TA Sector Research

Daily Market Commentary - 2 Nov 2023

Publish date: Thu, 02 Nov 2023, 10:10 AM

Review & Outlook

Stocks drifted lower on Wednesday, as investors remained wary over China's October factory activity contraction and ahead of the US Federal Reserve's decision on interest rates. The FBM KLCI fell 6.81 points to close at 1,435.33, off an early high of 1,441.59 and low of 1,434.93, as losers beat gainers 562 to 319 on lower turnover of 2.8bn shares worth RM1.8bn.

The local market should stay range bound pending monetary policy decisions from key global central bankers, and ahead of Bank Negara's monetary policy statement. 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.

SKP Resources is ripe for oversold rebound after the recent selldown, with key supports from the lower Bollinger band (77sen) and 70sen cushioning downside, while resistance at 92sen and the 76.4%FR (RM1.02) restrict near-term upside. VSI should rebuild support at current levels, with downside cushioned by the 200-day ma (88sen) and 85sen, and immediate upside hurdles seen at the 38.2%FR (97sen) and 50%FR (RM1.04).

News Bites

  • The seasonally adjusted S&P Global Malaysia Manufacturing Purchasing Managers' Index was unchanged at 46.8 in October.
  • Capital A Bhd has entered into a letter of Intent with Acquisition Corp, a special purpose acquisition corporation listed on Nasdaq for the proposed business combination between Aetherium and Capital A International.
  • YTL Power International Bhd has become a substantial shareholder of smaller rival Ranhill Utilities Bhd, after acquiring 243.3mn shares, or 18.9% stake, in Ranhill on 1 Nov 2023.
  • Malakoff Corp Bhd has signed a solar power purchase agreement with DRB-Hicom Bhd for RM50mn to develop, operate and maintain solar photovoltaic systems at 14 locations in Selangor, Perak, Melaka and Pahang.
  • Mobile network operators and Digital Nasional Bhd are expected to sign a share subscription agreement this month, said Communications and Digital Minister Fahmi Fadzil.
  • Maybank Islamic Bhd, the Islamic banking arm of Malayan Banking Bhd, has no plans to go for a listing, according to Maybank Islamic CEO Datuk Mohamed Rafique Merican.
  • Tenaga Nasional Bhd is exploring carbon capture and storage and hydrogen-based generation solutions to address the sustainable electricity consumption needs of the growing energy-guzzling data centre industry in Malaysia.
  • Boustead Heavy Industries Corp Bhd and Minister of Finance Inc have mutually agreed to extend the conditional period for the disposal of a 20.8% stake in Boustead Naval Shipyard Sdn Bhd to MOF Inc by another one month till 1 Dec.
  • OM Holdings Ltd's unit is disposing of 90% of its 100% stake in OM Materials (Qinzhou) Co Ltd to Beijing Kunpeng Hongsheng Metal Co Ltd for USD25mn.
  • LGMS Bhd has signed a partnership agreement with Finland's WithSecure to develop innovative and user-friendly cybersecurity solutions specifically for local small and medium enterprises.
  • HIL Industries Bhd's indirect wholly-owned unit has proposed to acquire a 3-acre piece of land in Kuala Lumpur from A & M Modern Homes Sdn Bhd for RM47mn cash.
  • Heitech Padu Bhd has accepted a RM29.7mn contract for strengthening the IT technology system for the Ministry of Domestic Trade and Cost of Living.
  • Ageson Bhd is now a Practice Note 17 company, making it the 24th admission in the list.
  • Datuk Seri Mahmud Abu Bekir Taib has ceased to be a substantial shareholder of KNM Group Bhd.
  • Malaysia Marine and Heavy Engineering Holdings Bhd has appointed Mohd Nazir Mohd Nor as its managing director, effective from 1 Dec 2023.
  • Carlsberg Brewery Malaysia Bhd's net profit for 3QFY23 fell marginally to RM75.9mn from RM76.4mn a year earlier, largely due to a weaker trading environment and softer consumer sentiment.
  • China's Caixin manufacturing purchasing managers' index fell to 49.5 from 50.6 in September, missing economists' forecast of 50.8.
  • The US Federal Reserve left interest rates unchanged at a 22-year high of 5.50% and signaled rates would remain elevated well into next year to keep inflation moving down.
  • The Institute for Supply Management said its manufacturing PMI fell to 46.7 in October from 49.0 in September.

Source: TA Research - 2 Nov 2023

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