Review & Outlook

The local blue-chip benchmark recovered from early weakness to end flat on Thursday, amid declines among regional markets with sentiment dented by waning market momentum after the US Federal Reserve signaled a slower pace for rate cuts next year. The FBM KLCI closed flat at 1,600.09 (+0.51), after rising from early low of 1,590.83, as losers beat gainers 693 to 369 on higher turnover of 3.21bn shares worth RM3.03bn.

Stocks should extend profit-taking consolidation ahead of the weekend, with the broader market tone remaining cautious as ongoing inflation risks in the US have led to expectations of interest rates being higher for longer. 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.

Maybank is attractive to bargain at current levels for rebound upsidetowards the 123.6%FP (RM10.38), with confirmed breakout to challenge the 138.2%FP (RM10.62) and 150%FP (RM10.82) going forward, and crucial chart supports coming from the 76.4%FR (RM9.60) followed by the 61.8%FR (RM9.35). Any further dips in RHB Bank shares to the 100- day ma (RM6.20) should attract bargain hunters looking for rebound upside to the 123.6%FP (RM6.66), with the next major resistance coming from the 138.2%FP (RM6.85) and 150%FP (RM7.01). Stronger support limiting downside is capped at the 76.4%FR (RM6.03).

News Bites

• Mah Sing Group Bhd has acquired 6.0 acres of freehold land in Taman Pelangi, Johor Bahru,from S P Setia Bhd for RM156.8mn to develop a premium serviced apartment project worth RM1.5bn.

• Telekom Malaysia Bhd has signed a MoU with Petronas through its digital arm Petronas Digital Sdn Bhd and Gentari Sdn Bhd to drive digital transformation and sustainable innovation.

• Pentamaster Corporation Bhd proposed to privatise its 63.9%-owned Hong Kong-listed Pentamaster International Ltd with a partner in an exercise that would raise its stake to 71.0%.

• Lotus Circular Bhd has proposed to acquire the entire equity interest in Earthwise Resources Sdn Bhd and the entire equity interest in Expert Resource Management Sdn Bhd for a total purchase consideration of RM100.0mn.

• Vestland Bhd has secured a construction contract worth RM70.0mn from Sg. Besi Construction Sdn Bhd.

• Uzma Bhd has bagged a RM44.2mn sub-contract from Samaiden Group Bhd for the development of a 13.4MWac solar photovoltaic plant in Sungai Petani, Kedah.

• Malaysian Resources Corporation Bhd has confirmed that it issued a notice of termination to Berjaya Rail Sdn Bhd, effectively ending their teaming agreement.

• Catcha Digital Bhd has announced its acquisition of a 70.0% stake in Tastefully Malaysia Sdn Bhd for RM7.6mn cash, to strengthen its position in the integrated digital and offline advertising space.

• The Court of Appeal has granted UEM Sunrise Bhd's wholly-owned unit UEM Land Bhd leave to challenge the Inland Revenue Board's additional tax assessment and penalty of RM8.5mn.

• Chai Woon Yun, daughter of Aset Kayamas founder Tan Sri Datuk Chai Kin Kong, has become the largest shareholder of Kanger International Bhd with 17.2% stake after subscribing to a private placement.

• MARC Ratings has upgraded UEM Edgenta Bhd's Islamic MediumTerm Notes under its RM1.0bn Sukuk Murabahah Programme to AAIS from AA-IS, citing the group's cost management which contributed to enhanced risk profile.

• Malacca Securities Sdn Bhd has advised minority shareholders of Southern Steel Bhd to vote in favour of the company's proposed issuance of new shares to Singapore-based steel firm Green Esteel Pte Ltd.

• Bonia Corporation Bhd is venturing into the health and wellness market with a joint investment in fitness centre operator, Macroverse Sdn Bhd.

• South Malaysia Industries Bhd insisted that no EGM will take place on Jan 9, amid ongoing clashes between two shareholder groups vying for control of the company.

• The Bank of Japan kept interest rates unchanged at 0.25% on Thursday and its governor offered few clues on how soon it could push up borrowing costs.

• The US economy expanded at a faster pace of 3.1% annualised rate in the 3Q24 owing in part to stronger consumer spending and exports.

Source: TA Research - 20 Dec 2024