Review & Outlook

Contrasting signals on technical momentum indicators on the FBM KLCI following last week's rebound from a two-month low suggests that recovery momentum may prove fleeting, as trend indicators continue to weaken, implying limited or short-term buying commitments which should dissipate at higher levels. Meantime, continued ringgit weakness on the back of the second Trump administration which could sustain higher inflation and interest rates for the US economy should dampen near-term recovery momentum.

On the index, immediate resistance is seen at 1,648, with tougher upside hurdles at 1,660 and 1,675. Key chart supports are at the 1,600 psychological level, while the 200-day moving average level, now at 1,594, must hold to prevent further downward correction potential to next retracement support at 1,575, the 76.4%FR level.

As for stock picks for this week, selective banking, healthcare, technology and utility players should see fresh bargain hunting interest following recent sharp profit-taking corrections.

News Bites

• Malaysia's unemployment rate remained stable at 3.2%, in September this year, as the number of jobless people fell while the labour force expanded.

• Malaysia's industrial output rose 2.3% YoY in September, slower than expected, as manufacturing activity and electricity generation growth eased, while mining production contracted.

• Straits Mobile Investment Pte Ltd, a wholly owned unit of Singaporeheadquartered ST Telemedia, has agreed to the strategic alignment of its shareholding ownership in U Mobile to 20% from 49%, thus increasing U Mobile's Malaysian ownership.

• ABS Capital Sdn Bhd has made an unconditional mandatory takeover offer to acquire the remaining shares of Milux Corp Bhd at 43.2 sen per share, following its acquisition of a 63.88% stake from executive vice chairman Datuk Wira Ling Kah Chok and other shareholders for RM64.9mn.

• Steel Hawk Bhd has secured a subcontract from Petra Energy Bhd to provide offshore living quarters maintenance and repair services for EPOMS offshore facilities in Sarawak.

• Fajarbaru Builder Group Bhd has pulled out from participating in the affordable housing development in Putrajaya dubbed Residensi Cemara, which is estimated to have a gross development value of RM192mn.

• JF Technology Bhd is acquiring Singapore-based Transcend Technologies (S) Pte Ltd and Transcend Tech Asia Pacific Pte Ltd for SGD6mn, expanding its business globally.

• Sarawak Cable Bhd said trading in its shares will be suspended from Nov 18, ahead of the court hearing of an application to place the company under judicial management.

• REDtone Digital Bhd has ceased to be a substantial shareholder of HeiTech Padu Bhd after disposing of a 1.01% stake in the open market.

• Cypark Resources Bhd announced its chief financial officer, Vinie Chong Pui Ling has resigned, just three months after her appointment on Aug 15 to "pursue other interests".

• Maxis Bhd's 3QFY24 net profit grew by 28% YoY to RM366mn, helped by a larger subscriber base, coupled with a drop in staff costs after earlier lay-offs.

• 99 Speed Mart Retail Holdings Bhd's 3QFY24 net profit dipped 3.5% to RM107.2mn from RM111.1mn a year ago, dragged by higher administrative and other operating spending.

• Carlsberg Brewery Malaysia Bhd said its net profit increased 19.8% YoY to RM91.0mn in 3QFY24, bolstered by better performance in Malaysia.

• Westports Holdings Bhd's 3QFY24 net profit rose 19.5% to RM233.1mn, up from RM195mn a year earlier, driven by a rise in container volumes.

• Duopharma Biotech Bhd said its 3QFY24 net profit increased 73.9% to RM15.6mn from RM9.0mn a year ago, driven by higher sales across key sectors, particularly the public health segment.

• China's consumer inflation was anaemic in October at 0.3% YoY, while factory-gate prices continued falling at 2.9% YoY, suggesting the government's latest round of stimulus is far from sufficient to free the economy from the grip of deflation.

• China's National People's Congress approved bills to allow local governments to allocate CNY10tn towards reducing off-balance sheet debt.

• The University of Michigan's preliminary November sentiment index advanced to 73, exceeding all but one estimate in a Bloomberg survey of economists.

Source: TA Research - 11 Nov 2024