Review & Outlook

Easing bearish signals on technical momentum and trend indicators on the FBM KLCI following last week's rebound from a mid-week selloff to the 1,430 level implies there is buying support to cushion any near-term weakness in the local market. Meantime, further improvement in external sentiment, key to which will be easing of geopolitical risks from the Israel/Hamas conflict, and US Treasury yields to come off recent highs and reduce worries that global central bankers will keep interest rates higher for longer, will be crucial to aid recovery momentum ahead.

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 at 1,400, followed by 1,390, with the end June low of 1,370 acting as crucial support.

As for stocks to look forward to this week, key construction and property related lower liners like MRCB and UEM Sunrise could attract renewed buying interest given the positive technical momentum seen late last week, while export driven companies such as rubber glove and semiconductor counters such as Hartalega, Kossan Rubber, Supermax, Top Glove, SKP Resources and VS Industry could also attract buyers looking for recovery play given the weak ringgit currency which will improve export receipts.

News Bites

• Southern Steel Bhd said that it is not aware of any agreement that its major shareholder Hong Leong Group had entered into to divest its majority stake in the steel products manufacturer that would need to be disclosed to Bursa Malaysia.

• Ekovest Bhd is disposing of its entire stake in Ekovest Construction Sdn Bhd to Knusford Bhd for RM450.0mn, which will fund the acquisition through the issuance of new ordinary shares in Knusford at the proposed issue price of 60.0sen per share.

• Seremban Engineering Bhd has secured a contractor job worth RM161.8mn for a housing project in Genting Permai at Bentong, Pahang.

• Malakoff Corporation Bhd has proposed to acquire a 49% stake in solid waste management services company E-Idaman Sdn Bhd for a cash consideration of RM133.2mn.

• Meta Bright Group Bhd has proposed to diversify into the building materials trade through the acquisition of a 70% stake in a ready-mixed concrete manufacturing business in Sabah for RM28.0mn.

• Hextar Global Bhd has proposed to acquire a specialty chemicals company, Propel Chemicals Sdn Bhd, for RM16.5mn to expand its oil and gas specialty chemicals portfolio.

• Kossan Holdings (M) Sdn Bhd has emerged as the substantial shareholder in Luxchem Corporation Bhd, after acquiring a 0.569% stake and increasing its shareholding to 5.168%.

• Plytec Holding Bhd has secured a 42-month contract to set up a digital ecosystem in Sarawak.

• Ancom Nylex Bhd expects a sustained demand for its agricultural chemical products as the global emphasis on food security has led to a heightened focus on proper crop management among major crop growers.

• Axiata Group Bhd has appointed Mohamad Hafiz Kassim, the Chief Financial Officer of the Employees Provident Fund, as its non-independent and nonexecutive director.

• Berjaya Food Bhd will continue to offer more innovative vegan products moving forward, driven by the increasing trend of plant-based food consumption among Malaysians.

• Cengild Medical Bhd said the information technology system used by its wholly owned subsidiary Cengild Sdn Bhd was affected by a data breach that may have leaked patient data.

• YNH Property Bhd has come out to say that the qualified opinion issued by its external auditor is only limited to its joint venture and turnkey contracts for property development work.

• Khee San Bhd's has reported that its auditor has expressed doubts about its ability to continue operations as a going concern in its audited financial statements for the financial year ended 30 June 2023.

• CIMB Group Holdings Bhd's 92.5%-owned Indonesian arm, PT Bank CIMB Niaga Tbk saw its 9MFY23 profit before tax increase 25.8% YoY to IDR6.3tn.

• Axis Real Estate Investment Trust's 3QFY23 net profit declined 3.0% YoY to RM42.5mn mainly due to higher non-property expenses.

• CTOS Digital Bhd's 3QFY23 net profit grew 7.2% YoY to RM24.4mn as revenue expanded 25.7% YoY to RM66.5mn.

• Profits at China's industrial firms rose11.9% YoY in September on the back of a surprise 17.2% gain in August.

• The US core PCE price index rose 3.7% YoY in September, the smallest gain since May 2021, after increasing 3.8% in August.

Source: TA Research - 30 Oct 2023