TA Sector Research

Daily Market Commentary - 22 August 2023

Publish date: Tue, 22 Aug 2023, 09:49 AM

Review & Outlook

Bursa Malaysia shares stayed mostly range bound on Monday, but bargain hunting in telcos and key utility stocks highlighted trade and managed to shore up the local blue-chip benchmark index. The FBM KLCI climbed up 4.48 points to close at 1,450.57, off an early low of 1,445.1 and high of 1,451.68, as losers edged gainers 498 to 446 on total turnover of 3.31bn shares worth RM2.24bn.

The local market should continue to trade sideways, with rotational interest on utility and steel related stocks highlighting trading, but external concerns over China's lacking stimulus to cushion its slowing economy and threat of further US rate hikes amid high inflation should check gains. On the index, immediate chart supports are from the recent low of 1,433, then 1420/1,400, while resistance will be at the recent 1,464 high and 1,470, with next upside hurdle from the 1,490/1,500 levels.

Aemulus remains in base building phase, pending renewed buying momentum which is key to overcome the upper Bollinger band (34sen) and aim for the 200-day ma (38sen) and 38.2%FR (45sen) ahead, while the 12/5/23 low (29sen) should limit downside risk. Hiap Teck will need breakout confirmation above the 50%FR (43sen) to target the 61.8%FR (48sen) and 76.4%FR (55sen) going forward, with uptrend supports from the 30-day ma (35sen) and 50-day ma (34sen) cushioning downside.

News Bites

  • US companies have made investment pledges totalling US$100bn in various sectors in Malaysia over the last 18 months, US Ambassador to Malaysia Brian McFeeters said.
  • YTL Power International Bhd has confirmed a report in The Edge Malaysia weekly that the company is partnering with KDEB Waste Management Sdn Bhd to set up a RM4.5bn waste-to-energy plant in Rawang, Selangor.
  • Sime Darby Property Bhd has successfully issued its Sukuk Musharakah issuance worth RM600mn under its RM4.5bn Sukuk Musharakah Programme.
  • DXN Holdings Bhd plans to enter the ready-to-eat meal products market, while expanding its cosmetics product range by the end of this year.
  • LBS Bina Group Bhd expects to complete and hand over eight projects in the second half of 2023, which it said will spur profitability and boost its cash position.
  • Fajarbaru Builder Group Bhd's subsidiary Fajarbaru Land (M) Sdn Bhd has entered into a joint venture with Care Dynamic Sdn Bhd to undertake the development of an industrial city park for 672 units of centralised labour quarters in Sungai Gadut, Seremban.
  • Boustead Heavy Industries Corporation Bhd is selling the group's entire 20.8% stake in loss-making Boustead Naval Shipyard Sdn Bhd to Ocean Sunshine Bhd, an indirect unit of Minister of Finance (Inc), for RM1.
  • Top Glove Corp Bhd founder and executive chairman Tan Sri Lim Wee Chai has emerged as a substantial shareholder of Ramssol Group Bhd after raising his stake in the human resources solutions provider to 7.5%.
  • AMMB Holdings Bhd's net profit for 1QFY24 dropped 7.8% to RM378.4mn, from RM410.4mn a year ago, as net impairment charges rose due to higher provisions.
  • MyEG Services Bhd's net profit rose 25.9% to RM111.6mn for 2QFY2023, from RM88.6mn a year ago, driven by the increase in revenue from the group's existing services.
  • Hextar Global Bhd's net profit for 2QFY2023 contracted by 43.3% to RM8.7mn against RM15.3mn a year ago, dragged by lower revenue, higher operating expenses and finance costs.
  • Gas Malaysia Bhd posted a 2QFY23 net profit of RM97.8mn, which was down from RM107.3mn in the same quarter in 2022.
  • Panasonic Manufacturing Malaysia Bhd's net profit surged 78.3% to RM20.4mn for 1QFY24 from RM11.5mn a year earlier, driven by several factors including lower raw material costs, especially for steel and other major raw materials.
  • Lagenda Properties Bhd's net profit fell 34.1% to RM33.2mn in 2QFY2023 from RM50.4mn a year ago, amid lower contribution from its property development segment.
  • Comfort Gloves Bhd posted a net loss of RM4.2mn or 0.72 sen per share for 2QFY2023, versus a net profit of RM3.2mn or 0.55 sen per share a year earlier due to a reduction in margin.
  • Because of poor productivity and population ageing, typical US economic growth of 2.5% or more annually was "not possible anymore" on a sustained basis, said John Williams, the current New York Fed president who at the time was head of the San Francisco Fed.

Source: TA Research - 22 Aug 2023

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