TA Sector Research

Daily Market Commentary - 21 September 2023

Publish date: Thu, 21 Sep 2023, 09:31 AM

Review & Outlook

The local market traded lower on Wednesday, matching weaker regional peers after China left benchmark lending rates unchanged and investors await the keenly anticipated US Federal Reserve decision on interest rates. The FBM KLCI fell 6.1 points to close at 1,451.56, off an early low of 1,450.37 and high of 1,456.77, but gainers led losers 537 to 423 on lower turnover of 3.55bn shares worth RM2.51bn.

Stocks should extend sideways trade as investors digest the US Federal Reserve's interest rate decision, amid worries the firm oil price trend will keep inflation elevated. Immediate index support cushioning downside stays at 1,440, followed by 1,433, with subsequently 1420/1,400 acting as stronger supports. Immediate overhead resistance remains at 1,465, then 1,470, with the 1,490/1,500 area as next resistance.

Supermax need breakout confirmation above 88sen to fuel further upside towards 96sen and the 10/4/23 high (RM1.03), while the lower Bollinger band (75sen) cushions downside risk. Top Glove will need convincing breakout above the 200-day ma (90sen) to promote further recovery towards 95sen and RM1.10 ahead, with downside similarly cushioned by the lower Bollinger band (74sen).

News Bites

  • Hong Leong Bank Bhd has lodged a multi-currency programme for the issuance of medium-term notes and commercial papers of up to RM10bn each or its equivalent in other currencies in nominal value with the Securities Commission Malaysia.
  • Capital A Bhd's wholly owned subsidiary Asia Digital Engineering Bhd has entered into a 60% joint venture agreement with Sivilai Asia Co Ltd to establish a maintenance, repair and overhaul business in Cambodia.
  • The import ban on Supermax Corporation Berhad's disposable gloves since October 2021 in the US has been lifted from 18 September 2023.
  • Eco World International Bhd intends to declare even more dividends (expected to exceed RM900mn or estimated around 38sen/share) moving forward due to lower working capital requirement.
  • Central Global Bhd's wholly-owned unit Proventus Bina Sdn Bhd has commenced a legal suit against Tang Kae Shih for outstanding payments related to a residential apartment contract in Penang worth RM42.2mn.
  • Opcom Holdings Bhd is buying a 18.0% stake in ACE Market-listed Binasat Communications Bhd from the latter's managing director Na Boon Aik for RM39.2mn or 56sen/share as part of its venture into the satellite telecommunications business.
  • Rhong Khen International Bhd (formerly Latitude Tree Holdings Bhd) has entered into a memorandum of understanding with PTT Synergy Group Bhd (formerly known as Grand Hoover Bhd) to collaborate in establishing a system pallet business
  • PTT Synergy Group Bhd has diversified into the warehouse leasing business as it seeks alternative sources of revenue from recurring income properties.
  • MN Holdings Bhd has bagged a substation engineering contract worth RM18.5mn for GDS data centre (Plot 2) at Nusajaya Technology Park, Johor.
  • Harvest Miracle Capital Bhd, has proposed to dispose of 40% stake in its wholly-owned subsidiary Viewnet Computer System Sdn Bhd for RM14mn to Basetex Sdn Bhd in a related party transaction.
  • PRG Holdings Bhd's 50.5%-owned subsidiary Furniweb Holdings Ltd is disposing of its entire stake in loss-making Meinaide Holdings Group Ltd to Omen Wealth Ltd for HKD15mn (RM8.9mn) cash.
  • Minox International Group Bhd, en route to list on the ACE Market of Bursa Malaysia on 17 October, aims to raise RM22.5mn via the issuance of 90mn shares at an issue price of 25sen/share.
  • Cypark Resources Bhd's co-founder and group chief executive officer Datuk Daud Ahmad has ceased to be the substantial shareholder of the group, after he disposed of 6mn shares worth RM5.4mn on 19 September 2023.
  • CB Industrial Product Holding Berhad said Yacktman Asset Management LP has ceased to be its substantial shareholder after disposing of 1.1mn shares.
  • China kept the one-year and five-year loan prime rate at 3.45% and 4.20% respectively, unchanged at a monthly fixing on Wednesday, in line with expectations.
  • The Federal Reserve left its benchmark interest rate unchanged while signaling borrowing costs will likely stay higher for longer after one more hike this year.

Source: TA Research - 21 Sept 2023

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