Review & Outlook

Stocks extended profit-taking consolidation on Tuesday, with utility, property and construction counters leading falls amid lack of positive local catalysts. The FBM KLCI shed 4.28 points to close at 1,585.38, off an early high of 1,594.71 and low of 1,582.35, as losers trashed gainers 838 to 316 on higher turnover of 5.2bn shares worth RM3.7bn.

The local market should extend trading sideways to lower, with persisting profit-taking and lacking positive leads discouraging firmer trading commitments. Stronger index supports are at 1,564, the 100-day moving average level, and 1,550, while immediate resistance is at the early June high of 1,622, with the May high of 1,632 and 1,640 as tougher upside hurdles.

Further fall on Hibiscus shares should attract bargain hunters looking for recovery upside towards the 100-day ma (RM2.57), with tougher hurdles at RM2.70 and the April high (RM2.92), and stronger supports are seen at the 61.8%FR (RM2.19) and 50%FR (RM1.96). Velesto will be attractive to bargain on weakness to next key retracement support from the 61.8%FR (22sen), for recovery upside to the 100-day ma (27sen) and 28/2/24 high (31sen) ahead.

News Bites

• Malaysia's inflation rate climbed to 2% in May compared to a 1.8% hike in April.

• Kenanga Investment Bank Bhd has obtained approval from Bank Negara Malaysia to boost its ownership stake in Merchantrade Asia Sdn Bhd, Malaysia's leading money services business operator, by 15.2% to 19.94%.

• IOI Properties Group Bhd has received a proposal from its CEO and major shareholder, Lee Yeow Seng, regarding his private vehicle's successful tender for the redevelopment of Shenton House, a commercial property in Singapore valued at S$538mn.

• Keyfield International Bhd has engaged two Chinese companies to build an accommodation workboat at a cost of US$30.5mn.

• Ramssol Group Bhd has proposed to acquire a 51% stake in a Thailandbased generative artificial intelligence-powered consulting software company for RM6.93mn.

• YGL Convergence Bhd, whose share price surged to its highest level in three years on Tuesday, stated it has no knowledge of any specific reason for the unusual market activity.

• Astro Malaysia Holdings Bhd's net profit increased by 7% to RM17.0mn for 1QFY2025, up from RM15.9mn in the same period last year, due to lower net financing costs.

• TRC Synergy Bhd has secured a RM125mn contract to perform scheduled and corrective maintenance work at the Royal Malaysian Navy submarine base in Kota Kinabalu, Sabah.

• Magni-Tech Industries Bhd's 4QFY24 net profit surged +33.6% YoY to RM34.52mn, driven by a robust 36.6% increase in revenue to RM336.93mn, primarily bolstered by stronger contributions from its garment business.

• Gamuda Bhd's FY2024 net profit rose +5.5% YoY to RM235.8mn, supported by increased contributions from overseas projects.

• The US Conference Board's gauge of sentiment decreased to 100.4 in June from a downwardly revised 101.3 reading in May.

Source: TA Research - 26 Jun 2024