TA Sector Research

Daily Market Commentary - 16 August 2023

Publish date: Wed, 16 Aug 2023, 01:03 PM

Review & Outlook

The local market rose on Tuesday, led by property, construction, banking and technology stocks, as investors switched focus to the eventual rollout of key infrastructure projects following the end of the state elections. The FBM KLCI gained 3.28 points to close at 1,460.28, off an early low of 1,456.27 and high of 1,463.29, as gainers led losers 603 to 369 on improved turnover of 3.87bn shares worth RM2.12bn.

While the local market could be buoyed by anticipation over key infrastructure project announcements, the weaker regional sentiment caused by China's property and economic growth worries may act to dampen the market tone. Key chart supports to cushion the 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.

Bumi Armada remains in a base building above chart supports from the lower Bollinger band (49sen) and the 38.2%FR (47sen), pending breakout confirmation above the 200-day ma (54sen) to aim for the 61.8%FR (57sen) and 76.4%FR (63sen) ahead. Likewise, Dialog is rebuilding support above the 38.2%FR (RM2.13), with a convincing breakout above the 61.8%FR (RM2.40) to target the 76.4%FR (RM2.58) and the 14/2/22 peak (RM2.85) going forward.

News Bites

  • UEM Sunrise Bhd has acquired its first residential development site in Subiaco East in Perth, Western Australia for AUD$22.2mn and will deliver two landmark apartment buildings.
  • Inta Bina Group Bhd has secured a RM206.0mn contract from Southville City Sdn Bhd.
  • Mah Sing Group Bhd said the purchase price of two parcels of land in Puchong Perdana it is acquiring from Millennium Acres Sdn Bhd has been lowered by 8.8% or RM7.6mn.
  • HSS Engineers Bhd and its consortium partners have accepted an award from the Energy Commission to develop a photovoltaic plant with an export capacity of 29.99MW in Kuala Muda, Kedah.
  • UCrest Bhd has entered into a collaborative agreement with Hangsukeji to jointly develop an artificial intelligence 3D printing business for the healthcare market and manufacturing industry.
  • Meta Bright Group Bhd has entered into a strategic alliance with Prominent Synergy Sdn Bhd as they seek to collaborate on mutually beneficial projects and initiatives around Energy Efficiency over the period of the next one year.
  • Abrdn plc has emerged as Farm Fresh Bhd's substantial shareholder after the purchase of a 5.013% stake.
  • Datuk Wira Justin Lim Hwa Tat, who is under investigation by the Malaysian Anti-Corruption Commission, has resigned from the board of SMTrack Bhd as its non-independent non-executive director, with immediate effect.
  • Heineken Malaysia Bhd's 2QFY23 net profit grew 5.1% YoY to RM90.5mn on the back of the lower tax charge, which mitigated the impact of weaker sales revenue and higher marketing expenses.
  • Carlsberg Brewery Malaysia Bhd's 2QFY23 net profit fell marginally 0.8% YoY to RM88.2mn with revenue lower 11.8% YoY to RM506.7mn as a result of a weaker trading environment.
  • Ranhill Utilities Bhd's 2QFY23 net profit surged 72.2% YoY to RM12.1mn, driven by its environment and energy segments.
  • Samchem Holdings Bhd's 2QFY23 net profit sank 70.4% YoY to RM5.4mn on lower sales volume and margins. Revenue declined 24.7% YoY to RM276.2mn.
  • Tex Cycle Technology (M) Bhd's 2QFY23 net profit jumped 181.6% YoY to RM5.1mn as revenue rose 15.7% YoY to RM8.5mn on higher sales demand.
  • MST Golf Group Bhd reported a net profit of RM5.4mn on revenue of RM75.9mn for 2QFY23. There are no comparative year-on-year figures as the group was only listed on 20 July 2023.
  • China's central bank unexpectedly cut key policy rates for the second time in three months on Tuesday, in a fresh sign that the authorities are ramping up monetary easing efforts to boost a sputtering economic recovery.
  • Australia's central bank sees a "credible path" to return inflation to its 2% to 3% target with interest rates at their current level, minutes of its Aug 1 meeting showed, suggesting a higher hurdle to further tightening.
  • US retail sales increased more than expected in July as Americans boosted online purchases and dined out more, suggesting the economy continued to expand early in the third quarter and keeping a recession at bay.

Source: TA Research - 16 Aug 2023

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