TA Sector Research

Daily Market Commentary - 29 September 2023

Publish date: Fri, 29 Sep 2023, 10:23 AM

Review & Outlook

Stocks ended lower on Wednesday, as investors further took profits following Wall Street's overnight fall as weaker economic data raised recession worries, and concerns over capital gains taxes in the coming Budget kept investors sidelined ahead of a local religious public holiday. The FBM KLCI slid 5.44 points to close at 1,440.11, off an early low of 1,436.75 and high of 1,441.87, as losers beat gainers 572 to 341 on lower turnover of 2.97bn shares worth RM1.94bn.

The local market should continue trading sideways with downward bias ahead of the weekend, with worries over taxes in the coming Budget and global interest rates stuck at higher levels discouraging investor commitments. Immediate index support cushioning downside remains at 1,440, followed by 1,433, with subsequently 1420/1,400 acting as stronger supports. Immediate overhead resistance stays at 1,465, then 1,470, with the 1,490/ 1,500 area as next resistance.

Bumi Armada need to sustain above the 61.8%FR (57sen) to enhance recovery potential towards the 76.4%FR (63sen), with next major upside hurdle seen at the 7/3/23 peak (73sen), while key retracement support at the 50%FR (52sen) cushions downside. Hibiscus will need to climb above the 50%FR (RM1.10) decisively to boost upside momentum towards the 61.8%FR (RM1.18) and 76.4%FR (RM1.28) ahead, while the 38.2%FR (RM1.02) and 200-day ma (99sen) limit downside risk.

News Bites

  • Malaysia's palm oil production is likely to rise next year as more plentiful labour and the maturation of plantations for harvesting offset the impact of the El Nino weather pattern, the Malaysian Palm Oil Board said.
  • Sunway Bhd's 70.0%-owned Umech Land Sdn Bhd has signed a joint development agreement with Penang Development Corporation to develop a 559-acre prime industrial land in Batu Kawan, Penang, in exchange for a land entitlement of RM646.0mn.
  • Sapura Energy Bhd has secured a USD300.0mn (RM1.4bn) contract from Azule Energy Angola BV for a gas complex in Angola.
  • Kerjaya Prospek Group Bhd has bagged a RM203.1mn contract from Samsung-KP JV, a consortium comprising KERJAYA and Samsung C&T (KL) Sdn Bhd.
  • Sime Darby Plantation Bhd has partnered with Godrej Agrovet Ltd to make a pivotal step towards enhancing India's role as a major vegetable oil producing country.
  • KPJ Healthcare Bhd has launched its first mobile clinic in Kota Kinabalu, Sabah, to provide quality healthcare services to people.
  • Capital A Bhd has formed a strategic partnership with Garuda Indonesia Group, the national flag carrier of Indonesia, to explore opportunities for network expansion across various business lines.
  • Tan Sri Lim Kang Hoo has proposed to reorganise and merge Ekovest Bhd, Knusford Bhd, Iskandar Waterfront Holdings Sdn Bhd and Iskandar Waterfront City Bhd.
  • Pensonic Holdings Bhd's managing director Vincent Chew Chuon Ghee is no longer a substantial shareholder of the electrical home appliances maker, having disposed of a 3.2% stake in the group for RM3.0mn on Sept 25.
  • Perak State Development Corporation has decided to transfer its rights in a 100-acre piece of leasehold agriculture land in Temelong, Perak to Practice Note 17 company Perak Corporation Bhd's indirect 89.5%- owned subsidiary Casuarina Meru Sdn Bhd.
  • Bursa Malaysia has reprimanded Saudee Group Bhd for breaching the main market listing requirements.
  • Berjaya Land Bhd has rectified its public shareholding spread in accordance with Bursa Malaysia's approved minimum requirement of 20%, ahead of its Sept 30 deadline.
  • Artroniq Bhd inked a distribution agreement with Indonesia-based PT Terang Dunia Internusa's electric motorcycle brand United E-Motor to be the exclusive distributor of the brand in Malaysia.
  • Jiankun International Bhd plans to raise RM19.0mn through a placement of 95.0mn shares to third-party investors at an issue price of 20sen/ share.
  • Censof Holdings Bhd has secured a contract worth RM0.9mn from Social Security Organisation.
  • TWL Holdings Bhd has proposed to undertake a private placement of up to 10.0% of its issued shares to raise up to RM23.5mn, mainly to fund the group's development costs of 715 units of affordable housing.
  • China is expected to achieve economic growth of slightly more than 5% this year, Wang Yiming, a member of the Monetary Policy Committee of the People's Bank of China said.
  • Chinese industrial profits rose 17.2% YoY in August, for the first time in more than a year, a further sign the economy is stabilising.

Source: TA Research - 29 Sept 2023

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