TA Sector Research

Daily Market Commentary - 31 Oct 2023

Publish date: Tue, 31 Oct 2023, 09:33 AM

Review & Outlook

Bursa Malaysia shares drifted lower on Monday, with most investors sidelined amid concerns over potential worsening of the Israel/Hamas conflict, and ahead of key central bank meetings and economic data releases. The FBM KLCI slid 2.7 points to close at 1,439.20, off an early high of 1,441.80 and low of 1,436.98, as losers swarmed gainers 624 to 238 on muted trade totalling 2.81bn shares worth RM1.51bn.

The local market should trade sideways with downward bias given the cautious sentiment amid the ongoing Middle East conflict and ahead of monetary policy updates from key global central bankers. Immediate overhead resistance for the index 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.

MRCB needs to overcome the 30-day ma (45sen) decisively to improve upside momentum and aim for the 123.6%FP (48sen) and 138.2%FP (51sen) ahead, while downside is cushioned by the 76.4%FR support (40sen). UEM Sunrise will need to break above the upper Bollinger band (87sen) to target the 123.6%FP (89sen) and 138.2%FP (97sen) going forward, with the lower Bollinger band (71sen) capping downside risk.

News Bites

  • Gamuda Bhd has inked a joint venture agreement with Sabah Energy Corporation Sdn Bhd and Kerjaya Kagum Hitech JV Sdn Bhd to develop a 187.5MW hydroelectric power plant in Tenom, Sabah, with a total estimated project cost of RM4.0bn.
  • Ranhill Utilities Bhd has inked a MoU with China Energy International Group Co Ltd to jointly pursue the Ir H Djuanda/Jatiluhur II water supply project, as well as co-develop and cooperate on other potential projects in Southeast Asia.
  • The Road Transport Department has extended the services contracts of MyEG Services Bhd for 3 years. The extended contracts will run from 23 May 2023 to 22 May 2026.
  • I-Bhd has collaborated with CelcomDigi Bhd for the deployment of the telecommunications company's fibre infrastructure together with access to 5G and technology in the developer's i-City development in Shah Alam.
  • Mitrajaya Holdings Bhd has secured a construction contract worth RM84.5mn from GDP X Properties Sdn Bhd for the construction of 1 block development of 31 storeys apartments in Kuala Lumpur. The contract is for a duration of 24 months.
  • Dagang NeXchange Bhd's 90%-owned subsidiary Ping Petroleum Sdn Bhd has bagged a contract from Petroliam Nasional Bhd in relation to the production of petroleum and abandonment of petroleum facilities of Abu Cluster.
  • EP Manufacturing Bhd has launched its RM30.0mn hi-tech car seat manufacturing facility in Tanjung Malim, which is set to play a critical role in the rollout of upcoming Proton vehicles.
  • SNS Network Technology Bhd has formalised its collaboration with Seagate Technology to provide enterprise data storage solutions as part of its information and communications technology services and solutions.
  • Hartalega Holdings Bhd has launched its 360-degree virtual plant tour platform named Hartalega Next Generation Experience.
  • UMW Holdings Bhd's automotive sales increased 13% YoY to 38,223 units for September 2023 with both UMW Toyota Motor and its associate company Perusahaan Otomobil Kedua Sdn Bhd continuing to deliver their outstanding orders.
  • Cahya Mata Sarawak Bhd said investigation into the alleged conflict of interest involving its Deputy Group Chairman and former Chief Information Officer has closed and been classified as 'no further action'.
  • A day prior to its current deadline to submit its regularisation plan, KNM Group Bhd (Not Rated) has submitted an application to extend the submission deadline by a year to 30 October 2024.
  • The High Court has granted 3 companies an interim injunction against TH Heavy Engineering Bhd and its liquidators to restrain them from calling for a creditors' meeting.
  • Eurozone economic sentiment dropped marginally to a near threeyear low in October, largely reflecting deteriorating confidence in industry and retail trade. The economic confidence index fell marginally to 93.3 in October from 93.4 in the previous month.
  • Singapore and Malaysia are doing a feasibility study on the special economic zone ecosystem enhancement between both countries, to find out what should be the focus of the economic zone moving forward.
  • The German economy shrank in the third quarter, weighed down by weak purchasing power and higher interest rates. Gross domestic product fell by 0.1% quarter on quarter in adjusted terms.

Source: TA Research - 31 Oct 2023

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