TA Sector Research

Daily Market Commentary - 4 Oct 2023

Publish date: Wed, 04 Oct 2023, 10:28 AM

Review & Outlook

The local market remained in narrow range bound trade on Tuesday, with most investors sidelined amid Budget tax uncertainties and global growth and inflation worries. The FBM KLCI settled up 1.25 points at 1,420.01, after moving between opening low of 1,417.94 and high of 1,424.11, as losers beat gainers 545 to 401 on higher turnover of 3.22bn shares worth RM2.21bn.

Stocks should continue drifting sideways amid cautious trading sentiment with concerns over potential Budget tax proposals and global growth uncertainties. Immediate index support is retained at 1,400, with 1,390 and the end June low of 1,370 acting as stronger supports. Immediate overhead resistance is at 1,450, with 1,465/ 1,470, and the 1,490/1,500 area as tougher upside hurdles.

Any weakness on Axiata shares toward the key support area at RM2.30 to 13/10/22 low (RM2.20) would be attractive to bargain for rebound upside towards the 23.6%FR (RM2.58), with the 200-day ma (RM2.76) as next hurdle. CelcomDigi will need breakout confirmation above the upper Bollinger band (RM4.51) to fuel upside momentum towards the 150%FP (RM4.68) and 161.8%FP (RM4.82) ahead, with uptrend support from the 200-day ma (RM4.21) cushioning downside.

News Bites

  • Malaysia is maintaining its 2023 gross domestic product (GDP) growth forecast of 4% to 5%, said Deputy Finance Minister I Datuk Seri Ahmad Maslan.
  • Malaysia is counting on its plan to cut subsidies next year to help narrow the budget deficit, giving the government room to avoid resorting to "too many taxes," according to Economy Minister Rafizi Ramli.
  • Malaysia Airports Holdings Bhd saw 11.2mn total passenger movement in August for both its Malaysian and Turkish airport networks.
  • AirAsia Bhd has accepted a five-year term loan of up to US$150mn (RM705mn) from a financial institution for working capital requirements and fund aircrafts and engine maintenance costs.
  • The proposed sale of a 33% stake in Boustead Plantations Bhd by the Armed Forces Fund Board and Boustead Holdings Bhd to Kuala Lumpur Kepong Bhd is still on the table, according to both BPlant and KLK.
  • Kretam Holdings Bhd has raised its stake in Bahvest Resources Bhd to 12.2% or 151.5mn shares, after a series of transactions on Bursa Malaysia.
  • Cuscapi Bhd has been served with claims of RM20mn by its former CEO Her Chor Siong over alleged defamatory statements it made back in 2018.
  • Netx Holdings Bhd has entered into a partnership with Saudi Cold Storage Sdn Bhd, a unit of Saudee Group Bhd, in a venture into the fast-food consumer market in Malaysia.
  • Reservoir Link Energy Bhd said its 51%-owned unit Founder Group Ltd is considering a listing on the US stock exchange Nasdaq.
  • Cansino Biologics (Hong Kong) Ltd has emerged as the second largest shareholder of Solution Group Bhd, with a 9.1% stake after it subscribed to 44mn Solution Group shares at 19.5 sen or RM8.6mn via private placement.
  • SSF Home Group Bhd's initial public offering has been oversubscribed by 8.25 times ahead of its listing on the ACE Market of Bursa Malaysia Securities Bhd.
  • Job openings in the US jumped 690,000 to 9.610mn on the last day of August, the Labor Department said.

Source: TA Research - 4 Oct 2023

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