TA Sector Research

Daily Market Commentary - 29 August 2023

Publish date: Tue, 29 Aug 2023, 10:39 AM

Review & Outlook

While Bursa Malaysia blue chips stayed range bound on Monday, shares in the property (+3.7%) and construction (+2.5%) sectors surged on hopes for major infrastructure development and policy tweaks to benefit the sectors. The FBM KLCI ended flat at 1,444.06 (-0.35) after moving within tight range bordering high of 1,445.31 and low of 1,441.78, as gainers led losers 580 to 478 on robust trade totaling 4.46bn shares worth RM2.85bn.

Blue chips are likely to extend current sideways trade, pending firmer leads on infrastructure projects or policy announcements to sustain the recent strong run-up in both the property and construction sectors. Immediate supports cushioning the index remains at the recent low of 1,433, then 1420/1,400, while looking ahead, a convincing breakout above the 1,464 high and 1,470 backed by stronger buying momentum should accelerate rise towards the 1,490/1,500 resistance level.

AMBank has returned to base building process with the 100-day ma (RM3.60) and 50%FR (RM3.52) to cushion downside, while a breakout above the 76.4%FR (RM3.82) and upper Bollinger band (RM3.90) should encourage a re-test of the 14/12/22 high (RM4.09) ahead. CIMB will need convincing breakout above the 24/11/22 high (RM5.76) to aim for the 123.6%FP (RM6.08) and 138.2%FP (RM6.28) going forward, while downside should be cushioned by the 76.4%FR (RM5.43).

News Bites

  • Malaysia's producer price index declined 2.3% YoY in July 2023.
  • UEM Sunrise Bhd's indirect wholly owned subsidiary UEM Sunrise South Africa Proprietary Ltd is disposing an 80.4% stake in Roc-Union Proprietary Ltd and claims of total shareholder advances for 118.4mn rand (RM29.5mn).
  • Oppstar Bhd emphasised that its recent joint venture with a Chinese national does not involve any party that have been sanctioned from accessing US technology.
  • Solarvest Holdings Bhd has secured a contract to install a 14MWp rooftop solar photovoltaic system at Toyo Tyre Malaysia Sdn Bhd's tyre manufacturing plant in Kamunting, Perak.
  • RGB International Bhd has refuted claims of political funding involvement in the 15th general election, asserting that the group only undertakes the outright sale of gaming machines and has no involvement or ownership in slot clubs in the country.
  • Ecobuilt Holdings Bhd is partnering TJ Civil & Structural Contractor Sdn Bhd to jointly build a 24-storey police office building in Kuala Lumpur for a contract sum of RM148.0mn.
  • Petronas Dagangan Bhd reported a 16.0% YoY increase in its net profit to RM275.7mn for the 2QFY23 supported by higher volume, mainly driven by resilient domestic demand and international travel.
  • IOI Properties Group Bhd's FY23 net profit rose 102.8% YoY to RM1.4bn, thanks to a 26.0% increase in operating profit in its property investment portfolio and a fair value gain that contributed RM716.8mn.
  • IJM Corporation Bhd's net profit jumped 201.3% YoY to RM100.6mn in the 1QFY24 mainly due to higher foreign exchange gains, and as revenue grew.
  • PMB Technology Bhd reported a 93.6% fall YoY in its net profit to RM2.1mn for the 2QFY23 as revenue fell on lower contribution from its metallic silicon plant due to a drop in selling price and tonnage sold.
  • Malaysian Pacific Industries Bhd's FY23 net profit declined 81.0% YoY to RM61.3mn while revenue fell by 15.0% YoY to RM2.0bn.
  • FGV Holdings Bhd recorded a net loss of RM12.9mn in the 2QFY23 versus a net profit of RM374.0mn last year largely due to lower profit registered in the plantation sector.
  • Sime Darby Property's 2QFY23 net profit fell 32.0% YoY to RM71.1mn on the back of higher share of loss from joint ventures.)
  • Malakoff Corporation Bhd registered a net loss of RM318.7mn as compared to net profit of RM119.1mn a year earlier due to substantial negative fuel margins of Tanjung Bin Power Sdn Bhd and Tanjung Bin Energy Sdn Bhd coal plants.
  • Mah Sing Group Bhd's net profit increased by 17.0% YoY to RM50.5mn in 2QFY23 on the back of higher property sales.
  • AirAsia X Bhd posted 2QFY23 net profit of RM5.5mn, compared to a massive net loss of RM652.5mn in the same period last year.
  • China will extend preferential income tax policies for foreigners working in the country through the end of 2027.

Source: TA Research - 29 Aug 2023

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