Review & Outlook

With key technical momentum indicators turning up following recent strength and ability of the FBM KLCI to bounce back to five-month highs, an upside trigger is pending which needs to be a positive catalyst for further gains ahead. The stronger trading momentum, positive market breadth and renewed buying interest sustaining the robust recovery seen in property and construction stocks could spillover to the oil & gas, technology and blue-chip sectors as rotational buying stage a strong comeback. Meanwhile, last Friday's weaker US payrolls data which signaled rising unemployment and an easing in wage growth reinforced expectations that the Fed will keep interest rates steady at its September meeting, which should pacify investors and reduce jittery sentiment over further rate hikes.

As for the index, a breakout confirmation above 1,464 and 1,470 backed by strong buying momentum would be crucial to fuel rise towards the 1,490/1,500 resistance level, with next upside hurdles seen at 1,515, the 200-week moving average, and 1,552, which is the 50%FR of the 1,896 high (April 2018) to the 1,207 low (March 2020). Immediate chart supports cushioning downside are revised upwards to 1,440, then 1,433, and subsequently 1420/1,400.

On blue chips, key banking, gaming and telco counters such as AMBank, CIMB, Maybank, RHB Bank, Genting Berhad, Genting Malaysia, Axiata and CelcomDigi may attract renewed buying interest given their positive technical momentum indicators.

News Bites

• Malaysia rolled out its fourth industrial master plan, which aims to revitalise the country's manufacturing sector and increase its valueadded turnaround to RM587.5bn by 2030.

• The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index was unchanged at 47.8 in August, signalling that business conditions remained challenging for manufacturing firms.

• xFusion International Pte Ltd has chosen Malaysia to house its maiden global supply centre with an investment value of RM1.7bn for the next 3 years while NationGate Holdings Bhd has been appointed as its strategic partner.

• Hibiscus Petroleum Bhd and Ping Petroleum UK Plc have each entered into a separate but identical farm-in agreement to take over 42.5% equity interest each in Licence P2451 from Rapid Oil Production Ltd.

• WCE Holdings Bhd is targeting the 4 sections of the West Coast Expressway, which are currently in the construction phase, to be completed by the end of its current financial year, ending 31 March 2024.

• Solarvest Holdings Bhd has inked a memorandum of understanding on 1 September 2023 with Sarawak Foundation's subsidiary Centre for Technology Excellence Sarawak, Huawei Technologies (Malaysia) Sdn Bhd, and GreenBay CES Sdn Bhd in Beijing, China, towards fostering the hyperscale green data centre industry in Sarawak.

• MGB Bhd has entered into a memorandum of collaboration with Nordimpianti System S.R.L. and MCT Italy S.R.L. to cooperate on the utilisation of digital technology to improve the efficiency of machinery and optimising operations in the group's manufacture of IBS precast concrete products in Jeddah, Saudi Arabia.

• Artroniq Bhd has secured a RM9.6mn contract from Singapore's Kiddie Shoppe Pte Ltd to implement a customised e-commercial/retail software development project.

• Sersol Bhd said the functions of chief executive officer Datuk Wira Justin Lim Hwa Tat have been suspended with effect from 30 August 2023, for showing insubordination and failing to act as a responsible CEO.

• UOB Malaysia introduced U-Drive, a financing solution for the electric vehicle ecosystem in Malaysia, earlier this week to drive EV adoption in the country.

• Serba Dinamik Holdings Bhd said it was unable to release its quarterly report for the 4QFY23 by 31 August 2023 as required under the Main Market Listing Requirements but said it expects to submit the quarterly report by 8 September 2023.

• Nestlé (Malaysia) Bhd is appointing Tan Sri Wan Zulkiflee Wan Ariffin as its independent, non-executive director effective 1 October 2023.

• Matrix Concepts Holdings Bhd has appointed Kelvin Lee Chin Chuan, the son of its group executive deputy chairman, as its non-independent and non-executive director effective 1 September 2023.

• China's Caixin manufacturing purchasing managers' index rose to 51 last month, the highest reading since February, and well above economists' estimates.

• The US nonfarm payrolls increased by 187,000 jobs last month, sharply down from the monthly average gain of 271,000 over the past 12 months, while unemployment rose unexpectedly to 3.8%.

Source: TA Research - 4 Sept 2023