TA Sector Research

Daily Market Commentary - 3 Nov 2023

Publish date: Fri, 03 Nov 2023, 10:28 AM

Review & Outlook

Blue chips firmed on Thursday, led by oil & gas, technology and consumer heavyweights, rising in line with the region in hopes the US Federal Reserve may be done with interest rate hikes. The FBM KLCI closed up 4.44 points at 1,439.77, off an opening low of 1,435.86 and high of 1,441.35, as gainers led losers 575 to 300 on a stronger turnover of 3.38bn shares worth RM1.93bn.

Stocks should remain steady ahead of the weekend in hopes that the U.S. central bank's pause in rate hikes may extend till year-end and encourage Bank Negara to stay pat on interest rates. 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.

Hartalega remains in a base building phase, pending breakout confirmation above the 50%FR (RM2.21) to aim for 61.8%FR (RM2.40) and 76.4%FR (RM2.63) going forward, while key support from the 200-day ma (RM1.97) imply limited downside risk. Kossan Rubber is also building support at current levels, pending a decisive breakout above the 50%FR (RM1.40) to target 61.8%FR (RM1.53) and 76.4%FR (RM1.68) ahead, with the 200- day ma (RM1.29) providing strong support to cushion downside.

News Bites

  • AirAsia X Bhd has submitted an appeal against Bursa Securities' recent decision to reject the medium- and long-haul budget carrier's application to exit Practice Note 17 status.
  • AirAsia X Bhd has bagged a contract worth RM29.7mn to operate charter flights to transport the Malaysian Battalion 850 forces to Lebanon and back, as part of the United Nations Interim Force in Lebanon's peacekeeping mission.
  • Mitsui & Co Ltd is investing USD58mn (RM275.6mn) in Axiata Digital & Analytics Sdn Bhd through ADA's holding company, Axiata Digital Services Sdn Bhd, which is in turn a 96.7%-owned subsidiary of Axiata Group Bhd.
  • Berjaya Corp Bhd has emerged as a substantial shareholder of Salcon Bhd, after acquiring a 5.4% stake on 2 Nov 2023.
  • MSM Malaysia Holdings Bhd has agreed to discontinue the legal proceedings against Gas Malaysia Bhd's wholly-owned subsidiary, Gas Malaysia Energy and Services Sdn Bhd, over a disputed sum of RM10.3mn relating to gas supply to its wholly-owned unit MSM Sugar Refinery (Johor) Sdn Bhd.
  • TMC Life Sciences Bhd through its healthcare platform plans to expand its referral centres in Vietnam and Indonesia to further boost domestic medical tourism.
  • Atrium Real Estate Investment Trust's asset manager Atrium REIT Managers Sdn Bhd has acquired buildings and leasehold land in Shah Alam from a related party, Amazing Blitz Sdn Bhd, for RM41mn cash.
  • Yoong Onn Corporation Bhd has proposed to acquire a 60% stake in Singapore-based TC Homeplus for a total cash consideration of SGD11.0mn (RM38.2mn).
  • Plytec Holdings Bhd's 30.3mn new shares involved in the public portion of its initial public offering have been oversubscribed by 6.7 times.
  • Stella Holdings Bhd received shareholders' approval to buy construction firm Pembinaan Teguh Maju Sdn Bhd in an extraordinary general meeting on 2 Nov 2023.
  • Pentamaster Corp Bhd's net profit grew 17.1% YoY to RM23.5mn in 3QFY23, as it saw improvements across its business segments, mainly its factory automation solutions segment.
  • Bank Negara Malaysia maintained its overnight policy rate at 3% in its Monetary Policy Committee meeting on Thursday.
  • Recurring applications for unemployment benefits in the U.S. rose for a sixth straight week, indicating those losing their jobs are starting to have more trouble finding new ones.
  • New orders for U.S. manufactured goods jumped by more than expected in the month of September due to a surge in orders for durable goods.
  • The Bank of England left its benchmark lending rate at a 15-year high, with Governor Andrew Bailey saying it was "much too early" to be thinking about cuts.

Source: TA Research - 3 Nov 2023

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