Review & Outlook

Stocks recovered on Tuesday, in line with firmer regional markets as investors were encouraged by diplomatic efforts from the U.S. and its allies to contain the crisis in Gaza. The KLCI rose 5.17 points to close at the day's high of 1,444.13, off an early low of 1,438.95, as gainers edge losers 439 to 353 on total turnover of 2.68bn shares worth RM1.91bn.

Even as stocks edge higher, underlying caution over Middle East geopolitical risk and uncertainty over the interest rate hike should keep buyers in check. On the index, immediate overhead resistance remains at 1,450, with 1,465/1,470, and the 1,490/1,500 area acting as tougher upside hurdles. Immediate support stays s at 1,400, with 1,390 and the end June low of 1,370 acting as crucial supports.

Duopharma shares will need confirmed breakout above the 50%FR (RM1.34) to extend uptrend towards the 38.2%FR (RM1.42), with higher upside targets at the 23.6%FR (RM1.50) and the peak of 27/12/22 (RM1.65) ahead. Uptrend support from the 76.4%FR (RM1.18) limits downside risk. Pharmaniaga needs convincing breakout above the 61.8%FR (51sen) to target the 76.4%FR (58sen), with the peak of 01/08/22 (69sen) as higher upside hurdles going forward. Key retracement supports from the 38.2%FR (40sen) and 23.6%FR (33sen) cushions downside.

News Bites

• The government will publish a mid-term review of Budget 2024 implementation next year, in line with the recently passed Public Finance and Fiscal Responsibility Act 2023 in the Dewan Rakyat.

• The Penang Development Corporation has decided to terminate its controversial collaboration agreement with Umech Land Sdn Bhd, a 70%-owned subsidiary of Sunway Bhd, for the development of Batu Kawan Industrial Park 2.

• Digital Nasional Bhd, Telekom Malaysia Bhd and ZTE Corporation have jointly unveiled the world's fastest 5G live trial with speeds up to 28Gbps.

• Maxis Bhd and Digital Penang signed a memorandum of understanding to develop a technology ecosystem in the micro, small and medium enterprise segment in Penang.

• Straits Energy Resources Bhd's indirect subsidiary, Straits CommNet Solutions Sdn Bhd, has secured a RM71.6mn contract from Teras Khidmat Niaga Sdn Bhd, to carry out works as part of a project for Jabatan Kerja Raya Malaysia.

• AE Multi Holdings Bhd is planning to consolidate every 10 existing shares held by its shareholders into one share on an entitlement date to be determined later.

• Eversendai Resources Bhd's wholly owned subsidiary has entered into a partnership with Saudi Arabia-based Algihaz to form a JV company to execute structural steel projects in Saudi Arabia.

• PMB Technology Bhd has proposed to dispose of a piece of leasehold land in Klang for RM36.6mn in a non-related party transaction to an individual named Ong Saut Mee.

• Central Global Bhd has secured a RM15.2mn sub-contract to supply plant, machinery, labour and material for a water supply construction project in Lahad Datu, Sabah.

• Sunsuria Bhd has inked a partnership with Island Hospital Sdn Bhd to open its first cancer centre in Penang.

• REDTone Digital Bhd and UK-based Informed Solutions have partnered to offer digital transformation platforms and solutions powered by artificial intelligence to supercharge Malaysia's digital agenda.

• Minox International Group Bhd will pass on cost increases stemming from the 2% hike in service tax to its customers.

• MyEG Services Bhd said it has received a two-year extension of its immigration-related services contract, but has to complete a system enhancement before being allowed to resume accepting applications for the services.

• ARB Bhd intends to distribute the bulk of its 94.6% stake in its Nasdaqlisted subsidiary, ARB IOT Group Ltd, to its shareholders through a dividend-in-specie.

• The value of retail purchases in the US, unadjusted for inflation, increased 0.7%, after an upwardly revised 0.8% gain in August

Source: TA Research - 18 Oct 2023