Still wobbly

Market Review

Malaysia:. The FBM KLCI (-0.7%) started off the week on a dour note with more than two-thirds of the key index components ended in red following the formation of the new cabinet. The lower liners, however, marched higher, while the energy sector (+1.8%) continues to outperform in the mostly negative sectorial peers.

Global markets:. Wall Street closed lower as the Dow dipped 1.4% after the ISM Services PMI data unexpectedly jumped to 56.5 in November of 2022; fuelling speculation that the Fed may need to increase the interest rate for a longer period. The European stockmarkets ended lower, but Asia stockmarkets closed mixed.

The Day Ahead

The FBM KLCI declined further as investors deployed a “sell on news” strategy following the formation of new cabinet. With the sentiment turning negative on Wall Street, we expect more profit taking activities to emerge on the local front; especially the technology sector. Nevertheless, we believe the downside risk could be limited with investors eyeing for the 10 new Covid-19 easing measures to be announced by China on Wednesday. Back home, the market will be awaiting announcement from the Ministry of Agriculture and Food Security regarding the new mechanism to control egg prices. Commodities wise, the Brent crude oil price fell to USD83 per barrel level, while the CPO price hovered above RM3,950.

Sector focus:. The poultry segment will be on traders’ radar as the market awaits the new price control mechanism. Meanwhile, we expect the construction, solar related and telco sectors to stay in focus ahead of the re-tabling of Budget 2023. Also, the market may look for window dressing trades.

FBMKLCI Technical Outlook

The FBM KLCI slid further to close below its daily EMA9 level. Technical indicators turned mixed as the MACD Histogram plotted a negative bar, while the RSI is hovering above 50. Support is envisaged along 1,450-1,460, while the resistance is set at 1,500-1,510.

Company Brief

Genting Malaysia Bhd's (GenM) indirect wholly-owned subsidiary, Genting ER II LLC (GER II) has entered into a share purchase agreement with Kien Huat Realty III Ltd (KH) to purchase the entire 1,510 Series F convertible preferred stock of Empire Resorts Inc (Series F) for USD100.0m (RM438.5m). Empire is a Delaware corporation incorporated on 19th March 1993 with various subsidiaries engaged in hospitality and gaming. (The Star)

Malaysian Resources Corp Bhd's (MRCB) wholly-owned subsidiary Semasa Parking Sdn Bhd has secured a contract from Sentral Real Estate Investment Trust (REIT) for the operations of car parks at Menara Shell and Platinum Sentral. The operations will be for a period of 3 years at both locations. Under the agreement, the minimum guaranteed rental at Menara Shell and Platinum Sentral will be RM200,000 annd RM95,000 respectively. (The Star)

Malaysia Airports Holdings Bhd (MAHB) non-executive chairman Datuk Seri Dr Zambry Abdul Kadir resigned from his position on 3rd December 2022, following his appointment as foreign minister. (The Edge)

MQ Technology Bhd has redesignated Datuk Nurulhidayah Ahmad Zahid as its group chairman and swapped her role with Datuk Lim Char Boo, who was the group’s vice chairman. Nurulhidayah was the daughter of Umno president and newly-appointed Deputy Prime Minister (DPM) Datuk Seri Dr Ahmad Zahid Hamidi and assumed the role of vice-chairman on 2nd June 2022. (The Edge)

Jiankun International Bhd has appointed Nurulhidayah’s husband, Datuk Saiful Nizam Mohd Yusoff, as president of the group. Saiful, who was serving as Jainkun’s executive deputy chairman, holds an 8.6% stake in the group. (The Edge)  

Yinson Holdings Bhd has inked an agreement with Azule Energy to undertake preliminary activities for the provision, operation and maintenance of a floating, production, storage and offloading asset for the Agogo Integrated West Hub Development Project in Angola. The agreement is valid for 60 days, with an aggregated value of USD218.0m (RM956.0m). (The Edge)  

AME Real Estate Investment Trust (REIT) has proposed to acquire 3 industrial properties in Iskandar Malaysia for RM69.3m, boosting its total asset value by 12.8% to RM644.1m. AME REIT will retain a premium portfolio of 37 properties upon completion of the acquisition. The properties consist of two industrial properties in i-Park @ Indahpura and an industrial property in i-Park @ Senai Airport City, Senai. (The Edge)  

Suria Capital Holdings Bhd has commenced negotiation with the Sabah state government for a 30-year extension to its concessions to operate ports in Sabah. The Sabah state Cabinet has agreed for a concession period of the group’s unit, Sabah Ports Sdn Bhd, to be extended by 30-years from 1st September 2034 to 31st August 2064, subject to terms and conditions to be mutually agreed upon with the Sabah state government. (The Edge)  

Bank Islam Malaysia Bhd has declared an interim single-tier dividend of 10.4 sen per share, amounting to approximately RM224.2m, for FY22. (The Edge)

Source: Mplus Research - 6 Dec 2022