Review & Outlook

Blue chips rebounded on Tuesday, with financial and plantation heavyweights leading gains on foreign fund buying while the broader market extended consolidation. The FBM KLCI ended 8.86 points up at 1,660.35, ranging between early high of 1,661.09 and low of 1,649.53, as losers edged gainers 501 to 479 on slower trade of 3.05bn shares worth RM3.78bn.

The local market should trade sideways amid caution over upcoming US inflation data and interest rate cut, as sustained foreign interest on banking stocks cushion downside. 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.

AMBank need to overcome the 161.8%FP (RM5.45) to promote further upside towards the 176.4%FP (RM5.66) and 200%FP (RM5.99) before stalling, with the rising 30-day ma (RM4.85) acting as uptrend support. CIMB will need convincing breakout above the 161.8%FP (RM8.62) to fuel upside momentum towards the 176.4%FP (RM9.00) and 200%FP (RM9.60) going forward, while uptrend support from the rising 30-day ma (RM7.78) cushion downside.

News Bites

• Malaysia's industrial production index expanded by 5.3% in July 2024, following 5% growth in the previous month driven by a surge in manufacturing output, said the Department of Statistics Malaysia.

• Petroliam Nasional Bhd has reaffirmed its dedication to addressing issues related to natural gas distribution in Sarawak through ongoing discussions with both state and federal governments, as well as Sarawak's Petros.

• Magma Group Bhd has received the green light from shareholders at its extraordinary general meeting for its proposed issuance of redeemable convertible notes aimed at raising up to RM100mn.

• Globetronics Technology Bhd experienced a 32.5% drop in share value, or 26 sen, following the voluntary resignation of its external auditor, KPMG PLT, which also led to the suspension of intraday short-selling.

• APB Resources Bhd, a new major shareholder with a 10.36% stake in Globetronics, saw its share price decline by 4.41%, facing a RM102mn paper loss on its investment in the semiconductor contract manufacturer.

• HE Group Bhd has secured a RM30.6mn contract to construct a 132kV power station for a semiconductor plant in the Ulu Klang Free Trade Zone.

• Chin Hin Group Property Bhd is collaborating with Atlan Holdings Bhd on a high-rise project in Johor Bahru, with an estimated gross development value of RM478.42mn.

• Property developer, Land & General Bhd plans to launch U10 Aria Rimba, a new township project in Shah Alam with a total gross development value of approximately RM2.4bn next year.

• Press Metal Aluminium Holdings Bhd reported a fire incident at its Phase 3 smelter in the Samalaju Industrial Park on Sept 9, which affected 9% of its total smelting capacity. The company anticipates it will take approximately four months to restore operations.

• Sabah-based property developer KTI Landmark Bhd's Taman Seri Lemawang landed residential development in Tuaran, Sabah, has received a Special Award of Excellence in Construction under the Construction Industry Development Board's Sabah Qlassic Programme 2023.

• Solar District Cooling Group Bhd, set to debut on the ACE Market on Sept 19, has seen its initial public offering oversubscribed by 144.08 times.

• China's exports unexpectedly accelerated by nearly 9% YoY in August, reaching their highest value in nearly two years and providing a rare boost to an economy weighed down by deflationary pressures.

• Bank of Japan officials see little need to raise the benchmark rate when board members gather next week, as they are still monitoring lingering volatility in financial markets and the impact of the July hike.

• US households' inflation-adjusted incomes rose last year for the first time since 2019, yet they still have not fully recovered to pre-pandemic levels. The median income increased 4% last year to $80,610, according to the Census Bureau's annual report.

• The European Union is poised to make small downward adjustments to the additional tariff rates proposed for electric vehicles that Tesla Inc and other carmakers import from China.

• Opec on Tuesday cut its forecast for global oil demand growth in 2024 reflecting data received so far this year and also trimmed its expectation for next year, marking the producer group's second consecutive downward revision.

Source: TA Research - 11 Sept 2024