Review & Outlook

Blue chips declined further on Tuesday, amid a lack of positive domestic catalysts with investors reluctant to make significant bets ahead of the Federal Reserve's interest rate decision later this week. The FBM KLCI fell 9.52 points to close at 1,597.33, off an early high of 1,606.81 and low of 1,594.51, as losers bashed gainers 704 to 346 on total turnover of 2.99bn shares worth RM2.44bn.

Cautious trade with a downward bias should persist given the underwhelming fiscal stimulus measures from China while investors await the outcome of the two-day FOMC meeting in the US. Immediate index support stays at 1,588, the 38.2%FR of the 1,529 low (6 Aug) to 1,684 high (29 Aug) rally, with stronger key supports at 1,565, the 23.6%FR level, and then 1,550. Immediate resistance remains at 1,628, next 1,648, followed by the September peak of 1,675.

Aemulus shares need sustained strength above the 38.2%FR (35sen) to enhance upward momentum towards the 50%FR (38sen), with next resistance seen at the 61.8%FR (42sen) ahead, while the lower Bollinger band (26sen) and the 01/12/23 low (23sen), limit downside risk. Meanwhile, VSI needs breakout confirmation above the 76.4%FR (RM1.18) to boost upside momentum and target RM1.26, with stronger upside hurdle coming at the peak of 15/07/24 (RM1.33), while crucial supports from the 50%FR (RM1.01) and 38.2FR% (94sen) cushion downside.

News Bites

• Fitch Ratings has affirmed Malaysia's long-term foreign-currency issuer default rating at BBB+ with a stable outlook and expects Malaysia's economy to expand by 5.2% in 2024, then slow to 4.5% in 2025, and 4.3% in 2026.

• Public Bank Bhd and Jati Tinggi Group Bhd have signed a MoU to install photovoltaic solar panel systems across 135 Public Bank for RM14.9mn.

• Cash-strapped KNM Group Bhd said its German-based subsidiaries in the Borsig Group have secured a new credit facility of €60.0mn (RM280.4mn), enabling them to continue operations as usual.

• VSolar Group Bhd has proposed a share capital reduction to eliminate up to RM100.0mn of its accumulated losses.

• Ahamd Zaki Resources Bhd has won a legal case in the Kuala Lumpur High Court, with the court ruling in favour of its subsidiary, Betanaz Properties Sdn Bhd, and awarding RM18.7mn in damages after finding that Aeon Co (M) Bhd had wrongfully terminated a tenancy agreement.

• PUC Bhd has revised its proposed acquisition of Alevate Solutions Sdn Bhd for RM100.0mn, alongside the implementation of a share issuance scheme.

• A company linked to Sarawak timber and media baron Tan Sri Tiong Hiew King is acquiring a total 13.8% stake in Borneo Edible Oils Sdn Bhd from Subur Tiasa Holdings Bhd and Rimbunan Sawit Bhd, for RM5.4mn cumulatively.

• Scanwolf Corporation Bhd has secured a contract worth RM6.0mn from Golden Rainbow View Sdn Bhd for the provision of supply, delivery, construction, and completion of sales gallery work.

• Kumpulan Perangsang Selangor Bhd is appealing against the RM7.9mn capital gains tax assessment and non-filing penalty imposed by the Inland Revenue Board.

• Sapura Energy Bhd has secured its fourth deadline extension until May 31, 2025 from Bursa Securities to submit its regularisation plan to exit its PN17 status.

• Gotion High-Tech, a global player in battery energy storage and power battery technology, signed a MoU with ITRAMAS Corporation and UEM Sunrise Bhd to establish an advanced research and development centre.

• Target 1 Sdn Bhd alleged that South Malaysia Industries Bhd is not cooperating to facilitate the EGM scheduled for January 9, 2025.

• A Sessions Court imposed a fine of RM25k or eight months' jail on WCT Holdings Bhd for failing to ensure the safety of a Bangladeshi worker who died while working at a construction site last year.

• TXCD Bhd said its single largest shareholder, Datuk Seri Liew Kok Leong, has disposed of his entire 15.6% stake in the PN17 engineering construction firm.

• PT Resources Holdings Bhd's net profit fell 91.0% YoY to RM1.7mn for 2QFY25, from RM18.7mn a year ago, mainly dragged by higher administrative expenses.

• Chinese leaders agreed to raise the budget deficit to 4% of gross domestic product next year, its highest on record, while maintaining an economic growth target of around 5%, according to Reuters.

• US industrial production unexpectedly declined 0.1% in November, which followed a downwardly revised 0.4% drop a month earlier.

Source: TA Research - 18 Dec 2024