Review & Outlook

The local benchmark fell into profit-taking correction on Wednesday, with selloffs led by the healthcare, technology, consumer products and energy sectors as higher-than-expected U.S. job openings solidified expectations of further inflation and slower pace for rate cuts by the U.S. Federal Reserve. The FBM KLCI fell 14.96 points, off an early high of 1,631.15, to close at the day's low of 1,614.83, as losers swarmed gainers 827 to 285 on total trade of 3.59bn shares worth RM3.06bn.

Local and regional markets will likely experience further near-term weakness as investors' risk appetite continues to shrink due to rising U.S bond yields and the state of the Chinese economy. Immediate index resistance remains at 1,648, followed by the September peak of 1,675 with tougher resistance seen at the 1,684 high (29 Aug). Immediate support is revised downwards to 1,600 with better supports at 1,588, which is the 38.2%FR level, followed by 1,565, the 23.6%FR level, with next crucial support at 1,550.

Further selloff on Supermax towards crucial supports at RM1.10 and RM1.00 should attract bargain hunters looking for rebound upside to RM1.30, with stronger upside hurdles at RM1.45 and RM1.60 ahead. Likewise, Top Glove should attract buyers on weakness for recovery upside towards RM1.40, with RM1.52 and RM1.65 as next upside hurdles, while key chart supports can be found at RM1.20 and RM1.10.

News Bites

• Malaysia's international reserves dipped to US$116.2bn as at Dec 31, 2024, from US$118.1bn two weeks earlier on Dec 13.

• Gateway Development Alliance Sdn Bhd has announced that its takeover offer of Malaysia Airports Holdings Bhd has garnered an effective 84.1% holdings as of 5 PM yesterday.

• Reservoir Link Energy Bhd said on Wednesday that its 45%-owned associate has secured a RM20mn subcontract for a 10-megawatt solar farm in Kuala Langat, Selangor.

• IGB Real Estate Investment Trust carried out a revaluation on two of its investment properties resulting in a revaluation surplus of RM264mn.

• Swift Energy Technology Bhd is expecting mid-teen earnings growth in the current financial year, leveraging new opportunities in the renewable energy industry within the oil and gas sector.

• MClean Technologies Bhd has completed its private placement, issuing 49mn new shares at RM0.27 each, representing about 25% of the company's total issued shares, excluding treasury shares.

• Aeon Co (M) Bhd announced on Wednesday that the High Court has granted the company a conditional stay of the judgment issued on Dec 16, 2024, which found Aeon in breach of a tenancy agreement with Betanaz Properties Sdn Bhd, a 51%-owned subsidiary of Ahmad Zaki Resources Bhd.

• Pantech Global Bhd has entered into an underwriting agreement with Alliance Islamic Bank Bhd for its proposed IPO that comprises the issuance of 262.2mn new shares, representing 30.9% of the company enlarged share capital.

• The directors of UUE Holdings Bhd have collectively disposed of shares valued at RM29.1mn on the ACE Market to institutional funds, following the expiry of the typical six-month moratorium period on directors' shares after the company's IPO.

• HSS Engineers Bhd has announced that the partnership between its wholly-owned subsidiary HEB Energy Sdn Bhd and Unique Fire Holdings Bhd has secured a contract for the development of a 95MW large scale solar photovoltaic power plant in Hilir Perak, Perak.

• Erdasan Group Bhd, formerly known as AT Systematization Bhd, has proposed a share capital reduction to eliminate up to RM100mn of its accumulated losses.

• Edaran Bhd has proposed a share capital reduction of up to RM52mn of its RM68.0mn share capital to wipe out its accumulated losses.

• CJ Century Logistics Holdings Bhd has appointed Kim Hyunchul, a Korean national, as its deputy chief executive officer with immediate effect.

• Construction firm Lim Seong Hai Capital Bhd and soil erosion control company Fibromat (M) Bhd have received approval to transfer their listings to the ACE Market from the LEAP Market.

• China will subsidise more consumer products and boost funding for industrial equipment upgrades, ramping up a programme aimed at bolstering domestic consumption in the face of growing headwinds for exports.

• Initial claims for state unemployment benefits in the US dropped 10,000 to a seasonally adjusted 201,000 for the week ended Jan. 4.

Source: TA Research - 9 Jan 2025