Review & Outlook

The local market extended falls on Thursday, again led by technology, utility and oil & gas stocks, with fresh worries over US economic growth and weak oil prices dampening investor sentiment. The FBM KLCI fell another 5.42 points to close at 1,664.82, off an early high of 1,677.46 and low of 1,663.18, as losers beat gainers 796 to 323 on higher turnover of 3.3bn shares worth RM3.43bn.

The current market drift-down should prevail as investors remain defensive given the weak economic cues from China and the US, and as the market await the upcoming US jobless claims and unemployment data for further leads. Immediate index support remains at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Key resistance will be the recent high of 1,684, then 1,695, the Dec 2020 high, followed by the 123.6%FP (1,702) and 138.2%FP (1,741) of the 1,369 low to the 1,638 high.

Further selloff on DNEX would aggravate oversold momentum and spark technical rebound ahead, with the 18/1/24 pivot low (31.5sen) and 30sen cushioning downside, and overhead resistance seen at 38sen, the 200-day ma (40sen) and 100-day ma (42sen) capping upside. Likewise, further dip on Velesto should increase potential for oversold rebound going forward, with the 5/8/24 low (18sen) and 38.2%FR (16sen) as stronger supports, and resistance from the 61.8%FR (22sen) and 200-day ma (25sen) seen to stall upside.

News Bites

• Malaysia's central bank on Thursday left the benchmark interest rate unchanged at 3% as widely expected, drawing comfort from sustained economic expansion and benign inflation.

• Prime Minister Datuk Seri Anwar Ibrahim said on Thursday that the government had never discussed the return of the goods and services tax as an alternative to subsidy cuts.

• Prime Minister Anwar Ibrahim said on Thursday the country will not stop its oil and gas exploration in the South China Sea despite claims by Beijing that Malaysia was infringing on its territory.

• PPB Group Bhd is optimistic about its 2H2024 outlook, saying that the strengthening of the ringgit against the US dollar could lead to higher consumer spending and reduced raw materials cost.

• Binastra Corp Bhd has received a RM283.3mn contract for the main building works of a major residential development in Taman Desa, Kuala Lumpur from Kaisar Maxim Sdn Bhd.

• Inta Bina Group Bhd has secured another construction contract from Sime Darby Property Bhd worth RM96.6mn to undertake main building and construction works for a 37-storey serviced apartment project in Putra Heights.

• Systech Bhd has teamed up with Pinetop Technology Venture Sdn Bhd to establish and operate data centres for an initial term of two years.

• Steel Hawk Bhd is bidding for more long-term Petroliam Nasional Bhd contracts and expanding its renewable energy business.

• CN Asia Corp Bhd has signed a framework agreement with Jianghe Electromechanical Equipment Engineering Co Ltd to explore and invest in Malaysia's wind energy sector.

• Sentoria Group Bhd said Messrs Grant Thornton Malaysia PLT has voluntarily resigned as the company's external auditor.

• Kerjaya Prospek Property Bhd chief executive officer Joanne Lee Sor Phaik has stepped down from her position after just over a year in her role.

• Zou Lan, head of the People's Bank of China's monetary policy department said the central bank would watch developing economic trends before making any adjustments to its average reserve requirement ratio.

• The Bank of Japan will continue to roll back decades of easy policy settings if economic data develop in line with its forecasts, a policy board member said.

• Private payrolls in the US increased by 99,000 jobs this month, the smallest gain since January 2021, after rising by a downwardly revised 111,000 in July, the ADP National Employment Report showed.

Source: TA Research - 6 Sept 2024