TA Sector Research

Daily Market Commentary - 13 Oct 2023

Publish date: Fri, 13 Oct 2023, 10:04 AM

Review & Outlook

The local blue-chip benchmark index rose on Thursday, following the broadly positive cues from regional markets, as investors cheered dovish Fed talk as well as reports that China is mulling fresh stimulus to boost slowing growth in the world's second-largest economy. The FBM KLCI gained 7.33 points to close at 1,443.82, off an early low of 1,437.96 and high of 1,446.06, as gainers beat losers 587 to 341 on steady turnover of 3.38bn shares worth RM2.02bn.

While sentiment has improved somewhat, stronger buying momentum and liquidity boost on the domestic market will be needed to promote sustained rise to higher ground. On the index, immediate overhead resistance stays at 1,450, with 1,465/1,470, and the 1,490/1,500 area acting as tougher upside hurdles. Immediate support remains at 1,400, with 1,390 and the end June low of 1,370 acting as crucial supports.

Maxis remains in base building mode at current levels, pending decisive breakout above the upper Bollinger band (RM4.20) to challenge the 16/ 6/23 peak (RM4.50), with next hurdle seen at the 123.6%FP (RM4.86), and key retracement support at the 50%FR (RM3.74). TM will need convincing breakout from consolidation, with a successful climb above the 50%FR (RM5.10) to aim for the 61.8%FR (RM5.26) and 76.4%FR (RM5.47) ahead, while key retracement support from the 23.6%FR (RM4.73) cushions downside.

News Bites

  • Malaysia's industrial production index inched down by 0.3% YoY in August 2023 as export-oriented industries declined, while the domesticoriented ones continued to expand.
  • IJM Corporation Bhd has bagged a RM1.1bn contract from Malaysia Rapid Transit System Sdn Bhd for the construction of an immigration, customs and quarantine complex for the Johor Bahru-Singapore Rapid Transit System Link project in Bukit Chagar, Johor.
  • Capital A Bhd is seeking a US$400.0mn (RM1.8bn) loan, half of it from private credit funds, to refinance debt, according to people familiar with the matter.
  • SAM Engineering & Equipment (M) Bhd plans to inject another RM200.0mn into its equipment business in Thailand in its current FY2024 and FY2025.
  • AMMB Holdings Bhd has obtained approval from Bank Negara Malaysia to establish the Basel III compliant AT1 and Tier 2 Subordinated Notes Programme.
  • Sime Darby Bhd has inked a MoU to collaborate with Gentari Sdn Bhd, Petroliam Nasional Bhd's clean energy subsidiary, to explore opportunities in building electric vehicle charging infrastructure and various other initiatives.
  • Dagang NeXchange Bhd has entered into a MoU with Strateq Sdn Bhd to collaborate on exploring opportunities in information technology, specifically big data and analytics.
  • Wasco Bhd is disposing of a piece of a freehold land measuring 18,363 sq metres in Klang, Selangor to Array Metal (M) Sdn Bhd for RM40.0mn.
  • KNM Group Bhd have sued Flavio Porro and Terence Tan Koon Ping, after KNM called off the disposal of Borsig to Vorsprung Industries GMBH for €220.8mn (RM1.1bn) in December 2022.
  • HIL Industries Bhd has entered into a conditional share sale agreement with Puan Sri Catherine Yeoh Eng Neo, Datuk Milton Norman Ng Kwee Leong and Konsep Kekal Sdn Bhd for the proposed acquisition of 100.0% equity interest in Broadwise Corporation Sdn Bhd for RM46.0mn.
  • Tomypak Holdings Bhd has received its shareholders' nod for the acquisition of a 70.0% stake in EB Packaging Sdn Bhd for RM73.5mn.
  • OpenSys (M) Bhd had accepted a Letter of Award with a contract value of RM105.0mn from Malayan Banking Bhd to process the bank's outward cheque clearing for all branches nationwide.
  • Eversendai Corporation Bhd has signed a MoU with Algihaz Holding Construction to magnitude and execute the upcoming mega projects in the Kingdom of Saudi Arabia.
  • The government is in negotiations to take over the entire stake in Boustead Naval Shipyard Sdn Bhd, which is in the midst of completing the long-delayed littoral combat ship project for the Malaysian navy.
  • M & A Equity Holdings Bhd has entered into a conditional share sale and purchase agreement for the proposed to acquire 75.0% equity interest in Value Partners Asset Management Malaysia Sdn Bhd for RM2.8mn cash.
  • Founder of CJ Century Logistics Holdings Bhd, Datuk Phua Sin Mo has emerged as a substantial shareholder of Kumpulan Kitacon Bhd with a 14.0% stake.
  • The US consumer price index rose 3.7% YoY in September while the core CPI gained 4.1% YoY in September after advancing 4.3% in August.

Source: TA Research - 13 Oct 2023

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