TA Sector Research

Daily Market Commentary - 16 November 2023

Publish date: Thu, 16 Nov 2023, 10:31 AM

Review & Outlook

Blue chips rose on Wednesday, lifting the benchmark index up to a fresh nine-month high, on spreading optimism the US rate-hike campaign has ended following the soft October inflation data. The FBM KLCI climbed 15.12 points to end at the day's high of 1,466.84, off an opening low of 1,453.07, as gainers led losers 595 to 359 on robust trade totalling 3.94bn shares worth RM2.21bn.

While stocks should extend rebound following recent optimism that the US central bank may end and even reverse rate-hikes next year, further upside could stall on caution over a deadline to prevent another US government shutdown by end of this week. Immediate index resistance remains at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle. Immediate support is raised to 1,450, with stronger supports at 1,430, then 1,400/1,390, and the end June low of 1,370 as crucial support.

AMBank will need breakout confirmation above the 14/12/22 peak (RM4.09) to enhance upside momentum towards the 123.6%FP (RM4.36) and 138.2%FP (RM4.53) ahead, with the 100-day moving average (RM3.75) cushioning downside. CIMB need to climb above the 123.6%FP (RM5.89) to aim for the 138.2%FP (RM6.09) and 150%FP (RM6.24) going forward, while downside is seen cushioned by the 50-day moving average (RM5.60).

News Bites

  • The Malaysian Institute of Economic Research's Business Conditions Index continued to decline in 3Q2023, falling by 2.7 points to 79.7 points, the lowest level since 2Q2020, compared with 82.4 points in 2Q2023 and 99.8 points in 3Q2022. 
  • Berjaya Corporation Bhd had disposed of 4.9% stake or 37.8mn shares in Redtone Digital Bhd via a direct business transaction, raising some RM27.6mn or 73.0 sen/share. 
  • Dialog Group Bhd has acquired the entire stake in Tarpon Platform Systems Malaysia Sdn Bhd and all assets of Tarpon Systems International II, LLC for a total cash consideration of US$1.2mn. 
  • HSS Engineers Bhd has entered into a binding head of agreement with the Engineering and Development Corporation of the Philippines for the incorporation of a JV vehicle in the country, which will provide advanced building information modeling services and solutions. 
  • Crescendo Corporation Bhd is disposing of 9 parcels of freehold vacant land measuring about 82,496.4sqm in Johor to Yu Ao Sdn Bhd for RM111.0mn cash. 
  • MAA Group Bhd is divesting an 85.0% stake in its Philippine general insurance business to Triple P Philippines Pte Ltd for US$49.3mn cash, with an option to sell the remaining 15.0% stake for US$8.7mn within a 14-month period. 
  • Malaysian Pacific Industries Bhd's net profit in 1QFY24 declined by 68.7% YoY to RM16.5mn, partly due to lower revenue and appreciation of the US dollar against the ringgit. 
  • UEM Sunrise Bhd's net profit dropped 59.0% YoY to RM8.3mn for the 3QFY23 due to due to higher selling and distribution expenses incurred by its new project launches. 
  • Kossan Rubber Industries Bhd's net profit jumped 76.1% YoY to RM41.0mn for its 3QFY23, thanks to better cost controls and lower raw material costs in its glove business, as well as the sale of higher margin infrastructure products at its technical rubber products division. 
  • Berjaya Food Bhd's 1QFY24 net profit fell by 45.2% YoY to RM19.0mn as inflationary cost pressures squeezes its margins. 
  • Perak Transit Bhd's 3QFY23 net profit rose 10.4% YoY to RM16.6mn but quarterly revenue dropped 4.3% YoY to RM43.7mn due to lower contribution from the integrated public transportation terminal operations. 
  • Amway (Malaysia) Holdings Bhd's 3QFY23 net profit jumped 146.0% YoY to RM46.2mn. 
  • China's retail sales climbed 7.6% YoY in October. 
  • Japan's GDP shrank at an annualised pace of 2.1% in the third quarter, largely on the back of falling business spending, a lack of recovery in consumer spending, and higher imports. 
  • Output in the euro area will increase by 0.2% in the fourth quarter after shrinking 0.1% in the three months through September, the European Commission said.

Source: TA Research - 16 Nov 2023

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