Review & Outlook

Blue chips rose on Thursday, led by construction (+3.8%), technology (+2.7%) and telco (+2%) heavyweights, mirroring regional strength after the US Federal Reserve slashed interest rates by 50 basis points and cued for further rate cuts ahead. The FBM KLCI gained 5.06 points to close at 1,665.65, off an early low of 1,657.13 and high of 1,665.84, as gainers led losers 898 to 322 on higher turnover of 3.99bn shares worth RM4.08bn.

The local market should be buoyed by the upbeat global sentiment on the back of the US Federal Reserve's dovish cue for further rate cuts of a halfpoint by year-end and full point next year, which would encourage further fund flows into the region. Immediate index resistance remains at 1,670, with the recent high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support will be at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports.

UEM Sunrise will need to sustain breakout above the 200-day ma (RM1.02) to boost upside momentum towards RM1.20 and challenge the 20/5/24 high (RM1.28), with downside risk capped by the lower Bollinger band (80sen) and 50%FR (76sen). WCT Holdings need to overcome the 76.4%FR (RM1.14) to fuel recovery momentum towards RM1.25 and re-test the 23/7/24 high (RM1.35) ahead, while the 50%FR (90sen) and 100-day ma (89sen) will act to limit downside.

News Bites

• Malaysia's exports surged 12.1% YoY to RM129.2bn in August thanks to demand for electronics and a sharp rise in shipments to US and other major trading partners.

• AirAsia is planning to expand its network in Indonesia, particularly in East Nusa Tenggara, the southernmost province of the country, according to Capital A Bhd's chief executive officer Tan Sri Tony Fernandes.

• Pharmaniaga Bhd's newly launched biopharmaceutical plant in Puchong that produces human insulin, biosimilars and vaccines is projected to generate RM400.0mn annually or up to 30.0% of the group's revenue.

• Bina Darulaman Bhd clarified that the resignation of its external auditor, KPMG PLT, effective Sept 9, 2024, was part of a routine governance practice.

• Ancom Nylex Bhd is acquiring a 70.0% stake in Colorex Sdn Bhd for RM14.0mn, cash.

• Country Heights Holdings Bhd said it will request Lean Xing Construction Sdn Bhd, a contractor for the group's residential project in Kedah, to withdraw its legal action against the group's subsidiary, Country Heights Smart Living Sdn Bhd, over alleged unpaid payments.

• Datuk Seri Dr Shahril Mokhtar has stepped down as managing director of technology firm Green Packet Bhd after almost a year in the job.

• POS Malaysia Bhd is set to fully transition to electric vehicles by 2030 under its sustainability roadmap, in a move aimed at reducing carbon emissions and lowering operational costs.

• KHPT Holdings Bhd, which manufactures and sells automotive parts and components in Malaysia, aims to raise RM21.7mn via listing on the ACE Market of Bursa Malaysia

• United Malacca Bhd said its net profit rose by nearly five times to RM13.3mn for its 1QFY25, from RM2.7mn a year earlier, thanks to higher contributions from its Malaysian operations.

• Eco World Development Group Bhd's net profit soared 21.3% YoY to RM80.4mn for 3QFY24 from RM66.3mn a year ago, driven by improved earnings contributions from its Malaysian operations.

• SSF Home Group Bhd's net profit dropped 52.8% YoY to RM2.7mn for 1QFY25 from RM1.3mn a year ago, due to softer consumer demand.

• KESM Industries Bhd slipped into the red in its 4QFY24 with a net loss of RM977k versus a net profit of RM316k a year ago, as revenue fell amid lower sales from automotive chip processing.

• Initial claims for the US state unemployment benefits dropped 12,000 last week to a seasonally adjusted 219,000 for the week ended Sept. 14, the lowest level since the middle of May.

• China is widely expected to trim its main policy and benchmark lending rates today, a Reuters poll showed, after the Federal Reserve's outsized interest rate cut removed some of the risks around sharp yuan declines.

Source: TA Research - 20 Sept 2024