Review & Outlook

The local market fell into profit-taking correction mode on Wednesday, led by oil & gas, technology and plantation heavyweights, with worries over slower growth in the US and China dampening investor sentiment. The FBM KLCI shed 20.55 points, or 1.24 percent, to settle at 1,639.80, off an early high of 1,654.38 and low of 1,638.90, as losers trashed gainers 825 to 283 on moderate turnover of 2.96bn shares worth RM3.34bn.

Blue chips are likely to stay range bound pending the outcome of the closely watched US inflation data and interest rate cut, and as foreign interest on key banking and utility stocks cap downside. Immediate index support remains at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Immediate resistance is revised lower to 1,670, with the recent high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels.

Axiata will need to overcome the 50%FR (RM2.60) decisively to extend further recovery towards the 61.8%FR (RM2.70) and 76.4%FR (RM2.84) ahead, while downside is cushioned by the lower Bollinger band (RM2.34). CelcomDigi need strong breakout momentum above the 61.8%FR (RM3.84) to sustain further upside momentum towards the 76.4%FR (RM4.05) and 30/5/23 high (RM4.37) going forward, with the lower Bollinger band (RM3.44) capping downside risk.

News Bites

• Crude palm oil prices are anticipated to hover around RM4,000 per tonne by year end, according to the Malaysian Palm Oil Board.

• Genting Malaysia Bhd's indirect wholly-owned subsidiaries, Genting New York LLC (GENNY) and GENNY Capital Inc., have priced their offering of US$525mn in aggregate principal amount of 7.250% senior unsecured notes due 2029.

• EP Manufacturing Bhd is raising RM39.65mn through a share placement representing 30% of its capital, with allocations split equally between Mutual Concept Sdn Bhd and Bermaz Auto Bhd's subsidiary, Bermaz Capital Sdn Bhd.

• IHH Healthcare Bhd's indirect wholly-owned subsidiary, Pantai Holdings Sdn Bhd, has lodged documents with the Securities Commission to establish sukuk wakalah programmes of up to RM15bn.

• Hextar Technologies Solutions Bhd is in exclusive talks with Widad Group Bhd to sell five industrial plots in Negeri Sembilan.

• Mikro MSC Bhd is proposing to diversify its business to include the design, manufacture, and installation of signs and advertising displays, as well as the provision of interior fit-out services.

• Southern Steel Bhd plans to issue new shares to Green Esteel Pte Ltd, allowing the Singapore company to gain a controlling stake of at least 50.1%. The share issuance, priced at 42 sen each, is aimed at raising funds to enhance Southern Steel's manufacturing capabilities.

• Citaglobal Bhd has secured two construction-related contracts for jobs in Sarawak totalling RM50.95mn.

• Suria Capital Holdings Bhd signed a joint development agreement for the Jesselton Docklands 2 project in Kota Kinabalu, a commercial mixeduse development as part of the Jesselton Waterfront City.

• Kerjaya Prospek Group Bhd 's wholly-owned subsidiary Kerjaya Prospek (M) Sdn Bhd has secured a contract from Mega Legacy (M) Sdn Bhd, a subsidiary of UEM Sunrise Bhd, for a building project in Batu, Kuala Lumpur, for RM292.8mn.

• Bermaz Auto Bhd reported a 29.94% decrease in first-quarter net profit, dropping to RM70.22mn from RM100.22mn a year earlier, due to lower sales and increased competition.

• ICT Zone Asia Bhd saw its 1HFY2024 net profit more than double to RM4.37mn from RM2.02mn the previous year, driven by its technology financing and cloud solutions segments.

• Prime Minister Narendra Modi trumpeted India's potential in technology, saying the country aims to increase its electronics sector to US$500bn (RM2.17tn) by the end of the decade.

• Underlying US inflation unexpectedly picked up in August, rising 3.2% YoY, on higher prices for housing and travel, undercutting the chances of an outsize Federal Reserve interest-rate cut next week.

• The UK economy stagnated for a second month in July, suggesting that a rapid recovery from recession is now losing momentum in a blow for Prime Minister Keir Starmer. GDP was unchanged after flatlining in June, the Office for National Statistics said.

Source: TA Research - 12 Sept 2024