TA Sector Research

Daily Market Commentary - 10 Oct 2023

Publish date: Tue, 10 Oct 2023, 09:58 AM

Review & Outlook

Bursa Malaysia shares struggled for direction on Monday as firmer global oil prices sparked by renewed conflict in the Middle East was overshadowed by worries over taxes in the Budget 2024 proposals this Friday. The FBM KLCI ended flat at 1,417.26 (+0.38) after ranging between early high of 1,420.71 and low of 1,415.8, as losers beat gainers 500 to 343 on muted trade totaling 2.87bn shares worth RM1.78bn.

Trading should be choppy given fresh geopolitical tensions in the Middle East which should lift oil & gas related stocks, while the broader market extend range bound trade amid caution ahead of Budget day. On the index, immediate support is at 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 acting as tougher upside hurdles.

Globetronics need to rebuild support at current levels for eventual recovery above the upper Bollinger band (RM1.55) and aim for the 61.8%FR (RM1.63) and 76.4%FR (RM1.79) ahead, while the 38.2%FR (RM1.37), matching the 100-day ma, cushions downside. VSI will need breakout confirmation above the 50%FR (RM1.04) to fuel upside momentum towards the 61.8%FR (RM1.11) and 76.4%FR (RM1.19) going forward, while the 100-day ma (89sen) and 200-day ma (88sen) limits downside risk.

News Bites

  • PETRONAS Chemicals Group Bhd says it will construct Asia's largest advanced chemical recycling plant in Pengerang, Johor, with a capacity of 33kT per annum.
  • Alliance Bank Malaysia Bhd is acquiring 24 floors of office suites in Jalan Ampang, Kuala Lumpur, from Oxley Rising Sdn Bhd for RM405.8mn.
  • The Finance Ministry has agreed to provide a government guarantee for the Armed Forces Fund Board to take out a RM2bn loan to undertake the general offer it proposed to privatise its 68%-controlled Boustead Plantations Bhd at RM1.55 per share.
  • Rapid Synergy Bhd is proposing to dispose of 1,338 sq metres of freehold land in Desa Sri Hartamas, Kuala Lumpur, to Segi Permai Sdn Bhd for RM32.4mn.
  • Dagang NeXchange Bhd expects to expand its revenue through the introduction of its new TradeSwift DagangNet superapp, developed by its wholly-owned unit Dagang Net Technologies Sdn Bhd.
  • T7 Global has secured a contract award worth RM21.2mn from Tenaga Nasional Bhd.
  • Luster Industries Bhd has proposed to undertake a RM50mn capital reduction via cancellation of its paid-up share capital to eliminate its accumulated losses.
  • AWC Bhd has decided to exercise its call option to buy the rest of rail specialist Trackwork & Supplies Sdn Bhd it does not own for RM5.5mn.
  • Catcha Digital Bhd's wholly-owned subsidiary iMedia Asia Sdn Bhd will be making equity acquisitions in two companies that are expected to improve the profitability of the group.
  • MAA Group Bhd intends to vote in favour of retaining the current KNM directors, and vote against the appointment of new candidates at KNM's EGM scheduled to be held on Oct 16.
  • Hengyuan Refining Co Bhd has appointed Yin Lujiang as chief executive officer of the petroleum products refining and manufacturing group, effective immediately.
  • Datuk Seri Mahmud Abu Bekir Taib, the son of Sarawak Yang di-Pertua Negeri Tun Abdul Taib Mahmud, has emerged as a substantial shareholder of KNM Group Bhd after acquiring 203.5mn shares or a 5% stake.
  • China aims to boost the country's aggregate computing power by more than 50% by 2025.
  • Treasury Secretary Janet Yellen said the US is preparing to crack down on evasion of the Group of Seven's price cap on Russian oil.
  • Top Federal Reserve officials are coalescing around the idea that tighter financial conditions after a recent surge in US Treasury yields may substitute for additional increases in their benchmark interest rate.

Source: TA Research - 10 Oct 2023

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