TA Sector Research

Daily Market Commentary - 17 Nov 2023

Publish date: Fri, 17 Nov 2023, 10:25 AM

Review & Outlook

The local market slipped into profit-taking consolidation on Thursday after recent strong gains, with concerns over China's growth momentum due to the weak property sector dampening sentiment. The FBM KLCI dipped 2.16 points to close at 1,464.68, off an early high of 1,465.16 and low of 1,460.46, as losers beat gainers 487 to 419 on lower turnover of 3.48bn shares worth RM2.07bn.

Stocks should trade sideways ahead of the weekend, with worries over economic growth momentum in China cushioned by optimism the US Federal Reserve may be ending its interest rate hike and lean towards cutting rates next year. 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.

Gamuda will need breakout confirmation above the 13/10/23 high (RM4.72) to extend uptrend and target the 138.2%FP (RM5.00), 150%FP (RM5.23) and 161.8%FP (RM5.46) going forward, while the 100-day ma (RM4.45) and 200-day ma (RM4.25) provide uptrend supports. Sunway Construction need convincing breakout above the 12/10/23 high (RM1.99) to fuel further gains towards the 123.6%FP (RM2.13) and 138.2%FP (RM2.23) ahead, with support from the 100-day ma (RM1.80) to cushion downside.

News Bites

  • The Malaysian government has initiated negotiations with toll concessionaires to restructure toll collection on 19 highways as per the Cabinet's decision on Dec 18, 2020, with the aim of maintaining or reducing toll charges.
  • Sime Darby Bhd has received shareholders' nod to acquire Permodalan Nasional Bhd's 61.2% stake in UMW Holdings Bhd for RM3.6bn and will be launching a mandatory general offer to acquire the remaining shares.
  • Dayang Enterprise Holdings Bhd has fully redeemed the last 2 series of issues of its sukuk murabahah programme amounting to RM220.5mn on 15 November 2023, ahead of the due redemption dates in 2024 and 2025.
  • Sunview Group Bhd has proposed to issue up to 73.6mn new shares at 66.0 sen/share to identified Bumiputera investors, in order to comply with Bursa Malaysia's listing requirements.
  • Salutica Bhd is involved in a legal suit with Apple's unit in Malaysia for alleged patent infringement and on 16 November 2023 filed a similar suit against the Apple South Asia Pte Ltd.
  • MAG Holdings Bhd has called of its proposal to take up a 50.0% stake in an Indonesian shrimp farm via a S$6.1mn investment.
  • Apex Equity Holdings Bhd is disposing off the 11-storey Menara Apex in Kajang, together with the land, for RM55.0mn to Era Edu Sdn Bhd, which operates the New Era University College education arm.
  • Siab Holdings Bhd has proposed a private placement, a rights issue with warrants, and the acquisition of 100.0% of Taghill Projects Sdn Bhd.
  • United Plantations Bhd's net profit rose 47.9% YoY to RM232.7mn in 3QFY23 due to higher profits from both the plantation and refinery segments.
  • Sunway Real Estate Investment Trust's net property income increased by 6.6% YoY to RM136.8mn in 3QFY23 in line with higher revenue driven by sharp increase in hotel segment's earnings.
  • Bumi Armada Bhd's net profit increased by 18.7% YoY to RM177.8mn in the 3QFY23, on higher operating income and lower finance cost.
  • ELK-Desa Resources Bhd saw its net profit decline 23.3% YoY to RM8.8mn in 2QFY24 on higher impairment allowances.
  • New-home prices in China's 70 cities, excluding state-subsidised housing, declined 0.38% last month from September.
  • Exports rose 1.6% in October from a year earlier, Ministry of Finance data showed on Thursday, faster than a 1.2% increase expected by economists in a Reuters poll but slower than the 4.3% rise in September.
  • Initial claims for state unemployment benefits in the US rose 13,000 to a seasonally adjusted 231,000 for the week ended Nov. 11.

Source: TA Research - 17 Nov 2023

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