Review & Outlook

The blue-chip benchmark dipped for profit-taking breather a second day given overbought conditions after its recent rally to a 21-month high, with losses led by plantation, energy and utility heavyweights. The FBM KLCI fell another 6.91 points to close at 1,545.49, off an early high of 1,551.97 and low of 1,542.72, but gainers led losers 571 to 462 on total trade of 3.72bn shares worth RM2.57bn.

Stocks should extend profit-taking breather ahead of the weekend, pending fresh domestic catalysts to prop up sentiment and offset caution from recent weakness in the local currency. Key supports cushioning downside on profit-taking pullbacks will be at 1,536, 1,513 and 1,499, the respective rising 10-day, 30-day and 50-day moving averages. Immediate resistance is fixed at 1,580, with stronger upside hurdles coming at 1,600 and 1,620.

Axiata need to overcome the 38.2%FR (RM2.82) decisively to boost upside possibilities towards the 50%FR (RM3.02) and 61.8%FR (RM3.21) going forward, with the 200-day ma (RM2.55) cushioning downside risk. CelcomDigi will need convincing breakout above the 138.2%FP (RM4.51) to extend uptrend towards the 150%FP (RM4.64) and 161.8%FP (RM4.78) ahead, while the lower Bollinger band (RM4.16) cushions downside.

News Bites

• Malaysia's labour productivity posted a growth of 0.7% in the fourth quarter of 2023.

• Bank Negara's international reserves rose to US$115.4bn as at Feb 15 compared with US$114.8bn as at Jan 31.

• Ekovest Bhd is disposing of 13 parcels of land in Kuala Lumpur to Airman Sdn Bhd in a related party transaction for RM66.8mn.

• Dagang Nexchange Bhd's subsidiary Innovation Associates Consulting Sdn Bhd has secured an RM11.2mn contract from the Inland Revenue Board of Malaysia in relation to software and maintenance of IRB's Hasil Integrated Taxation Systems.

• Pecca Group Bhd's wholly-owned subsidiary, Pecca Aviation Services Sdn Bhd has entered into distribution and agency agreements with Global Component Asia Sdn Bhd.

• Pintaras Jaya Bhd has secured eight bored piling contracts worth RM170mn in Singapore.

• AirAsia, the aviation arm of Capital A Bhd, has renegotiated its plane orders with Europe's Airbus to modify about 10% or 36 planes of the over 400-plane order book, opting for A321lr instead of the initial A321neo.

• edotco Group Sdn Bhd, a 63%-owned subsidiary of Axiata Group Bhd, is seeking a buyer for its telecommunication tower business in Myanmar.

• Eastern & Oriental Bhd is in talks with banks to finalise the mechanism to raise between RM1.0bn to RM1.5bn for its Andaman Island project in Penang. It said the second development phase would require RM2.0bn in funding.

• YTL Corp Bhd's net profit for the 2QFY24 rose sixfold to RM589.2mn from RM96.9mn a year ago, lifted by stellar results from listed units YTL Power International Bhd and Malayan Cement Bhd.

• Petron Malaysia Refining & Marketing Bhd returned to black in 4QFY23 with a net profit of RM41.4mn, versus a net loss of RM21.4mn in the same period a year ago, thanks to accounting gain, as well as better fuel and refining margins.

• MSM Malaysia Holdings Bhd returned to the black with a net profit of RM42.9mn in 4QFY23, after the sugar refiner had been loss-making for eight consecutive quarters.

• TSH Resources Bhd's net profit came in lower at RM25.4mn in 4QFY23, down 42.4% against RM44.2mn a year ago amid smaller foreign exchange gain and higher taxation during the quarter under review.

• Kossan Rubber Industries Bhd posted RM806,000 net profit versus RM2.5mn net loss recorded for 4QFY22 on higher operating profit and expects the challenging operational landscape to continue throughout FY24.

• CSC Steel Holdings Bhd recorded a net profit of RM10.5mn in 4QFY23, compared with a net loss of RM347,000 in the corresponding quarter a year before that, as revenue grew.

• Duopharma Biotech Bhd's 4QFY23 net profit dropped to RM8.5mn from RM17.2mn in the previous corresponding quarter.

• New listings of foreclosed properties in China rose 48% YoY in January, compared with 37% in 2023.

• The US Labor Department said initial jobless claims fell to 201,000 in the week ended 17 February, a decrease of 12,000 from the previous week's revised level of 213,000.

Source: TA Research - 23 Feb 2024