TA Sector Research

Daily Market Commentary - 8 Nov 2023

Publish date: Wed, 08 Nov 2023, 10:39 AM

Review & Outlook

Blue chips paused for profit-taking consolidation on Tuesday after the index's recent rally to a nine-month high, and as Australia raised interest rates on concerns inflation may stay high for an extended period. The FBM KLCI slid 1.3 points to settle at 1,463.37, after ranging between early high of 1,465.55 and low of 1,458.66, as losers beat gainers 517 to 385 on lower turnover of 3.26bn shares worth RM2.17bn.

Blue chips should pause for profit-taking breather after recent strong gains, as market undertone remain firm on hopes the rising global interest rates trend may end soon and pave way for rate cuts sometime next year. On the index, resistance is set at the 1,490/1,500 area, followed by 1,520 as next upside hurdle. Immediate support is now at 1,450, with 1,430, and then 1,400/1,390 as stronger support platform.

Maxis will need sustained strength above the 76.4%FR (RM4.14) to enhance upside potential for retest of the May peak (RM4.50), with a confirmed breakout to aim for the 123.6%FP (RM4.86) ahead, while the 61.8%FR (RM3.92) cushions downside. TM should meet strong profit-taking resistance on further rally towards the 76.4%FR (RM5.47) and Aug 2022 peak (RM5.80), with downside cushioned by the 200-day moving average (RM4.92).

News Bites

  • Malaysia's industrial production index declined marginally by 0.5% YoY in September 2023, weighed mostly by the mining sector's oil and gas activities.
  • Bank Negara Malaysia's international reserves slipped 0.37% to US$108.5bn (RM507.1bn) as at Oct 31, 2023, from US$108.9bn a fortnight ago.
  • Gas Malaysia Bhd will allocate between RM1.2bn and RM1.4bn for capital expenditure to build up to 800km of gas pipelines in Peninsular Malaysia in the next five years.
  • Dialog Group Bhd and its partner Morimatsu International Holdings Co Ltd said they will spend RM250.0mn for the expansion of their joint venture company's engineering and fabrication facilities in Pengerang, Johor.
  • Bursa Malaysia has rejected the Employees Provident Fund's request for a waiver from categorising the pension fund as "persons connected" with Permodalan Nasional Bhd in the RM3.6bn merger deal between Sime Darby Bhd and UMW Holdings Bhd.
  • Eco World Development Group Bhd's co-founder Tan Sri Abdul Rashid Abdul Manaf has ceased to be a substantial shareholder of the group after he transferred his entire 7.5% stake in the group to the group's executive chairman, Tan Sri Liew Kee Sin.
  • Crescendo Corporation Bhd is selling 7 parcels of land for RM117.0mn to a data centre operator.
  • FGV Holdings Bhd is expected to announce more details on its shareholding before middle of next year.
  • Voultier Sdn Bhd is set to become the largest shareholder of E.A. Technique (M) Bhd on the proposed plan to subscribe to 676.4mn shares or a 51.0% stake in the group through a share issuance exercise.
  • Sersol Bhd has terminated its chief executive officer, Datuk Wira Justin Lim Hwa Tat, due to his absence from office without proper notice and non-response to a show cause letter since his suspension on Aug 30.
  • GIIB Holdings Bhd has proposed to undertake a private placement of up to 10.0% of its issued shares to raise up to RM6.6mn, mainly to fund working capital and upkeep its machinery and equipment.
  • Kanger International Bhd has acquired 15 units of the proposed serviced apartments in Tower A of Antara Genting Highlands Resort Suites for RM19.8mn.
  • Icon Offshore Bhd said it has secured a contract to supply a 60-tonne anchor handling tug supply vessel, which will be used for SEA Hibiscus Sdn Bhd's drilling campaign.
  • Tan Yew Loong, the group chief executive officer of the payment services segment for ManagePay Systems Bhd, had resigned on 5 Nov 2023 due to his other personal commitments.
  • Hartalega Holdings Bhd's net profit fell 2.3% YoY to RM27.7mn for 2QFY24, from RM28.3mn a year ago, due to lower sales volume and lower average selling price.
  • Fraser & Neave Holdings Bhd's net profit for 4QFY23 rose 39.1% YoY to RM137.6mn, from RM98.9mn a year ago, thanks to higher revenue and margin recovery in the Thailand segment.
  • China's imports rose 3% YoY last month, the first gain in eight months, and bucking the consensus forecast of a drop while exports dropped 6.4%, worse than expectations.

Source: TA Research - 8 Nov 2023

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