Review & Outlook

The local market rebounded on Thursday, aided by gains in property, banking and plantation stocks, on hopes that Budget 2025 will contain measures to boost the domestic property market. The FBM KLCI gained 8.81 points to close at 1,641.44, off an early low of 1,633.72 and high of 1,642.93, as gainers led losers 634 to 391 on total turnover of 2.68bn shares worth RM2.45bn.

The broader market should extend range bound trade pending the unveiling of Budget 2025 proposals by late afternoon, with buying interest to focus on sectors seen to benefit. Immediate index resistance remains at 1,660, followed by the recent highs of 1,675 and 1,684, and then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support will be the recent correction low of 1,625, with 1,620 and then 1,600 acting as stronger supports.

Axiata will be attractive to bargain on weakness for rebound upside, with a confirmed breakout above the 200-day ma (RM2.54) to target the 61.8%FR (RM2.64) and 76.4%FR (RM2.77) ahead, and key chart supports from the 23.6%FR (RM2.29) and 31/10/23 low (RM2.08). CelcomDigi looks ideal to accumulate at current levels with the 38.2%FR (RM3.51) and 23.6%FR (RM3.31) to cushion downside, while a breakout above the 50%FR (RM3.68) should aim for the 61.8%FR (RM3.85) and 76.4%FR (RM4.05) going forward.

News Bites

• Genting Malaysia Bhd said the lawsuit filed by RAV Bahamas Ltd, seeking over US$600.0mn in damages related to Resorts World Bimini's operations, will not materially impact the group's financial results or operations.
• Varia Bhd's wholly-owned subsidiary, Pembinaan Teguh Maju Sdn Bhd, has secured a RM571.8mn contract from Social Security Organisation to build a rehabilitation centre at Setiu, Terengganu.
• SC Estate Builder Bhd and its consortium partner, JK Spark Sdn Bhd, plan to bid for Sabah's large-scale solar power plant projects initiated by the Energy Commission of Sabah.
• Salcon Bhd's wholly owned subsidiary, Salcon Engineering Bhd, has secured a contract worth RM18.5mn from LTE Engineers Sdn Bhd on behalf of F&N AgriValley Sdn Bhd.
• AME Real Estate Investment Trust's proposed acquisition of four factories in Johor for RM119.5mn has been deemed fair and reasonable by MainStreet Adviser.
• Bintai Kinden Corp Bhd's wholly-owned subsidiary has signed a MoU with Henan Province Installation Group (Malaysia) Sdn Bhd to enhance tendering capabilities and jointly pursue construction projects in Malaysia.
• LKL International Bhd announced a proposed joint venture with PT Fasilitas Teknologi Nusantara to expand into the Indonesian healthcare market.
• Zecon Bhd has entered into a tripartite MoU with Sarawak Digital Economy Corp Bhd and Centre for Technology Excellence Sarawak Sdn Bhd for the development of the 3,000-acre Kota Petra Green Technology Park in Sarawak.
• Alpha IVF Group Bhd is expanding into Indonesia, its largest foreign market, by opening its first satellite clinic in an upmarket Jakarta district.
• Ancom Nylex Bhd reported a 36.5% drop in 1QFY2025 net profit to RM13.2mn, as its agricultural chemicals business was affected by higher freight costs due to geopolitical conflicts.
• Malaysia Airports Holdings Bhd reported a 10.0% YoY increase in passenger traffic for 3Q2024, reaching 36.1mn passengers.
• The US Federal Reserve said industrial production decreased by 0.3% in September after rising by a downwardly revised 0.3% in August.
• The European Central Bank cut interest rates by 25 basis points for the third time this year on Thursday, saying inflation in the eurozone was increasingly under control while the outlook for the wider economy was worsening.

Source: TA Research - 18 Oct 2024