Review & Outlook

Bursa Malaysia shares rose on Monday, copying regional gains as a sharp slowdown in US jobs growth and services sector activity raised optimism for interest rate cuts by the end of this year. The FBM KLCI gained 7.8 points to close at 1,597.39, off an early low of 1,591.17 and high of 1,598.29, as gainers led losers 657 to 447 on robust trade totalling 4.48bn shares worth RM3.12bn.

The local market should mirror performance in the region as hopes for US rate cuts towards the year-end improve investor sentiment and encourage foreign fund buying. Immediate resistance for the index remains at 1,600, with stronger upside hurdles seen at 1,620 and then 1,640. Key supports will be at 1,559, 1,548 and 1,525, the respective rising 30-day, 50-day and 100-day moving averages.

SKP Resources will need breakout confirmation above the 50%FR (RM1.19) to enhance upward momentum towards the 38.2%FR (RM1.32) and 23.6%FR (RM1.47) ahead, while the 76.4%FR (91sen) provide strong retracement support. VS Inds need sustained strength above the 61.8%FR (96sen) to boost upside potential towards the 76.4%FR (RM1.02), with the next major hurdle seen from the 18/8/22 high (RM1.11), while the 200-day moving average (87sen) and 38.2%FR (86sen) will act to cushion downside.

News Bites

• The Ministry of Energy Transition and Water Transformation has come up with the affordable "Solar BOLEH!" programme to enable more people to adopt solar energy by installing solar panels in their homes, said Deputy Prime Minister Datuk Seri Fadillah Yusof.
   
• The Edge Communications Sdn Bhd and its owner Tan Sri Tong Kooi Ong have ceased to be substantial shareholders in Star Media Group Bhd following the latest share sale.
   
• Ho Hup Construction Co Bhd's RM1bn mixed development project in Bukit Jalil will be suspended as it plans to sell the project's 3.09-acre land for RM110mn cash to repay bank borrowings, refund existing end purchasers of the project's Sovo units, and pay consultants and the contractor.
   
• Favelle Favco Bhd has secured four contracts for the supply of offshore and tower cranes totaling RM39.2mn.
   
• KKB Engineering Bhd has secured two contracts worth a combined total of RM37.9mn, to build and maintain liquefied petroleum cylinders for Petronas Dagangan Bhd for one year.
   
• Loss-making Niche Capital Emas Holdings Bhd has proposed to undertake a private placement of up to 135.7mn shares, or 10% of its issued share capital, to fund its mining business as well as working capital.
   
• Sunzen Biotech Bhd has proposed to acquire a 70% stake in Eye Nation Medical Sdn Bhd for RM6.4mn.
   
• Logistic services provider Sin-Kung Logistics Bhd, which is set to be listed on the ACE Market of Bursa Malaysia on May 15, said its initial public offering, priced at 13 sen apiece, had been oversubscribed by 26.5 times.
   
• PN17 company Ireka Corp Bhd said its wholly-owned Ireka Development (Terengganu) Sdn Bhd and the unit's directors are being sued by the Employee Provident Fund over unpaid contributions to the fund.
   
• Malaysian Genomics Resource Centre Bhd's wholly-owned subsidiary MGRC Therapeutics Sdn Bhd has entered into a MOU with Twistcode Technologies Sdn Bhd to focus on growing the bioinformatics enhancedaccelerated services terminal across Malaysia and the Middle East.
   
• RHB Bank Bhd said it has appointed Mohd Najman Isa as the new chief executive officer and chief investment officer of RHB Islamic International Asset Management Bhd.
   
• Seng Fong Holdings Bhd's net profit jumped more than threefold in its third quarter to RM15.1mn, thanks to higher sales volume and average selling prices.
   
• Indonesia's economy grew by 5.11% on a yearly basis in the first quarter, the highest growth rate in three quarters, buoyed by high public spending for the country's elections.
   
• The euro area private sector growth, the HCOB composite output index rose to an 11-month high of 51.7 in April from 50.3 in the previous month, driven by the service sector, final survey results from S&P Global showed on Monday.
   
• The case for a European Central Bank interest rate cut in June is getting stronger as services inflation is finally starting to ease, ECB chief economist Philip Lane told Spanish newspaper El Confidencial on Monday.

Source: TA Research - 7 May 2024