Review & Outlook

The local market staged a mild rebound on Thursday, encouraged by the congressional testimony by Federal Reserve Chairman that US interest rates will likely be reduced this year if inflation slows further. The FBM KLCI gained 4.32 points to close at 1,535.83, off an opening low of 1,531.7 and high of 1,539.6, as gainers led losers 546 to 452 on steady turnover of 3.55bn shares worth RM2.6bn.

Stocks should end within recent trading ranges ahead of the weekend, barring fresh local catalysts which is key to lift the market from current consolidation. Stronger index supports cushioning downside on further profit-taking pullbacks will be at 1,527, 1,513 and 1,490, 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.

Supermax appear attractive to bargain at current levels, with downside cushioned by chart supports at 80sen and 75sen, while a rebound above the 100-day ma (90sen) will be key to sustain further upside towards 95sen and RM1.04 prior to profit-taking correction. Any further dip on Top Glove towards better supports at 75sen/70sen should attract buyers looking for rebound upside, with a climb above the 100-day ma (85sen) to aim for 94sen and RM1.02 going forward.

News Bites

• Malaysia's central bank on Thursday kept the benchmark interest rate unchanged at 3.0%, as widely expected, citing improving economic growth and moderating inflation.

• Malaysia's international reserves fell nearly 1% to US$114.3bn as of Feb 29 from a fortnight earlier and is sufficient to finance 5.4 months of imports of goods and services and is one time the total short-term external debt.

• Lotte Chemical Titan Holding Bhd said its parent company Lotte Chemical Corporation is considering various "strategic measures" in relation to the Malaysian unit, after the Korea Economic Daily reported that the latter had embarked on the process of selling its shareholding in the former.

• Defence Minister Datuk Seri Mohamed Khaled Nordin said the Armed Forces Fund Board intends to continue holding a significant stake in Affin Bank Bhd, with the expectation of benefitting from potential value increases brought by new investors.

• The legal dispute between Star Media Group Bhd and JAKS Resources Bhd on the development of a parcel of land in Section 13, Petaling Jaya, has been reverted to the High Court for trial on Aug 25, 2025.

• Gamuda Bhd is deepening its commitment to digitalising and redefining the construction landscape with generative artificial intelligence through an expanded collaboration with Google Cloud.

• Malayan United Industries Bhd has proposed to dispose of 65.9% stake in Pan Malaysia Holdings Bhd for RM36.7mn.

• Dagang NeXchange Bhd has signed a MoU with Korea Trade Network to work on various projects in relation to port community system, electronic customs and IT consultancy services for trade facilitation.

• Sapura Energy Bhd and its 22 wholly-owned subsidiaries have been granted new convening and restraining orders by the High Court for three months from March 11.

• Chin Hin Group Bhd has announced the third issuance of its perpetual medium-term notes of RM10.0mn in nominal value, pursuant to its perpetual MTN programme of RM500.0mn.

• PLS Plantations Bhd has entered into a memorandum of business exploration with China-based Guangzhou Jiangnan Agriculture Development Co Ltd to build a regional one-stop wholesale market in Johor for the processing and marketing of Malaysian agricultural produce.

• Tex Cycle Technology (M) Bhd has subscribed to a perpetual mediumterm note with a nominal value of RM10.0mn.

• KESM Industries Bhd recorded a net profit of RM138k for its 2QFY24, as compared with a net loss of RM720k a year earlier, on the back of higher sales generated from processing automotive chips.

• China's exports in January and February rose 7.1% YoY, beating a Reuters a poll that expected an increase of 1.9%.

• The European Central Bank left interest rates unchanged as expected on Thursday but acknowledged that inflation is easing faster than once thought, potentially opening the way for rate cuts later this year.

Source: TA Research - 8 Mar 2024