TA Sector Research

Daily Market Commentary - 18 September 2023

Publish date: Mon, 18 Sep 2023, 10:31 AM

Review & Outlook

Last Friday's strong rebound on the FBM KLCI backed by robust buying momentum showed promise, which could generate follow-through upside momentum for an escape from the current range bound profit-taking consolidation. Clearly, positive catalysts from policy or contract announcements will be key to spark the breakout needed to sustain further near-term upside momentum. Meanwhile, the oil & gas sector should rebound as global crude oil prices climb past the USD90/barrel level, and increasing optimism further stimulus by China's central government will aid recovery for the world's second largest economy from the current bad patch should spillover to boost local sentiment.

On the index, immediate overhead resistance stays at 1,465, then 1,470, with the 1,490/1,500 area as next resistance, and stronger upside hurdles seen at 1,514, 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 support cushioning downside is still at 1,440, followed by 1,433, with subsequently 1420/1,400 acting as stronger supports.

As for stock picks, technology, oil & gas and property related lower liners like Aemulus, Globetronics, DNEX, Hibiscus, MRCB and UEM Sunrise should continue to attract bargain hunters looking for rotational sector plays ahead.

News Bites

  • Malaysia and China have inked 3 Memoranda of Understanding worth RM19.8bn.
  • Ramsay Health Care Ltd has announced that a sale process has commenced resulting in the receipt of a number of non-binding indicative offers for Ramsay Sime Darby Health Care Sdn Bhd, its joint venture with Sime Darby Bhd.
  • Norges Bank, the central bank and sovereign wealth fund manager of Norway, has emerged as a substantial shareholder in Cahya Mata Sarawak Bhd with a 5.03% stake.
  • Allianz Malaysia Bhd has launched 3 more products under the Rahmah Insurance Initiative which addresses affordable insurance solutions for private cars and life insurance.
  • S P Setia Bhd had over the weekend launched Banyan, comprising 113 units of freehold double-storey terraced homes, in its Setia EcoHill 2 township development in Semenyih, Selangor.
  • Astro Malaysia Holdings Bhd has entered into an asset purchase agreement with Basecamp Films Sdn Bhd to offer post-production services in the country.
  • Hibiscus Petroleum Bhd's wholly owned subsidiary, Anasuria Hibiscus UK Ltd, has entered into a deal with Ithaca Oil and Gas Ltd and Caldera Petroleum UK Ltd for the joint development of the Marigold fields in the North Sea.
  • Mestron Holdings Bhd aims to expand its biogas plant capacity from 2.4MW to 3.2MW in the next 2 to 3 years.
  • In response to a query from Bursa Malaysia, UEM Sunrise Bhd said the sale a 4.01-acre plot in Kiara Bay to Melati Ehsan Holdings Bhd will enable the group to monetise the land at its current market value while allowing it to retain control over the land's development via a development rights agreement with Melati Ehsan.
  • Solid Automotive Bhd is disposing a 4.0-hectares parcel of land in Johor Bahru to Ferrotec Power Semiconductor Malaysia Sdn Bhd for RM48.0mn.
  • Rapid Synergy Bhd is selling a parcel of land in Manjung, Perak, measuring 303,487 sq ft to Yokado Sdn Bhd for RM22.9mn cash.
  • Fertility care specialist Alpha IVF Group Bhd is planning an initial public offering on the ACE Market on Bursa Malaysia to fund new medical centres, as well as expand and upgrade its existing ones.
  • Evergreen Max Cash Capital Bhd announced that its initial public offering has been oversubscribed by 53.1 times by the Malaysian public.
  • Handal Energy Bhd is planning to undertake a RM90.0mn capital reduction to eliminate its accumulated losses, followed by a private placement involving up to 40% of its issued shares to raise RM9.7mn.
  • KKB Engineering Bhd's 60.81%-owned OceanMight Sdn Bhd has initiated arbitration proceedings against Shapadu Energy Services Sdn Bhd, which it subcontracted to undertake certain hook-up and commissioning projects in Sarawak, to resolve a dispute between them over said projects.
  • OneTech Solutions Holdings Bhd has dismissed its major shareholder's requisition for an extraordinary general meeting to vote on 4 resolutions.
  • China's industrial output and retail sales grew 4.5% YoY and 4.6% YoY respectively in August.
  • Preliminary data released by the University of Michigan on Friday showed consumer sentiment in the U.S. deteriorated to 67.7 in September from 69.5 in August.

Source: TA Research - 18 Sept 2023

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