outlook. The rating agency had reviewed the final documentation of the programme, and was satisfied that the terms and conditions had not changed in any material way from the draft documentation on which the preliminary rating was based. (The Edge)

Source: Mplus Research - 14 Nov 2022