Review & Outlook

Stocks rebounded on Thursday, as investors returned to bargain hunt transport, utility and oil & gas heavyweights on economic recovery optimism. The FBM KLCI rose 7.09 points to close at 1,629.18, off an opening low of 1,620.66 and high of 1,632.79, as gainers led losers 732 to 521 on robust trade totalling 6.16bn shares worth RM4.68bn.

The local market should stage profit-taking correction ahead of the weekend, following the overnight US correction on uncertainty over the path ahead for U.S. interest rates. Immediate index resistance stays at 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend support remains at 1,600, with 1,589, 1,572 and 1,543, the respective rising 30-day, 50-day and 100-day moving averages, acting as strong supports.

Globetronics need to overcome the 50-day ma (RM1.33) to enhance upside potential towards the 50%FR (RM1.41), with next hurdle coming from the 61.8%FR (RM1.51), and downside cushioned by the 23.6%FR (RM1.19). Inari will need confirmed breakout above the 22/2/24 high (RM3.35) to fuel further upside momentum and aim for the 123.6%FP (RM3.63) and 138.2%FP (RM3.80) going forward, while the 200-day ma (RM3.04) cushions downside.

News Bites

• YTL Power International Bhd posted a 34.5% year-on-year increase in net profit for its 3QFY2024, mainly driven by its power generation and investment holding segment

• YTL Corp Bhd posted a 19.8% increase in net profit for its 3QFY2024, as all of its business segments, ie. construction, cement and building materials, property investment and development, management services and others, hotels, and utilities, reported higher earnings.

• Sime Darby Property Bhd will build and lease out a hyperscale data centre at its Elmina Business Park in a deal worth RM2bn, marking the group's entry into the data centre segment.

• Malakoff Corp Bhd is acquiring a 51% equity interest in ZEC Solar Sdn Bhd and a 49% stake in TJZ Suria Sdn Bhd from Zelleco Engineering Sdn Bhd for Zelleco Engineering Sdn Bhd for RM27mn.

• Axis Real Estate Investment Trust (Axis-REIT) is acquiring two properties in Selangor from Cycle & Carriage Bintang Bhd for a combined value of RM125mn.

• KLCCP Stapled Group's net profit for the 1QFY2024 rose to RM188.0mn from RM180.6mn in the same quarter a year ago. Revenue increased 7.4% to RM408.9mn from RM380.7mn previously, underpinned by the continued growth across all its business segments

• IDRB-Hicom Bhd's net profit for the 1QFY2024 dropped 15.2% to RM91.5mn no thanks to higher taxation charges.

• British American Tobacco (Malaysia) Bhd posted a 34.5% YoY lower net profit for the 1QFY2024, dragged down by higher operating expenses due to ongoing investments as the tobacco group transitions towards a multicategory business

• MSM Malaysia Holdings Bhd reported its second consecutive quarter of net profit as better selling prices and utilitisation offset higher production costs. Net profit for the 1QFY2024 was RM41.7mn compared to a net loss of RM35.9mn in the same period last year.

• Samaiden Group Bhd's growth prospects are boosted by government initiatives such as the Corporate Green Power Programme, the launch of the fifth large-scale solar programme, and the Green Electricity Tariff programme.

• HSS Engineers Bhd said its net profit for the 1QFY2024 improved to RM4.4mn from RM4.2mn in the previous corresponding quarter, mainly contributed from project management and construction supervision projects.

• In the lead-up to implementing targeted subsidies, including for fuel, the Malaysian government is fine-tuning the mechanism to ensure that it gets it right and the subsidies end up serving the right groups.

• Singapore's economy grew 2.7% YoY in the first quarter of 2024. The government said it expected manufacturing and trade-related sectors to improve over the course of 2024.

• US initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 215,000 for the week ended May 18, the Labor Department said on Thursday.

• Some of the steep US tariff increases on an array of Chinese imports, including electric vehicles (EVs) and their batteries, computer chips and medical products, will take effect on Aug 1, the US Trade Representative's (USTR) office said on Wednesday.

Source: TA Research - 24 May 2024