Review & Outlook

Profit-taking in plantation, telco and consumer heavyweights dragged down the blue-chip index for double-digit losses Wednesday, but the broader market extended consolidation amid lacking leads. The FBM KLCI shed 16.43 points to end at 1,538.13, off an early high of 1,544.74 and low of 1,536.76, but gainers led losers 519 to 478 on steady trade totalling 4.17bn shares worth RM2.73bn.

Stocks should ease into consolidation after recent gains encourage profit-taking, with the higher-then-expected inflation data forcing the market to reassess the timeline for US interest rate cuts. Stronger index supports cushioning downside will be at 1,531, 1,518 and 1,494, the respective rising 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.

Aemulus will need breakout confirmation above the upper Bollinger band (36sen) to extend recovery towards the 38.2%FR (41sen) and 50%FR (47sen) ahead, while downside is cushioned by the 100-day ma (30sen). Inari need sustained strength above the 61.8%FR (RM3.28) to renew upside momentum towards the 76.4%FR (RM3.55), with next hurdles from RM3.85 and the 22/11/221 high (RM4.00), while the 200-day ma (RM2.93) should limit downside risk.

News Bites

• Malaysia's wholesale-and-retail sales grew 5.4% YoY in January led by the wholesale subsector.

• Gas Malaysia Bhd's joint venture with Tokyo Gas Engineering Solutions Corp has commissioned operation of its combined heat and power plant for its third customer, Fatty Chemical (Malaysia) Sdn Bhd, in Prai, Penang.

• Tropicana Corp Bhd and Pantai Kok Resort Development Bhd have mutually agreed to terminate a 44.6-acre land development at Padang Mat Sirat, Langkawi.

• Comintel Corp Bhd's shares and warrants will be traded under its new name Binastra Corp Bhd, effective from March 15.

• Avaland Bhd's (formerly known as MCT Bhd) Casa Embun Phase 1 project in Cybersouth, which has a gross development value of RM209mn, has achieved a take-up rate of 99% since its launch in 1Q2023.

• Eversendai Corp Bhd has announced that its subsidiaries have secured new projects worth a combined RM5.4bn in Saudi Arabia, the UAE and India.

• JAG Bhd has proposed a bonus issue of 125.4mn new shares on the basis of one bonus share for every five existing shares held and a bonus issue of up to 376.1mn free warrants on the basis of three warrants for every five existing shares held.

• Mattress manufacturer Lee Swee Kiat Group Bhd is proposing a one-for-two bonus issue of up to 83.9mn new shares.

• Reservoir Link Energy Bhd via its wholly-owned subsidiary has secured a contract from PETRONAS Carigali Sdn Bhd for the provision of well leak repair equipment and services.

• Kumpulan Jetson Bhd's wholly owned unit received a notice of arbitration from its former client O&C Makok Isola Sdn Bhd in relation to an RM88mn job to build four blocks of serviced apartments in Jalan Yap Kwan Seng, Kuala Lumpur.

• Bermaz Auto Bhd's 3QFY24 net profit fell to RM70.5mn from RM87.3mn in the same quarter in the previous year and anticipates a positive performance for the remainder of FY24.

• Prolintas Infra Business Trust on Wednesday fixed the final price of its initial public offering at 95 sen per unit, unchanged from the initial price set, valuing the owner of highway concession at RM1.1bn.

• US Treasury Secretary Janet Yellen said it's "unlikely" that market interest rates will return to levels that prevailed before the Covid-19 pandemic triggered a wave of inflation and higher yields.

Source: TA Research - 14 Mar 2024