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Technical Focus – 9th Nov 20

We reckon that gloves-related stocks will retain their position as favourites amongst investors following the tabling of Budget 2021. Investors will breathe a sigh of relief as the possibility of implementation of windfall tax did not materialise. Instead, glove manufacturers will collectively voluntary contribute a combined sum of RM500.0m to combat against Covid-19, which includes partially covering the cost of the Covid-19 vaccine as well as expenses for healthcare equipment. Meanwhile, we expect demand to remain relatively robust in subsequent quarters owing to the pent-up demand that has yet abated alongside with the rising average selling prices (ASP)
technical focus

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Serba Dinamik Holdings Berhad

The latest win is a testament of Serba Dinamik’s position as one of the major
players in the oil & gas industry. Assuming a burn rate of approximately RM400.0m
in December 2020, Serba Dinamik’s outstanding orderbook will come at RM18.3bn
by end-2020; within our assumption of RM18.5bn.

market pulse

Commendable breakthrough

The FBM KLCI delivered another commendable performance amid optimism that
Malaysia economy is widely touted to emerge from the Covid-19 pandemic slump
following the recent progress of Covid-19 vaccine developments. Still, we reckon
that the strong upsides may also attract quick profit taking activities over the
interim. At the same time, the lower liners are set for the extended rally that is
largely driven by the ample of liquidity as investors continue to seek for higher
yields investments.

market pulse

Market momentum still sturdy

The FBM KLCI edged mildly lower as sentiment turned downbeat as investors booked in gains from the previous session rally. While the local bourse is demonstrating some mild weakness, we reckon that the general recovery trend is still intact as the attention remains focus on the pace of economic recovery. The positive development over the Covid-19 vaccine will also continue to aid the recovery progress. Meanwhile, the lower liners are expected to charge higher, driven by the ample liquidity with the equities market remain in favour.

AME Elite Consortium Bhd – 2nd Dec 20

The proposed AME REIT would also provide stable and recurring income to investors, with at least 90.0% of its income to be distributed as dividends to unitholders. We note that slightly more than half of the current tenants of the industrial properties has more than 5 years of lease under their agreements. Additionally, AME REIT is expected to benefit from lower tax rate compared to prevailing corporate tax rate at an average of 23.4% recorded over the past 4 years.

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