Review & Outlook

Bursa Malaysia shares closed softer on Monday, as the results of the six state elections over the weekend was within market expectations but saw the current unity government losing support in its traditional strongholds. The FBM KLCI eased 0.16 points to settle at 1,457, off an early low of 1,452.15 and high of 1,457.43, as gainers led losers 575 to 404 on total turnover of 3.53bn shares worth RM1.89bn.

Stocks should trade sideways with downward bias given the softer regional tone due to China's economic growth worries, and weaker state support for the current unity government. Key chart supports to cushion downside on the index are at the recent low of 1,433, then 1420/1,400, while immediate overhead resistance is from the recent high of 1,464, then 1,470, followed by the 1,490/1,500 level.

Gadang need to climb above the 23.6%FR (31sen) to boost upside momentum towards the 38.2%FR (34sen), with next hurdle from the 50%FR (36sen), while the lower Bollinger band (28sen) and 29/9/22 low (27sen) limit downside risk. Sunway Construction will need to overcome the 2/8/23 high (RM1.83) to enhance upside potential and target the 123.6%FP (RM1.89), 138.2%FP (RM1.95) and 150%FP (RM2.00) ahead, with key retracement support at the 76.4%FR (RM1.68) cushioning downside.

News Bites

• Sime Darby Bhd's indirect wholly-owned subsidiary Sime Darby Industrial Australia Pty Ltd has inked an AUD500.0mn cash deal to acquire Cavpower Group, which is a distributor of Caterpillar Inc equipment in South Australia and Broken Hill in New South Wales.

• Maxis Bhd has obtained the approval from its shareholders to execute the finalised access agreement with Digital Nasional Berhad.

• Sunway Bhd's wholly-owned unit Sunway City Sdn Bhd is acquiring Sunway Iskandar Development Sdn Bhd from Iskandar Assets Sdn Bhd for RM85.0mn by way of purchasing shares and subscription of preference shares of SIDSB.

• Public Bank Bhd has partnered with Proton New Energy Technology Sdn Bhd to provide financing on a wholesome financial products and services for the latter's customers.

• Astro Malaysia Holdings Bhd said that its wholly-owned subsidiary, Measat Broadcast Network Systems Sdn Bhd, has accepted a term loan facility of up to RM400.0mn from Sumitomo Mitsui Banking Corporation Malaysia Bhd.

• Coraza Integrated Technology Bhd is acquiring an 8,538sqm parcel of freehold industrial land with offices and factories in Nibong Tebal, Penang, from Huhtamaki Foodservice Malaysia Sdn Bhd for RM17.7mn.

• Iris Corporation Bhd announced that the Ministry of Home Affairs has cancelled its contract for the National Integrated Immigration System with immediate effect.

• GFM Services Bhd has proposed to undertake a transfer of its listing and quotation for its entire issued share capital from the ACE Market to the Main Market of Bursa Malaysia by 2H23.

• Country Heights Holdings Bhd has defaulted on the payment of Islamic term financing facilities totaling RM181.1mn provided by MBSB Bank Bhd.

• Meta Bright Group Bhd has entered into a heads of agreement with G.E. Mining Sdn Bhd to design, develop and supply a renewable energy solution to G.E. Mining.

• Harn Len Corporation Bhd has entered into an agreement with Jutawan Enterprise (Jutawan) to explore a collaboration in the pineapple plantation business.

• Impiana Hotels Bhd saw Datuk Seri Lee Hock Seng and his spouse Datin Seri Joanne Yew Hong Im emerge as the group's largest substantial shareholders following the duo's acquisition of 120.8mn shares or 19.9% stake in the company.

• Berjaya Food Bhd's net profit fell 57.5% YoY to RM17.3mn for 4QFY23, from RM40.7mn a year ago, as the group was hit by margin compression arising from inflationary pressures.

• KLCC Stapled Group Bhd's net profit for 2QFY23 rose 9.5% YoY to RM180.8mn, from RM165.2mn a year ago, on the back of higher revenue and interest income.

• RCE Capital Bhd's net profit rose 14.4% YoY to RM36.9mn for 1QFY24, from RM32.2mn a year ago, thanks to higher revenue and lower allowances for impairment loss on receivables.

• Fed Chair Jerome Powell says he expects the central bank to navigate a path where the US economy expands with inflation rates falling back to the 2% target, though the task will be challenging.

Source: TA Research - 15 Aug 2023