Review & Outlook

The local blue-chip benchmark fell on Wednesday, with banking heavyweights leading losses on worries the US Federal Reserve may opt to keep interest rates at current levels longer to contain inflation. The FBM KLCI slid another 9.17 points to end near session lows at 1,535.79, off an opening high of 1,546, as gainers matched losers 509 to 509 on slower trade totalling 3.81bn shares worth RM2.65bn.

Stocks should bounce back following the Wall Street overnight rally to records as the US central bank cued for 3 interest rate cuts before the end of this year. Immediate index resistance remains at the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level. Stronger supports cushioning downside are at 1,523 and 1,499, the respective rising 50-day and 100-day moving averages.

Genting Berhad need confirmed breakout above the RM5.10 recent high to extend recovery towards RM5.40, with next hurdles at the 123.6%FP (RM5.60) and 138.2%FP (RM5.95) ahead, while the rising 100-day ma (RM4.56) provide uptrend support. Genting Malaysia will require decisive breakout above the 19/3/21 high (RM2.87) to fuel uptrend momentum towards RM3.00, with tougher hurdles at 123.6%FP (RM3.15) and 138.2%FP (RM3.33) going forward, while uptrend support also come from the rising 100-day ma (RM2.62).

News Bites

• Bank Negara Malaysia is projecting Malaysia's GDP to expand between 4% and 5% in 2024, versus 3.7% in 2023, driven mainly by resilient domestic expenditure and an expected recovery in exports. It forecasts consumer price index to rise 2%-3.5% in 2024 from 2.5% in 2023.

• Yinson Holdings Bhd has proposed a private placement of 120.0mn new shares at RM2.36/share to raise RM283.2mn to expand its renewable energy and green technology business.

• The Fyne Field oil field development licence for Hibiscus Petroleum Bhd's unit has been extended by 30 months by the UK's North Sea Transition Authority.

• Kelington Group Bhd's unit has inked a land lease agreement with the Terengganu State Economic Development Corporation in a move to support the group's expansion in the liquid carbon dioxide manufacturing segment.

• Master Tec Group Bhd's recent sharp rise in its share price has led to Bursa Malaysia issuing an unusual market activity query.

• Apollo Food Holdings Bhd has yet to formulate a rectification plan to address the shortfall in its public shareholding spread as it has until 23 July 2024 to comply with the 25% spread requirement.

• FM Global Logistics Holdings Bhd is buying 2 more plots of freehold land totalling 5.7 acres in the Setia Alaman Industrial Park, Klang, from property developer Petaling Garden Sdn Bhd for RM37.7mn, cash, or RM153/sf.

• SCGM Bhd's is proposing to acquire Eramas Global Group Sdn Bhd as part of its overall regularisation plan to regularise its condition as a cash company.

• Johor-based vegetable wholesaler Farm Price Holdings Bhd has secured regulatory approval for its listing on the ACE Market of Bursa Malaysia.

• Top Glove Corporation Bhd's net loss for 2QFY24 narrowed to RM51.2mn from RM164.7mn a year earlier, fuelled by stronger sales volume growth, as customers placed new orders following the depletion of excess inventory.

• Eco World International Bhd returned to the black with a net profit of RM182.0k for the 1QFY24 compared to a net loss of RM30.8mn a year ago.

• Scientex Packaging (Ayer Keroh) Bhd's 2QFY24 net profit shrank 40.1% YoY to RM8.0mn while quarterly revenue fell 11.2% YoY to RM175.8mn.

• China kept its one-year loan prime rate and the five-year rate at 3.45% and 3.95%, respectively.

• The US Federal Reserve maintained its policy rate at 5.25% to 5.50% and its outlook for three interest-rate cuts this year.

• The European Central Bank can't commit to further reductions in borrowing costs after a likely first move in June, according to president Christine Lagarde.

Source: TA Research - 21 Mar 2024