Review & Outlook

Strong gains in banks and plantation heavyweights fuelled by foreign funds buying lifted the blue-chip benchmark closer to a four-year peak on Wednesday. The FBM KLCI surged 22.95 points, or 1.4% to close at 1,675.24, off an opening low of 1,657.77 and high of 1,681.37, but losers beat gainers 783 to 407 on better turnover of 3.95bn shares worth RM4.65bn.

Blue chips should pause for profit-taking breather following recent strong gains, given the weak broader market breadth and buying momentum as investors await further local catalysts and key US inflation data. Key index resistance will be at 1,695, the Dec 2020 high, followed by the 123.6%FP (1,702) and 138.2%FP (1,741), while immediate supports are revised to the recent correction low of 1,633, then 1,620 and 1,600 as stronger supports.

Genting Berhad needs to overcome the 50%FR (RM4.52) to promote further recovery towards the 61.8%FR (RM4.66) and 76.4%FR (RM4.83) ahead, while the 23.6%FR (RM4.21) which mirrors the selloff low, cushions downside. GENM will need convincing breakout above the 100-day ma (RM2.60) to fuel further upside momentum towards the 61.8%FR (RM2.65) and 76.4%FR (RM2.72) going forward, with downside seen restricted by the lower Bollinger band (RM2.42).

News Bites

• Malaysia's producer price index rose by 1.3% YoY in July.

• Citaglobal Bhd plans to team up with Tree Technologies Sdn Bhd to jointly develop a parcel of leasehold industrial land in Gebeng Industrial Estate, Pahang, into an industrial park with green elements.

• Axis Real Estate Investment Trust has proposed to acquire two adjoining pieces of land together with buildings near Port Klang for RM158.6mn.

• Dagang NeXchange Bhd has been awarded a one-year contract extension by the government to manage the National Single Window for Trade Facilitation system.

• Pertama Digital Bhd is looking to acquire a privately held system integration services and technical consultancy services provider, Kridentia Tech Sdn Bhd, in an all-shares deal.

• SkyWorld Development Bhd will pay Perbadanan PR1MA Malaysia RM32.2mn for the development rights to build 491 affordable housing units in Brickfields.

• Solar District Cooling Group Bhd aims to raise RM45.1 from its initial public offering en route to a listing on Bursa Malaysia's ACE Market on Sept 19.

• KLCCP Stapled Group Bhd said its 2QFY2024 net profit rose 5.7% to RM191.1mn from RM180.8mn a year ago, on the back of commendable performances from all businesses, especially the retail and hotel segments.

• Sunway Bhd posted a net profit of RM270.5mn for 2QFY2024, up 80.4% from RM149.4mn a year earlier, on stronger operating performance across all business segments.

• Axiata Group Bhd returned to the black in 2QFY2024 with a net profit of RM134.9mn, compared with a net loss of RM576.2mn a year earlier, contributed by strong performance from all operating companies except Link Net and Dialog.

• DRB-Hicom Bhd posted a net loss of RM17.1mn in 2QFY2024 against a net profit of RM33.7mn a year ago, mainly due to weaker financial performance in Proton Holdings Bhd and losses from Pos Malaysia Bhd.

• AirAsia X Bhd reported a 13% fall in net profit for 2QFY2024 to RM4.8mn from RM5.5mn a year earlier, on lesser travels due to the traditionally weaker travel season.

• Supermax Corp Bhd suffered its largest quarterly net loss of RM127.9mn for its 4QFY2024, hit by a write down of high price inventory at an overseas subsidiary amounting to RM72.9mn.

• IOI Properties Group Bhd's 4QFY2024 net profit surged to RM1.6bn, compared to RM235.4mn over the same period a year earlier largely due to a revaluation gain.

• Genting Plantations Bhd's net profit for the 2QFY2024 rose to RM85.1mn from RM71mn in the same period last year, driven by gains in the plantation segment.

• Farm Fresh Bhd's net profit grew fourfold to nearly RM26mn in the 1QFY2025, from RM6.4mn a year ago due to higher sales and decreased costs.

• QL Resources Bhd's net profit rose 16% YoY to RM107.4mn in 1QFY2025 mainly led by its convenience store chain business.

• IJM Corp Bhd's net profit for 1QFY2025 fell 13.7% to RM86.9mn from RM100.6mn a year earlier, dragged mainly by unrealised foreign exchange and fair value losses.

• Deputy governor Ryozo Himino said the Bank of Japan will raise interest rates if inflation moves in line with the bank's view.

Source: TA Research - 29 Aug 2024