TA Sector Research

Daily Market Commentary - 25 August 2023

Publish date: Fri, 25 Aug 2023, 10:08 AM

Review & Outlook

The local market rebounded on Thursday as bargain hunters lifted telco, plantation and telco heavyweights from the previous day's falls, while the broader market stayed range bound as investors await cues from global central bankers on interest rate direction. The FBM KLCI rose 4.56 points to close at 1,444.67, off an opening low of 1,441.52 and high of 1,446.75, as gainers edged losers by 500 to 421 on turnover of 3.53bn shares worth RM1.91bn.

Stocks should extend consolidation ahead of the weekend, as investors continue to search for more solid market leads, and caution prevails amid anticipation for clues over interest rate direction from the closely followed global central bank summit in the US. Immediate index chart supports stay at 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.

SKP is still base building at current depressed levels, with downside cushioned by the 13/7/23 low (86sen), while a breakout confirmation above the 100-day ma (RM1.08) should aim for the 76.4%FR (RM1.19) and 200-day ma (RM1.32) ahead. VSI needs a convincing breakout above the 38.2%FR (97sen) to target the 50%FR (RM1.03) and 61.8%FR (RM1.10) going forward, with the 200-day ma (86sen) and 100-day ma (84sen) cushioning downside.

News Bites

  • Malaysia's progressive wage system policy has been approved at the Cabinet level and the details will be tabled during the upcoming Budget 2024 in October.
  • Tenaga Nasional Bhd plans to invest a total of RM90.0bn into Malaysia's grid in the coming 5-year period to ensure infrastructure does not become an obstacle in the nation's energy transition endeavours.
  • Kuala Lumpur Kepong Bhd has proposed to buy 739.2mn shares or 33.0% and one share in Boustead Plantations Bhd for a total of RM1.2bn and plans to take the company private via a mandatory general offer.
  • Sime Darby Bhd is buying a 61.2% equity interest in UMW Holdings Bhd from its parent company Permodalan Nasional Bhd for RM3.6bn or RM5.0/share and will launch a mandatory general offer to buy the remaining shareholding of 38.8% and take it private.
  • Eco World International Bhd is giving out a RM792.0mn dividend next month, with 3 of its largest shareholders entitled to nearly 70.0% or RM550.8mn.
  • Genetec Technology Bhd has secured approval from the Securities Commission Malaysia to transfer its listing to the Main Market, provided the group enhances its corporate governance.
  • Pintaras Jaya Bhd has secured 8 piling contracts in Singapore worth a total of RM160.0mn.
  • Betamek Bhd is investing in software and system development and implementation to facilitate factory automation towards industry 4.0.
  • Malaysia Airports Holdings Bhd posted a net profit of RM102.5mn in 2QFY23 against a net loss of RM58.2mn a year ago, as revenue rose 78.6% YoY to RM1.2bn, thanks to increased passenger traffic.
  • Sunway Bhd's net profit fell 7.2% YoY to RM149.9mn in 2QFY23 due to lower contribution from property investment and other operating income more than offset a rise in revenue.
  • Malayan Cement Bhd's 4QFY23 net profit rose 133.1% YoY to RM79.6mn as higher revenue more than offset the increase in electricity and maintenance costs.
  • DRB-HICOM Bhd registered an 80.1% YoY plunge in net profit to RM33.7mn in the 2QFY23 due to the absence of asset disposal gains recorded in the corresponding period.
  • 7-Eleven Malaysia Holdings Bhd's net profit inched down 1.6% YoY to RM25.4mn, dragged by lower profit contribution from the pharmaceutical segment.
  • MSM Holdings Bhd saw its net loss narrowing by 38.9% YoY to RM20.8mn in 2QFY23 on the back of higher capacity utilisation, lower freight cost, as well as gains from the disposal of its Pulau Indah land of RM8.3mn.
  • China will stop all seafood imports from Japanese, escalating tensions between the two nations as Japan begins a contentious release of treated wastewater from the wrecked Fukushima nuclear power plant.
  • Initial claims for state unemployment benefits in the US decreased by 10,000 to a seasonally adjusted 230,000 for the week ended Aug 19.
  • Leaders of the BRICS group of developing nations have invited Saudi Arabia, Iran, Ethiopia, Egypt, Argentina and the United Arab Emirates to join.

Source: TA Research - 25 Aug 2023

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