Review & Outlook

Blue chips held steady on Wednesday, ignoring the weaker regional tone after China inflation data confirmed the recovery in the world's secondbiggest economy is losing steam. The KLCI ended 11.13 points up at the day's high of 1,462.03, off an early low of 1,446.71, as gainers edged losers 430 to 417 on turnover of 3.16bn shares worth RM2.18bn.

While sentiment has improved somewhat, stronger buying momentum and liquidity boost on the domestic market will be needed to promote sustained rise to higher ground. Immediate resistance for the index stays at last week's high of 1,464, with 1,470, and the 1,490/1,500 level acting as tougher upside hurdles. Immediate support cushioning downside will be last week's low of 1,433, with stronger supports seen at 1,420 and 1,400.

RHB Bank need convincing strength above the 123.6%FP (RM5.91) to enhance upside momentum towards the 138.2%FP (RM6.06) and 150%FP (RM6.18) ahead, while key retracement support at the 76.4%FR (RM5.41) cushions downside. Sime Darby needs breakout confirmation above the 25/03/22 high (RM2.38) to boost upside momentum and target the 123.6%FP (RM2.50), 138.2%FP (RM2.57) and 150%FP (RM2.63) going forward, while crucial support from the 50%FR (RM2.12) limits downside risk.

News Bites

• Services sector revenue grew 6.9% YoY to RM568.3bn in the 2Q23, the Department of Statistics Malaysia reported.

• Malaysia's construction activity in the 2Q23 expanded for the fifth straight quarter since 2Q2022, reporting an increase of 8.1% YoY in value of work done to RM32.4bn.

• Tenaga Nasional Berhad has established the Green Lane Pathway, an exclusive pathway and strategic offering for Malaysia's data centre market to provide efficient and environmentally responsible solutions for data centre operators.

• Alliance Bank Malaysia Bhd, which aims to achieve RM10.0bn in new sustainable banking business by FY25, has signed a Memorandum of Understanding with the developer for the Andaman Island project Persada Mentari Sdn Bhd to encourage green-certified properties.

• Perak Corporation Bhd is disposing of a piece of agricultural land in Perak to Kim Poh Sitt Tat Feedmill Sdn Bhd for RM5.5mn cash as part of its regularisation plan.

• Iqzan Holding Bhd has sold a majority interest in its unit, Zoomic Technology (M) Sdn Bhd, to Digital Miracles Sdn Bhd and Million Saint Consultancy Sdn Bhd for RM3.6mn, as settlement of monies owing to the companies.

• AME Real Estate Investment Trust is aiming for 100% renewal of its 12 leases expiring in FY24 and is on the lookout for new properties in Johor, Klang Valley and the northern region to further strengthen its asset base.

• Perdana Petroleum Bhd has received two work orders from Petronas Carigali Sdn Bhd for the provision of two units of anchor handling tug and supply vessels worth RM21.9mn.

• Thirty months after acquiring a 51.0% stake in the developer of Nexus Residence in USJ Subang West, Majuperak Holdings Bhd has decided to sell back the stake at the original sum of RM12.5mn.

• Binasat Communications Bhd has agreed to sell two double-storey semi-detached adjoining office building at Taman Industri Bukit Permai in Ulu Langat, Kuala Lumpur, for RM10.5mn cash.

• Handal Energy Bhd's independent and non-executive chairman Tengku Baderul Zaman Ibni Sultan Mahmud and executive director Tengku Munawir Islahuddin Tengku Noone Aziz have resigned from its board effective yesterday.

• Bumi Armada Bhd's unplanned shutdown of the Armada Kraken floating production storage and offloading vessel in the UK North Sea has been restored following work done.

• Hartalega Holdings Bhd posted a net loss of RM52.5mn in 1QFY24 as compared to a net profit of RM88.3mn a year ago, due to lower average selling prices and sales volume.

• Maxis Bhd's net profit climbed 2.5% YoY to RM330.0mn for 2QFY23 from RM322.0mn a year ago, on higher service revenue, discontinued prosperity tax and prudent capital expenditure investments.

• Mr DIY Group (M) Bhd's net profit increased 11.2% YoY to RM150.3mn for 2QFY23, from RM135.2mn a year prior, on the back of a higher revenue and gross profit margin.

• Hup Seng Industries Bhd's net profit surged 187.1% YoY to RM8.7mn for 2QFY23, from RM3.0mn a year ago, thanks to higher domestic and export sales.

• China's consumer and producer prices both declined by 0.3% YoY and 4.4% YoY respectively in July, a sign of deflation pressure.

Source: TA Research - 10 Aug 2023