Review & Outlook

Strong buying interest in the construction (+2.7%) and property (+2.1%) sectors on Thursday, fuelled by optimism over data centre and other infrastructure deals, buoyed local market sentiment. The FBM KLCI climbed another 4.74 points to close at 1,623.12, off an early high of 1,628.35 and low of 1,620.02, as gainers led losers 761 to 478 on higher turnover of 5.39bn shares worth RM4.41bn.

The local market undertone should remain buoyant with the construction, property and utility sectors leading gains amid optimism over data centre and infrastructure deals, and increasing hopes for more US interest rate cuts as inflation cools. Immediate index resistance is revised to the May high of 1,632, with 1,640 and 1,660 as tougher upside hurdles, while immediate supports are at 1,604, 1,596 and 1,572, the respective 30-day, 50-day and 100-day moving average levels.

Further rally on Gamuda should stall for profit-taking corrections given the extreme overbought condition, with the rising 30-day ma (RM6.58) and 50-day ma (RM6.17) to provide uptrend supports, while rallies above the 161.8%FP (RM8.19) should meet tougher hurdles at 176.4%FP (RM8.54) and 200%FP (RM9.10). Likewise, rallies on SunCon above the 138.2%FP (RM4.92) should see strong profit-taking resistance near the 150%FP (RM5.19) and 161.8%FP (RM5.46), while profit-taking pullbacks could be cushioned by the rising 30-day ma (RM3.74) and 50-day ma (RM3.48).

News Bites

• Malaysia's central bank kept the benchmark interest rate unchanged at 3%, as widely expected, amid resilient economic growth and manageable inflation.

• The share subscription agreement process with Digital Nasional Bhd is going smoothly, even though Telekom Malaysia Bhd has yet to finalise the agreement, according to Digital Minister Gobind Singh Deo.

• Hextar Capital Bhd has secured a contract from landasan Kapital (M) Sdn Bhd valued at RM97.0mn to supply materials, labour, tools and equipment for the construction of student hostels at Universiti Malaysia Kelantan in Bachok.

• Keyfield International Bhd has handed over Keyfield Helms 1, a DP2 geotechnical vessel, to Helms Geomarine Sdn Bhd to commence its charter.

• Astro Malaysia Holdings Bhd's wholly-owned subsidiaries, Astro Shaw Sdn Bhd and Measat Broadcast Network Systems Sdn Bhd, have been served with additional assessment notices by the Inland Revenue Board totalling RM734.9mn.

• BM Greentech Bhd has proposed to undertake a bonus issue of up to 172.0mn warrants on the basis of 1 warrant for every 4 existing BMG shares held by entitled shareholders.

• Shin Yang Group Bhd is injecting part of their Toyota and Lexus car dealership business in East Malaysia into Shin Yang for RM144.5mn, in a cash and share deal.

• Theta Edge Bhd has clarified that the project it secured from the Ampang Jaya Municipal Council will involve an investment cost of RM673.8mn in operating expenditure for Internet of Things technology.

• G3 Global Bhd has secured a project to develop the National Integrated Migrant Workers Dormitory for the Maldives government.

• Aneka Jaringan Holdings Bhd has won a RM53.0mn sub-contract from Grand Dynamic Builders Sdn Bhd for the execution of bored piles and precast reinforced concrete piles works of a new logistic hub located in Shah Alam.

• Asia Poly Holdings Bhd is buying a 50.0% stake in an IT engineering firm, Darwell Asia Pacific Sdn Bhd - a move to venture into telecommunications engineering and data centre support services.

• Colform Group Bhd, a Sabah-based manufacturer of steel roofing, steel cladding and other related steel products, has filed for an initial public offering on the ACE Market.

• CBH Engineering Holding Bhd, an electrical engineering service firm, filed for an initial public offering on the ACE Market to raise funds for new equipment and to free up working capital.

• U.S. initial jobless claims slid by more-than-expected to 222,000, a decrease of 17,000 from the previous week's revised level of 239,000, the Labour Department revealed.

• U.K.'s gross domestic product rose 0.4% MoM in May after the flat reading in April, the Office for National Statistics said on Thursday, a sign of the strength that the new Labour government is counting on to fund its ambitious plans to get the nation working again.

• Global oil demand growth will slow to just under a million barrels per day this year and next, the International Energy Agency said, as Chinese consumption contracted in the second quarter due to economic problems.

Source: TA Research - 12 Jul 2024