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market pulse
Market Pulse

Finding stability

The FBM KLCI endured a choppy trading session before bargain hunting activities took charge to power the key index higher yesterday. For now, we reckon that the local bourse may attempt to find stability with nibbling on beaten down stocks. Although the prevailing negative market sentiment is deterring investors to take large positions, the lower liners may continue to see rotational play, boosted by the higher than historical average trading activities.

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market pulse
Market Pulse

Downward bias consolidation resumes

It was another bleak performance on the local bourse that was marred by the selling pressure from gloves heavyweights yesterday. The near term weakness is expected to prevail as any recovery will be tempered by quick profit taking activities. Nevertheless, we still think that rotational play will remain on the table that is buoyed by rise in trading activities as of late, though the negative market sentiment are also keeping gains in check. Hence, we advocate traders to lock in quick profits, avoiding to holding position for too long.

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M+ Wiz

Is the market too challenging for you?

Overall (after testing for 55 days live in our virtual portfolio), we have some positive days near to 56%, while positive trades just slightly above 50%. You must be asking why the virtual portfolio could stand out so well at above 30% returns?

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technical focus
Technical Focus

Technical Focus – 21st Oct 20

I-Stone is regarded as a proxy to the rising adoption of automation amongst companies in order to improve production efficiencies & capabilities and to maintain a leaner operational cost structure. Key clients include EMS players like Dyson, V.S. Industry Bhd and ATA IMS Bhd. Capitalising on the adoption of fourth industrial revolution (Industry 4.0) with
opportunities under the field of artificial intelligence, big data, robotics and the leasing of automated lines and equipment. Technically, a flag-formation breakout above RM0.215 may lead to further upsides towards the next resistances at
RM0.24-RM0.265 with long term target at RM0.28.

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market pulse
Market Pulse

Keeping gains in check

The FBM KLCI endured a choppy trading session before succumbing to quick profit taking as investors were roiled by the political uncertainty in the local scene, coupled with the selling activities from foreign funds. Meanwhile, the further stringent measures imposed due to the unabated new Covid-19 cases may derail the prospects of economic recovery projection in 2021. Likewise, the lower liners and broader market shares may undergo a consolidation to allow fresh legs return into the picture.

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market pulse
Market Pulse

Uptick in momentum

Expectedly, the FBM KLCI rebounded from the three-day slump as investors bargain hunt on beaten down stocks and likely to charge higher today. At the same time, the positive Chinese economic data may also serve as a leading indicator of global economic recovery, should Covid-19 were to be contained over the
foreseeable future. The lower liners could have follow through buying support, boosted by the sturdy trading activities as market participants capitalise on the positive market breadth.

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Stock Digest

SLP Resources Bhd – 19th Oct 20

SLP Resources Bhd (SLP) saw its operations returned to full force in recent months
as the company ramp up their production to fulfil the backlog orders. Although the
recovery is on the cards, we think that production has yet to reach pre-Covid-19
levels as demand remain relatively sluggish, particularly from Europe that is remain
beleaguered by the continuous rising new daily cases. Nevertheless, the worst could
be over for SLP as days of recovery are set to shape up in FY21f.

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technical focus
Technical Focus

Technical Focus – 19th Oct 20

Malaysia alongside with numerous countries across the globe is heading into the third wave of Covid-19. Back home, the number of new cases reported has surged to triple digits consecutively since the start of October 2020. The usage of personal protective equipment (PPE) by healthcare workers under the Health Ministry (MOH) is expected to see uptick in recent and upcoming months. Hence, we reckon that demand for rapid test kits to be on the rise in tandem with mass testing conducted in ensuring the safety of the nation’s living environment.

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market pulse
Market Pulse

Rebound in store

After three consecutive days of pullback, we reckon that a rebound is in store as investors bargain hunt on beaten down stocks. The upcoming release of China 3Q2020 GDP data may serve as a leading indicator to the pace of global economic recovery as China’s economic activities has returned to the norm with only double digits of new daily cases reported since April 2020. Meanwhile, trading activities remain relatively robust will ensure the rotational play remain in place under the prevailing low yield environment.

