Review & Outlook

Last week's volatile trading sessions, which saw the FBM KLCI slumping from a nine-month high to a one-month low, did not augur well for investor confidence, with the weak follow-through buying momentum and negative market breadth also discouraging market participants. In the meantime, risk sentiment should also suffer given the still volatile geopolitical situation in the Middle East, which forced many key countries to choose sides, adversely affecting the global economy due to the threat of trade sanctions. Renewed concerns that US interest rates may need to stay higher for longer, as suggested by the Federal Reserve Chairman, due to stubbornly high inflationary pressures, will also act to dampen market sentiment for the immediate term.

On the index, immediate support is hence revised lower to 1,430, with 1,400/1,390, and the end June low of 1,370 acts as crucial support. Immediate resistance is retained at 1,465/1,470, with the 1,490/1,500 area acting as a tougher upside hurdle.

On stocks to look at this coming week, key banking, construction, and oil & gas lower liners such as AMBank, CIMB, Gamuda, Sunway Construction, Bumi Armada and Hibiscus Petroleum should attract investors looking to bargain hunt on weakness for recovery upside.

News Bites

• The number of jobs rose 2.6% to 8.9 million in the third quarter of 2023, compared with 8.68 million a year earlier, according to the Department of Statistics Malaysia.

• Sime Darby Bhd is exiting the healthcare business by selling its entire 50.0% equity interest in Ramsay Sime Darby Health Care Sdn Bhd to Columbia Asia Healthcare Sdn Bhd for RM2.8bn.

• Ibraco Bhd and China Railway Group Ltd have clinched a construction project worth RM568.8mn involving infrastructure works for the Kuching Urban Transportation System.

• Malaysian Rating Corporation Bhd has revised its rating outlook on Tan Chong Motor Holdings Bhd's RM1.5bn Islamic Medium-Term Notes programme to "negative" from "stable".

• The Armed Forces Fund Board has launched an unconditional takeover offer for all the remaining shares not held by it in Boustead Plantations Bhd for RM1.55 each.

• Aeon Credit Service (M) Bhd has unveiled a groundbreaking Electric Motorcycle Financing, complementing its existing Hire-Purchase i-Scheme and addressing the surging demand in the electric vehicle financing market.

• Electronics, properties, and utilities company GUH Holdings Bhd is teaming up with Chinese battery manufacturing firm Shenzhen Xixin Electronic Technology Co Ltd to jointly establish a battery assembly plant in Malaysia.

• LBS Bina Group Bhd has secured a solar power contract with a capacity of 28.7 megawatts via the Corporate Green Power Programme.

• Hextar Industries Bhd is seeking to transfer the listing and quotation of its entire issued share capital from the Ace Market to Main Market of Bursa Malaysia.

• Advancecon Holdings Bhd has secured a RM22.8mn contract from Sime Darby Property (Pagoh) Sdn Bhd.

• Sanichi Technology Bhd has received a notice in writing from Messrs Al Jafree Salihin Kuzaimi PLT on their resignation as external auditors of the group.

• Adventa Bhd Bhd has announced the resignation of its chief executive officer Datuk Mark Victor Rozario, effective Nov 15.

• Maxis Bhd's net profit for 3QFY23 dropped 6.8% YoY to RM287.0mn from RM308.0mn a year ago due to restructuring charges related to cost optimisation initiatives.

• Australia's central bank expects inflation will only return to the top of its 2% to 3% target by end-2025, and that a stronger economy will support employment, underscoring this week's decision to resume raising interest rates.

• Moody's on Friday (Nov 10) lowered its outlook on the US credit rating to "negative" from "stable", citing large fiscal deficits and a decline in debt affordability.

• Federal Reserve Chair Jerome Powell said the US central bank will continue to move carefully but won't hesitate to tighten policy further if needed to contain inflation.

• U.K.'s GDP was unchanged from the second quarter, defying forecasts of a small contraction and ensuring a recession is avoided this year.

Source: TA Research - 14 Nov 2023