Review & Outlook

Despite the strong rebound to end with a mild loss last week, trend momentum indicators stayed bearish, signalling further potential downside volatility, especially if buying momentum and positive market breadth fail to recover substantially. Nonetheless, positive short-term technical momentum signals imply further near-term upside bias, but market players should expect keen profit-taking and selling interest to limit gains in the immediate term.

For the index, immediate supports remain at 1,550, and then the recent extreme low of 1,529, with 1,520 and 1,500 as stronger chart supports. On the upside, immediate resistance will be at 1,620, then 1,628, with the recent high of 1,638 and subsequently 1,660 acting as tougher upside hurdles.

As for stock picks this week, defensive key blue-chip banking, gaming, telco and utility counters should attract investors looking for any market weakness for cheaper buying opportunities for longer-term recovery upside.

News Bites

• Malaysia's industrial production climbed faster than expected 5.0% in June, led by higher manufacturing activities while mining output rebounded.

• Mitrajaya Holdings Bhd announced that it has secured a contract worth RM151.99mn from the Northern Corridor Implementation Authority.

• MARC Ratings warned on Friday that it may downgrade the rating of a toll concessionaire unit of Ekovest Bhd in the intermediate term, citing cash flow concerns.

• Asteel Group Bhd, through its wholly-owned subsidiary Asteel (Sarawak) Sdn Bhd, has secured a RM61.2mn contract for roof and wall cladding at the EBP1A Hyperscale Data Centre located in Elmina Business Park, Selangor.

• Straits Energy Resources Bhd plans to exit the port operation and management business by selling its entire 51% equity interest in Megah Port Management Sdn Bhd, the concessionaire of Labuan Liberty Port, to LPM Holdings Sdn Bhd for RM5mn in cash.

• MN Holdings Bhd and Reservoir Link Energy Bhd's 51%-owned subsidiary are collaborating to bid for a solar project on Pulau Tioman, initiated by Tenaga Nasional Bhd.

• Solarvest Holdings Bhd has entered into five corporate green power agreements under the Corporate Green Power Programme with a Malaysian multi-asset exchange, two global semiconductor companies, and a leading data centre service provider.

• Ranhill Utilities Bhd, now under the ownership of YTL Power International Bhd, announced the resignation of four independent directors on Friday.

• TMC Life Sciences Bhd is set to issue a notice of domestic inquiry against its suspended group CEO, Wan Nadiah Wan Mohd Abdullah Yaakob, after attempts at settlement through two show cause letters and a mediation process failed.

• Swift Haulage Bhd reported a 14.3% decline in net profit to RM8.33mn for the 2QFY24, down from RM9.72mn in the same period the previous year, due to lower profit margins.

• China's consumer prices rose more than expected 0.5% YoY in July, largely due to seasonal factors like weather, leaving intact concern over sluggish domestic demand and boosting the case for more policy support.

• Federal Reserve governor Michelle Bowman said she still sees upside risks for inflation and continued strength in the labour market, signalling she may not be ready to support an interestrate decrease when US central bankers next meet in September.

Source: TA Research - 12 Aug 2024