Review & Outlook

Due to fresh sell signals on the daily slow stochastics momentum and MACD trend indicators on the FBM KLCI sparked by last Friday's selloff, further downward profit-taking correction is on the cards this week. Nevertheless, investors should look at any further sharp falls as good opportunities to bargain hunt on weakness for oversold rebound upside ahead. Meantime, with fears of a weakening ringgit dissipating following the assurance from the country's Second Finance Minister of market intervention to stall or reverse the local currency's depreciating trend, jittery investor sentiments should be pacified.

Stronger index supports cushioning downside on further profit-taking pullbacks will be at 1,525, 1,510 and 1,486, the respective 30-day, 50-day and 100-day moving averages. Immediate resistance will be from the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

As for stocks picks this week, selected banking, construction, and rubber glove counters such as AMBank, CIMB, Maybank, Gamuda, Hartalega, Kossan Rubber, Supermax and Top Glove should attract bargain hunters looking for potential rotational and laggard plays for recovery going forward.

News Bites

• Malaysia's manufacturing sector continued its recovery path, with the seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index rising to 49.5 in February, up from 49.0 in January.

• Hibiscus Petroleum Bhd plans to write off RM27mn in capital cost estimates for its South Furious Merah exploration well, after an initial assessment found that the hydrocarbon volumes seen in the well may not achieve commercially viable economic thresholds.

• Sapura Energy Bhd said a Mexican unit of the group has been declared bankrupt, after it had failed to restructure its debts with creditors within the stipulated time frame given by a court in that country.

• Tenaga Nasional Bhd spent RM12bn last year on various expenses, with 50% or RM6bn allocated for Bumiputera companies or vendors.

• Pekat Group Bhd is selling an industrial freehold land, measuring 12,813.9m2, for RM21mn cash, with proceeds from the sale to be used for working capital.

• Focus Point Holdings Bhd's wholly-owned subsidiary, Focus Point Vision Care Group Sdn Bhd has formed a strategic partnership with ISEC Sdn Bhd to enhance patient care experience.

• JAKS Resources Bhd is looking to raise up to RM53.2mn through a private placement mainly to repay its credit facilities and fund its working capital.

• KUB Malaysia Bhd's wholly owned subsidiary KUB Agro Holdings Sdn Bhd is acquiring the remaining 40% equity interest in KUB Sepadu Sdn Bhd not in its control from Medan Sepadu Sdn Bhd and Lembaga Amanah Kebajikan Kaum Melanau Sarawak for RM60mn.

• Priceworth International Bhd said its subsidiary has been appointed as a distributor of bus products by China's second largest bus manufacturer Higer Bus Company Ltd.

• Having missed the 29 February 2024 deadline to release its 4QFY23 results, Country Heights Holdings Bhd is likely to be slapped with a trading suspension on 8 March 2024.

• Kumpulan Jetson Bhd has initiated a legal action against requisitionists of a failed attempt to call for an extraordinary general meeting to remove the entire board of directors of the construction group.

• Fertility care company Alpha IVF Group Bhd on 1 March 2024 began taking orders from investors for its initial public offering to raise up to RM466.5mn.

• Datuk Megat Jalaluddin Megat Hassan begin his duty on 1 March 2024 as Tenaga Nasional Bhd's new president and CEO for the next two years.

• China's Housing Ministry said more than 200bn yuan of bank loans had been approved for property projects, the latest indication that lenders are heeding the government's push to support the embattled real estate market.

• The US consumer sentiment index declined to 76.9 from a preliminary reading of 79.6, according to the final February survey from the University of Michigan.

• The US Congress approved temporary funding to avert a Saturday partial US government shutdown, sending the bill to President Joe Biden for his signature.

Source: TA Research - 4 Mar 2024