TA Sector Research

Daily Market Commentary - 3 Oct 2023

Publish date: Tue, 03 Oct 2023, 11:15 AM

Review & Outlook

Bursa Malaysia shares dropped further on Monday, dragged down by profit-taking in key utility, plantation, property and construction stocks. The FBM KLCI fell 5.41 points to end at the day's low of 1,418.76, off an early high of 1,428.04, as losers swarmed gainers 632 to 285 on total turnover of 3.01bn shares worth RM1.8bn.

The local market should drift sideways to lower on bearish technical indicators and weak trading sentiment amid Budget tax concerns and growth worries as global growth momentum deteriorates. Immediate index support is reset lower to 1,400, with 1,390 and the end June low of 1,370 acting as stronger supports. Immediate overhead resistance is retained at 1,450, with 1,465/1,470, and the 1,490/1,500 area as tougher upside hurdles.

AMBank remains in base building mode above the 61.8%FR (RM3.65) support, pending decisive breakout above the 76.4%FR (RM3.82) to enhance upside potential for re-test of the 14/12/22 peak (RM4.09), with next key hurdle from the 123.6%FP (RM4.36). Further weakness on CIMB shares towards key retracement support from the 76.4%FR (RM5.27) or 200-day ma (RM5.20) would be very attractive to bargain for rebound upside towards the 20/9/23 high (RM5.64), with next key resistance seen at the 123.6%FP (RM5.90).

News Bites

  • The seasonally adjusted S&P Global Malaysia PMI posted 46.8 in September, down from 47.8 in August.
  • The World Bank reduced its forecast for Malaysian economic growth to 3.9% this year from 4.3% projected previously, amid substantial deceleration in external demand.
  • AMMB Holdings Bhd and MetLife International Holdings LLC are proposing to divest their jointly owned insurance and Takaful businesses to Great Eastern for approximately RM1.1bn.
  • The proposed disposal of a 33% stake in Boustead Plantation Bhd by the Armed Forces Fund Board and Boustead Holdings Bhd to Kuala Lumpur Kepong Bhd has fallen through, sources told The Edge.
  • Nestle (Malaysia) Bhd has inked a memorandum of understanding with the Malaysian Cocoa Board to promote sustainable and responsible sourcing, as well as the adoption of regenerative agriculture practices by farmers.
  • Astro Malaysia Holdings Bhd said it will close down its home shopping business under "Go Shop" from Oct 11, citing "challenging overall economic landscape and the changes in consumer shopping behaviour".
  • Malaysia Building Society Bhd has completed the acquisition of the entire stake in Malaysian Industrial Development Finance Bhd from Permodalan Nasional Bhd.
  • Kimlun Corporation Bhd has secured two contracts totalling RM140.2mn from Eco World Development Group Bhd in Johor.
  • Epicon Bhd has secured an underground cable works contract from Ibrahim & Sons Engineering Sdn Bhd for RM130.9mn.
  • Econpile Holdings Bhd has secured a contract worth RM101.3mn from Suriamega Development Sdn Bhd to undertake the substructure works for three blocks of small office/home office.
  • Pestech International Bhd has received a letter of award from Tenaga Nasional Bhd for the supply and delivery of 79,800 units of Single Phase Radio Frequency smart meters.
  • Straits Energy Resources Bhd has proposed to list its oil bunkering and shipping-related services segment on the NASDAQ stock exchange via a public offering.
  • Mi Technovation Bhd is undergoing a major restructuring as its founder and group chief executive officer Oh Kuang Eng will be leading a new management team in the group's semiconductor division.
  • Muar Ban Lee Group Bhd has increased its stake in SWS Capital Bhd, after it acquired a total of 15.5mn or 5.6% stake worth RM5.9mn.
  • Hektar Asset Management Sdn Bhd, the manager of Hektar Real Estate Investment Trust, has teamed up with GMA Resources Sdn Bhd for the installation of electric vehicle charging bays at its malls.
  • Opcom Holdings Bhd has emerged as the new single largest shareholder of Binasat Communications Bhd after it bought 70.0mn shares, representing an 18.0% stake in the satellite network support service provider.
  • Sunsuria Bhd said OCBC Bank (Malaysia) Bhd has granted an additional limit of RM120.0mn to its 51.0%-owned subsidiary Bangsar Hill Park Development Sdn Bhd, bringing its total credit facilities to RM420.5mn.
  • Japan's PMI slowed slightly to 48.5 last month from 49.6 in August.
  • The Institute of Supply Management said its manufacturing PMI rose to 49.0 in September from 47.6 in August.

Source: TA Research - 3 Oct 2023

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