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macquarie structured warrants 20200914
Macquarie Warrants

Demand surged for call warrants over Mah Sing and Comfort Glove

The Malaysia warrants market saw a steep recovery in terms of turnover last week which saw a total of RM1.0bil. traded compared to RM767.0mil traded the week before. The warrants over Malaysian shares continued to dominate the warrants space with RM992.5mil turnover, representing 98.7% of the total warrants market. In particular, we saw enormous investors interest in call warrants over Mah Sing Group (Mah Sing) and Comfort Glove last week as both underlyings saw their share prices reaching new highs.

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market pulse
Market Pulse

Downward bias consolidation

The extended consolidation on the local bourse is likely to continue in view of the lack of fresh leads, coupled with the uncertainties surrounding the political and Covid-19 situation. The negative sentiment across global markets may also weigh on Bursa Malaysia, although bargain hunting activities may also emerge at later stage. Although there were signs of quick profit taking activities, rotational play amongst the lower liners are keep trading activities at a vibrant level as investors continue to seek for higher yield investments.

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market pulse
Market Pulse

Another jab from US Department of Labour

We reckon that the consolidation will remain a feature over the foreseeable future as the recent spike in Covid-19 cases may keep a lid on the prospects of economic recovery. US Department of Labour (DOL) move to add Malaysian rubber gloves to its latest list of goods produced with forced labour also trigger some profit taking to gloves heavyweights today. Elsewhere, the re-implementation of Conditional Movement Control Order saw trading activities turning up the heat again as rotational play are shifting towards the healthcare thematic space.

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technical focus
Technical Focus

Technical Focus – 14th Oct 20

Involved in the design and volume production of high precision metal machining of
hard disk drive, computer, camera, consumer electronics and electrical and automotive industries components. Ventured into the production of three-ply surgical mask in early July 2020 under the brand “Novid” and will expand production into kids mask and N95 respirators is deemed timely. Operating with a lean balance sheet with net gearing at 0.04x as of 30th June 2020. Technically, a breakout above RM1.16 may drive share price higher towards the next resistances at RM1.32-1.44 with long term target at RM1.69.

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market pulse
Market Pulse

Still cautious amid political developments

The FBM KLCI marched higher yesterday as investors as there were no changes in
the political agenda in Malaysia. Although the unemployment rate recorded at 4.7%
in August 2020 (unchanged from previous month), the number of unemployed
person decreased by 3,500, suggesting that the labour market is recovering (albeit
gradually). Meanwhile, the continuous rotational play amongst the lower liners
provided further room for upsides over the near term.

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market pulse
Market Pulse

Dragged down by profit taking

Expectedly, the FBM KLCI staged a pullback as investors opted to lock in recent gains following a two-day of rally. At the same time, the rising number of Covid-19
cases triggered the re-implementation of conditional movement control order
(CMCO) in Selangor, Kuala Lumpur and Putrajaya may deter the pace of economic recovery. Still, the vibrant trading activities will continue to provide rotational play amongst the lower liners, capitalising on the firmer momentum in recent times.

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macquarie structured warrants 20200914
Macquarie Warrants

Higher warrants turnover for the week; glove makers still in focus

Besides that, call warrant TOPGLOV-C81 landed on third place last week with a total 94.7mil units traded. The December 2020 expiry call warrant was also the top warrant traded by value with a total traded value of RM62.0mil. Other than warrants over glove makers, the index warrants close to expiry HSI-HAY and HSI-C9V

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M+ Wiz

Healthcare Stocks Back in Action

We noted that last week was not a good week for healthcare stocks as they underwent some consolidation phase, but it gives us the opportunity to look out for the breakout formation in the near term (as they are still in the uptrend intact position). Bursa Exchange was also mixed with the laggards and leaders being on a neutral tone.

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Stock Digest

AME Elite Consortium Bhd – 12th Oct 20

AME Elite Consortium Bhd (AME) is regarded as an industrial park specialist that involves in industrial park development, leasing of industrial properties and managed workers’ dormitories. Capitalising on trade diversion with companies relocating their manufacturing
facilities amid the on-going US-China trade war. Property investment & management services segment provide sustainable long term earnings visibility. We initiate coverage on AME with a BUY call and fair value of RM2.29, based on 13.0x P/E pegged to its forward FY22f EPS of 17.6 sen.

