TA Sector Research

Daily Market Commentary - 16 Oct 2023

Publish date: Mon, 16 Oct 2023, 10:28 AM

Review & Outlook

The significant improvement in technical momentum indicators following last week's rebound indicated that the FBM KLCI may have further upside room this week but the cautious tone and new taxes in Budget 2024, especially the 2% points increase in service tax, could act as immediate term dampeners. Besides, the flaring of tensions between Israel and the Palestinian Islamist group Hamas could add uncertainty to markets and keep investors on the sidelines. Thus, strong follow-through buying momentum and further improvement in trading sentiment are vital to counter profit-taking pressures and support further gains ahead.

On the index, 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. Immediate support is fixed at 1,400, with 1,390 and the end June low of 1,370 acting as crucial supports.

As for the stock picks for the week, telco, technology and construction related stocks such as Maxis, TM, Globetronics, VS Industry, MRCB, and UEM Sunrise should attract bargain hunters to accumulate on weakness for recovery play.

News Bites

  • Malaysia's GDP is projected to grow within the range of 4% to 5% in 2024 while the fiscal deficit level is expected to reduce to 4.3% from 5.0% in 2023.
  • The Employees Provident Fund has raised its stake in TIME dotCom Bhd to 9.0% after acquiring a 1.5% stake of the group.
  • Hibiscus Petroleum Bhd has received conditional approval for its proposed acquisition of a 42.5% stake in Rapid Oil Production Ltd's licence for an undeveloped oil field known as Fyne Field.
  • RCE Capital Bhd has offered a total of 19,111.0k options to the eligible employees under the Employees' Share Option Scheme of the group at an option price of RM2.28 in accordance with the By-Laws of the group's ESS.
  • EG Industries Bhd's former non-executive chairman Keh Chuan Seng has ceased to be a substantial shareholder, after the disposal of his entire 6.0% indirect stake in June.
  • Hexza Corporation Bhd spent US$7.8mn (RM36.7mn) to acquire 185.0k shares in Nasdaq-listed robotics warehouse automation company Symbiotic Inc.
  • E.A.Technique (M) Bhd, a Practice Note 17 company, is said to be close to securing a new white knight.
  • One Glove Group Bhd plans to undertake a capital reduction of RM120.0mn to eliminate accumulated losses of the glove manufacturing company.
  • Dolphin International Bhd has decided not to proceed with a rights issue that it had proposed early this year for now.
  • IGB Real Estate Investment Trust's 3QFY23 net profit jumped 200.0% YoY to RM250.7mn while revenue rose 6.8% YoY to RM149.7mn.
  • China's outbound shipments in September declined 6.2% YoY, following a drop of 8.8% in August, and beating economists' forecast for a 7.6% fall.

Source: TA Research - 16 Oct 2023

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