Review & Outlook

Last week's shallow profit-taking dips looks constructive, as the evidently weaker selling momentum suggests underlying buying interest remained strong and able to support further gains ahead. More robust buying momentum this week will confirm the current uptrend to extend, with increasing optimism for further interest rate cuts by the US Federal Reserve by the year-end to reinforce upside momentum.

Immediate index resistance is retained at the recent May high of 1,632, with 1,640 and 1,660 as tougher upside hurdles, while immediate supports are at 1,605, 1,597 and 1,573, the respective steadily rising 30-day, 50-day and 100-day moving average levels.

As for stock picks this coming week, selective construction, gaming, oil & gas and rubber glove related counters should continue to attract investors looking to bargain hunt on weakness for recovery ahead, given the strong situational interest in data centre, tourism and strengthening ringgit plays.

News Bites

• Malaysia's Industrial Production Index recorded a moderate YoY increase of 2.4% in May 2024 versus 6.1% YoY in April 2024.

• The Employees Provident Fund emerged as a substantial shareholder in Johor Plantations Group Bhd on 9 July 2024, through Citigroup Nominees (Tempatan) Sdn Bhd, which bought 222.2mn shares, or an 8.9% stake in the company.

• REDtone Digital Bhd has acquired a total of 8.4mn shares, representing a 7.1% stake in Theta Edge Bhd, from the open market for about RM13.9mn, cash.

• Kimlun Corporation Bhd is forming a joint venture company with Singapore-listed Astaka Holdings Ltd's indirect 51.0%-owned unit Astaka Capital Sdn Bhd to develop a residential serviced apartment project in Johor Bahru.

• Uzma Bhd's 51.0% owned subsidiary Jannatul Firdaus International Sdn Bhd has entered into an expression of interest with Arafura Energies Ltd and Australian Niugini Service for the sale and purchase of hydrocarbon fuel and products.

• JAKS Resources Bhd has partnered with Shanghai-based China Power Engineering Consulting Group International Engineering Co Ltd to bid for the development of solar photovoltaic plants with a maximum aggregate capacity of 500MWac, under the Energy Commission's LSS5 programme.

• KNM Group Bhd has been granted a second extension until 30 October 2024 to submit its PN17 regularisation plan from the earlier deadline of 30 April 2024.

• Nestcon Bhd aims to raise RM27.3mn through a private placement of 70.8mn shares or 10.0% of its enlarged share base.

• Tafi Industries Bhd has secured a contract worth RM207.5mn from Armani KPF2 Development Sdn Bhd for the overall development and construction of service apartments, SOHO and commercial spaces in Setia Alam, Selangor.

• Minetech Resources Bhd has secured a RM4.1mn contract from VED Engineers Sdn Bhd to carry out road and drainage construction for Banting Industrial City.

• Radiant Globaltech Bhd is acquiring an 80.0% stake in IT solutions provider Rymnet Solutions Sdn Bhd, for RM52.5mn, from its chief executive officer and major shareholder Un Sze Hau.

• Toyo Ventures Holdings Bhd said that the US$980.0mn financing facility it secured from i-Power Solutions Pte Ltd for the Song Hau 2 thermal power plant project is no longer applicable.

• EVD Bhd has reinstated its chief executive officer and major shareholder Mah Seong Huak, whom it had suspended for the past 6 months, following what appears to be the conclusion of a boardroom tussle.

• China's exports grew 8.6% YoY in June but imports fell 2.3% YoY.

• The US producer price index for final demand rose 0.2% last month after being unchanged in May.

• The former US president Donald Trump survived an assassination attempt at a Pennsylvania rally last Saturday.

Source: TA Research - 15 Jul 2024