Review & Outlook

Blue chips rose on Wednesday, mirroring regional gains as stronger economic data and optimism for rate cuts after the US Federal Reserve Chairman signalled easing inflation boosted market sentiment. The FBM KLCI climbed 17.36 points, or 1.1% to end at the day's high of 1,615.32, off an opening low of 1,599.60, as gainers swarmed losers 902 to 326 on total turnover of 5.47bn shares worth RM3.99bn.

The local market should copy regional strength as improving economic data and increased hopes for interest rate cuts with the US Fed chief cueing slowing inflation ahead lift sentiment. Immediate index resistance remains at the early June high of 1,622, with the May high of 1,632 and 1,640 as tougher upside hurdles, while stronger supports are at 1,568, the 100-day moving average level, followed by 1,550.

Bumi Armada shares will need convincing breakout above the 76.4%FR (63sen) to boost upside momentum and target the 7/3/23 high (73sen), with next major hurdle at the 123.6%FP (83sen), while the 50%FR (52sen) cushions downside. Dialog need to break above the upper Bollinger band (RM2.59) to enhance upside potential and aim for the 25/1/23 high (RM2.73), with next upside hurdle at the 123.6%FP (RM2.97), and uptrend support from the rising 100-day ma (RM2.30).

News Bites

• Jati Tinggi Group Bhd has secured a RM20.1mn contract to undertake the installation of 33kV underground cables in the southern region of Peninsular Malaysia.

• Mah Sing Group Bhd is acquiring land in Taman Desa, Kuala Lumpur for RM108mn which will be developed into serviced apartments and affordable housing units.

• Siab Holdings Bhd has bagged a RM176.2mn contract from property developer Exsim Noordin Sdn Bhd to build a heritage building and a 29-storey serviced apartment building in George Town, Penang.

• Naim Holdings Bhd is disposing of an 180.8-hectare mixed-zone vacant land by its wholly-owned subsidiary, Naim Land Sdn Bhd, in Samarahan, Sarawak, to Onlyee Flora Sdn Bhd for RM223.4mn.

• Greatech Technology Bhd has proposed a one-for-one bonus issue, entailing the issuance of up to 1.3bn new shares.

• WCT Holdings Bhd has proposed to establish a real estate investment trust comprising its retail properties, and list it on the Main Market of Bursa Malaysia.

• Global Infrastructure Partners has expressed its willingness to be a minority shareholder in Malaysia Airports Holdings Bhd and to relinquish its shareholding within a short time frame, said Finance Minister II Datuk Seri Amir Hamzah Azizan.

• Synergy House Global Sdn Bhd, a full subsidiary of Synergy House Bhd, has been selected by American eCommerce firm Wayfair LLC as the latter's authorised service provider in Malaysia.

• Computer Forms (Malaysia) Bhd said a fire broke out at its factory located at the PKNS Setapak Industrial Area, off Jalan Genting Kelang, Kuala Lumpur on July 2 and it has yet to ascertain the full financial and operational impact due to the damage caused by the fire.

• Minetech Resources Bhd has accepted a letter of award from Mah Sing Group Bhd to undertake the upgrading and construction of external road and drainage works for the latter's M Nova development in Kuala Lumpur, worth RM16.1mn.

• PLUS Malaysia Bhd and Petronas Dagangan Bhd are collaborating to develop the country's first commercial hybrid stations - Hybrid Super Station - along national highways, with the Klang Valley identified as the pilot location.

• MyEG Services Bhd is teaming up with credit reporting agency Credit Bureau Malaysia Sdn Bhd to offer a self-check service for individual credit reports.

• YLI Holdings Bhd has proposed to acquire 80% equity interest in Damini Corporation Sdn Bhd for a purchase consideration of RM10mn.

• The services sector in China continued to expand in June, although at a slower pace, the latest survey from Caixin showed on Wednesday with a service PMI score of 51.2, down from 54.0 in May.

• Federal Reserve officials said they were awaiting additional evidence that inflation is cooling and were divided on how long to keep interest rates elevated at their last policy meeting.

• The Institute for Supply Management's composite gauge of services slumped 5 points to 48.8.

Source: TA Research - 4 Jul 2024