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technical focus
Technical Focus

Technical Focus – 12th Oct 20

One of the leading regional retailers of cosmetics and personal care (“CPC”) products, under the brand – The Body Shop and Natura. Operates a total of 121 retail stores across West Malaysia, Sabah, Labuan, Vietnam
and Cambodia with products also sold via selected third-party online stores such as Hermo, Tiki, Lazada and Shopee. Surge in e-commerce channel will continue to cushion the weakness from the retail stores channel over the foreseeable future. Technically, a flag-formation breakout above RM0.44 suggests for further upside that may drive share price towards the next resistances at RM0.475-0.495 with long term target at RM0.505.

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market pulse
Market Pulse

Still on the hunt

After two consecutive days of rally (FBM KLCI rallied approximately 40 pts), we reckon that a consolidation may take place at the start of the week as investors
would digest recent gains. In the meantime, the recent aggressive move may also tone down in view of the political instability in coming days. On a brighter note, the positive market breadth, coupled with the strong trading volumes in recent days
suggests that investors’ appetite remain within the equities market in search for higher yields.

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market pulse
Market Pulse

Boosted by eleventh hour buying

The eleventh hour buying support that sent the FBM KLCI sharply higher yesterday may warrant a consolidation as investors would opt to digest their gains. The move would come ahead of the political uncertainty next week amid the impending meeting between opposition leader, Datuk Seri Anwar Ibrahim with Yang di-Pertuan Agong. Meanwhile, we continue to see rotational play amongst the lower liners owing to the vibrant trading activities.

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market pulse
Market Pulse

Bargain hunting may emerge

The eleventh hour sharp selling pressure in selected index heavyweights sent the local bourse spiraling lower yesterday. After the previous session slump, we think that bargain hunting activities may emerge on the local bourse as investors nibble on beaten down stocks. It was a tale of two sides as the lower liners managed to march higher on the back of the rotational play, coupled with the favourable market sentiment.

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technical focus
Technical Focus

Technical Focus – 7th Oct 20

Focused on delivering complete and customisable payment solution to key partners across various industries such as AmBank, Affin Bank, Visa, MasterCard, MEPS, Petronas, Taobao.com, Touch ’n Go and Giant. Capitalising on the rising adoption of e-payment nationwide, whilst the Covid-19 pandemic has sped up adoption for QR payments in order to minimise contact. Acquisition of 40.0% equity stake in artificial intelligence (AI) company Wannatalk Malaysia Sdn Bhd value-add into the business to business to consumer (B2B2C) solution. Technically, a trendline breakout above RM1.18 may drive share price higher towards the next resistances at RM1.27-1.30 with long term target at RM1.40.

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market pulse
Market Pulse

Knee jerk retreat

The knee-jerk reaction selldown was due to the projected number of Covid-19 cases at end-October 2020 by the health director-general Tan Sri Dr Noor Hisham Abdullah. Nevertheless, speculations over MCO 2.0 have been quashed by the Prime Minister’s latest announcement may provide some alleviation to the selldown. The lower liners and broader market shares have turned downbeat which may see any gains to be tempered by quick profit taking over the near term amid the rising cases of Covid-19.

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Market Chat

Embrace the winter – with gloves and healthcare stocks

Although economy is likely to contract in 2020, we think several stimulus measures across the globe should be able to cushion the downside risk and market players are expecting a recovery in 2021; similar case for Malaysia. For local exchange, we opine the trading activities will hover around gloves and related proxies and healthcare stocks without any meaningful drop in Covid-19
cases. Besides, trade diversions and trade catalyst should turn out well for 4Q20. We have picked CAREPLS, ESCERAM, DNONCE, PECCA, TOMYPAK, AME and WEGMANS for this quarter.

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Stock Digest

Teo Seng Capital Bhd – 6th Oct 20

Moving forward, TSCB aims to ramp-up their promotional activities in order to maintain and increase their market share. At the same time, TSCB is strengthening
their downstream business by introducing new products such as hard-boiled eggs, soft-boiled eggs and herbal eggs in order to diversify their products base.

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