TA Sector Research

Daily Market Commentary - 02 October 2023

Publish date: Mon, 02 Oct 2023, 09:51 AM

Review & Outlook

Technical momentum and trend indicators on the FBM KLCI have turned bearish decisively due to last Friday's selloff to end at a one-month low, implying further downside potential to retest stronger key chart supports. Sentiment-wise, worries over potential capital gains or other forms of taxes in the upcoming Budget proposals, and hawkish stance from the US Federal Reserve and other major central bankers forcing global interest rates to stay higher-for-longer would remain key market dampeners.

On the index, immediate support will need to be revised down to 1420/ 1,400, with 1,390 and the end June low of 1,370 acting as stronger supports. Immediate overhead resistance is also revised lower to 1,450, with 1,465/1,470, and the 1,490/1,500 area as tougher upside hurdles.

On stock picks, lower liner oil & gas and construction related counters such as Bumi Armada, Hibiscus Petroleum, Velesto, Wasco, Gadang, Hiap Teck, Sunway Construction and WCT Holdings should continue to attract investors given the strong global oil price trend and infrastructure plays.

News Bites

  • Malaysia's international reserves amounted to US$112.46bn at the end of August 2023.
  • Bank Negara Malaysia expects the country's export growth to remain in contraction in the near term, albeit at a milder pace as downside risks remain, stemming from weaker external demand.
  • The High Court has dismissed a RM139.3mn suit filed by Mad Labs Sdn Bhd to a wholly-owned unit of Nestle (Malaysia) Bhd, Nestle Products Sdn Bhd, over unauthorised or unlawful use of its quick response code on Nestle's products and packaging.
  • UEM Sunrise Bhd has completed the issuance of RM350.0mn in nominal value Islamic medium-term notes.
  • Reservoir Link Energy Bhd's 51.0%-owned subsidiary Founder Energy Sdn Bhd received a letter of award worth RM21.0mn from Samaiden Sdn Bhd for subcontract works of a 50MWac large scale solar photovoltaic plant at Sungai Petani.
  • Progressive Impact Corporation Bhd is buying Mérieux NutriSciences Malaysia Sdn Bhd for RM8.0mn.
  • Grant Thornton Malaysia has resigned as the auditor for Lotus KFM Bhd as both parties are unable to reach a resolution on audit fees and disbursements.
  • CelcomDigi Bhd has announced the resignation of Jorgen Christian Arentz Rostrup as the group's deputy chairman, effective Oct 1, 2023, due to a re-assignment of duties in Telenor ASA.
  • IHH Healthcare Bhd's group chief financial officer Joerg Ayrle will be on garden leave from Sept 30, 2023 until the expiry of his employment contract in Malaysia on Jan 31, 2024.
  • AirAsia X Bhd has appointed Datuk Seri Mohammed Shazalli Ramly as its new non-executive director effective last Friday.
  • Malaysia Airports Holdings Bhd has appointed Gordon Andrew Stewart as chief operating officer for airport operations in Malaysia effective Oct 1, 2023.
  • Real Estate and Housing Developers Association chairman Datuk Jeffrey Ng Tiong Lip has been appointed as non-executive independent director of Capitaland Malaysia Trust with effect from Oct 1.
  • Sunway Bhd, and in turn its founder and executive chairman Tan Sri Jeffrey Cheah Fook Ling, have ceased to be a substantial shareholder of construction giant IJM Corporation Bhd following a 0.08% stake disposal.
  • Eastern & Oriental Bhd's executive chairman Datuk Tee Eng Ho and his brother, executive director Tee Eng Seng, raised their stake in the property developer to 50.4%.
  • ITMAX System Bhd's non-independent executive director Datin Afinaliza Zainal Abidin has disposed of a 7.0% stake in the smart city integrated city system solution provider for RM122.2mn.
  • Jentayu Sustainables Bhd saw its chief executive officer cease to be the group's substantial shareholder after disposing of 8.0mn shares via a direct business transaction.
  • MMAG Holdings Bhd has ceased to be a major shareholder of CSH Alliance Bhd after divesting of its entire 229.5mn shares or 16.6% stake in CSH, together with 194.5mn warrants, for RM37.4mn cash.
  • Yinson Holdings Bhd's net profit for 2QFY24 climbed 60.8% YoY higher to RM230.0mn from RM143.0mn a year ago, on the back of higher profit from its operations.
  • The Caixin/S&P Global manufacturing purchasing managers' index fell to 50.6 in September from 51.0 in the previous month, missing analysts' forecasts of 51.2.
  • Last gasp moves to prevent a US government shutdown took a dramatic step forward Saturday, as Democrats overwhelmingly backed an eleventhhour Republican measure to keep federal funding going for 45 days.

Source: TA Research - 2 Oct 2023

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