Review & Outlook

Bursa Malaysia shares slipped into profit-taking consolidation on Monday, with traders taking some profits on recent strong gains in construction and property counters linked to the Johor-Singapore Special Economic Zone following the tax incentives introduced to support growth. The FBM KLCI shed 3.52 points to close at 1,665.30, off an early high of 1,671.62 and low of 1,658.48, as losers beat gainers 675 to 458 on total turnover of 3.36bn shares worth RM3.17bn.

Stocks should remain upbeat amid hopes for further rate cuts from key global central bankers, which would encourage more foreign fund flows into the region. Immediate index resistance will be at the recent high of 1,674, followed by the high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support will be at 1,650, then the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports.

Gadang need to increase breakout momentum above the 38.2%FR (37sen) to enhance upside potential towards the 50%FR (40sen) and 61.8%FR (43sen) ahead, with the lower Bollinger band (32sen) expected to cushion downside. Hiap Teck will need sustained strength above the 61.8%FR (39sen) to fuel further upside momentum towards the 76.4%FR (43sen) and 47sen going forward, while the lower Bollinger band (29sen) should be able to cap downside risk.

News Bites

• Malaysia's headline inflation rose 1.9% YoY in August 2024, driven by increased prices at restaurants, and costlier utilities and food.

• Malaysia international reserves totalled US$117.6bn, the largest hoard of foreign reserves in nearly a decade by Sept 13.

• Alliance Bank Malaysia Bhd announced the appointment of Tan Sri Amirsham A Aziz, former president and chief executive officer of Malayan Banking Bhd, to its board.

• After a long wait, Sarawak will finally formalise a deal on Friday to raise its stake in Affin Bank Bhd to around 30.0%.

• Capital A Bhd's aviation arm AirAsia Bhd expects its expanded domestic network and additional seats to boost revenue for the year by 10.0%.

• ITMax System Bhd's subsidiary Southmax Sdn Bhd has been appointed by Segamat Municipal Council as the smart parking operator of 7,637 street parking bays in Segamat, Johor.

• EPB Group Bhd has signed a sale and purchase agreement with Penang Development Corporation to acquire a parcel of industrial land located at Plot P23B, Penang Science Park North for RM22.5mn.

• Pharmaniaga Bhd announced the resignation of PricewaterhouseCoopers PLT as its external auditor and the appointment of Ernst & Young as its auditor for FY24.

• KJTS Group Bhd has secured a contract worth RM23.8mn for subcontract work for a data centre in Sedenak Tech Park, Johor.

• Specialty fertiliser company Cropmate Bhd has received the approval to list on the ACE Market of Bursa Malaysia.

• Minetech Resources Bhd has changed its name to Aizo Group Bhd, with the name change to take effect from 9am on Sept 25.

• Three directors have stepped down from APB Resources Bhd's board amid a sharp fall in the company's share price.

• Industronics Bhd is disposing of 1,382 sq metres of freehold land in Kajang, Selangor to People and Global Sdn. Bhd. for RM7.0mn.

• Fiamma Holdings Bhd saw Casa Holdings Ltd cease to be its substantial shareholder after disposing of its entire 14.1% stake in the electrical home appliance distributor.

• Hamburg-based chemical marketing firm Helm AG is subscribing for shares of Ancom Nylex Bhd through a private placement that will give it control of 9.5%.

• Apollo Food Holdings Bhd's net profit jumped 26.7% YoY to RM9.7mn for 1QFY25 from RM7.6mn a year ago, due to higher revenue amid an increase in domestic and export sales.

• China announced plans for a rare briefing on the economy by three top financial regulators just as it cut one of its short-term policy rates, fuelling speculation officials are preparing to ramp up efforts to revive growth.

• The US Commerce Department on Monday proposed prohibiting key Chinese software and hardware in connected vehicles on American roads due to national security concerns, a move that would effectively bar nearly all Chinese cars from entering the US market.

• A handful of Federal Reserve officials on Monday left open the door to additional large interest-rate cuts, noting that current rates still weigh heavily on the US economy.

Source: TA Research - 24 Sept 2024