Review & Outlook

Stocks rose on Tuesday, led by the technology and semiconductor related sector following a rally in US mega tech stocks after Microsoft's CEO recruited former OpenAI chief Sam Altman to lead a new AI research team. The FBM KLCI gained 6.48 points to end at the day's high of 1,463.40, off an early low of 1,456.16, as gainers led losers 500 to 411 on higher turnover of 3.65bn shares worth RM2.11bn.

The broader market should extend consolidation pending fresh leads, while technology and rubber glove related stocks attract buyers amid positive news flow and earnings outlook. Immediate index resistance is at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle, while immediate support stays at 1,450, with 1,430, and then 1,400/1,390 as stronger chart supports.

Hartalega need sustained strength above the 61.8%FR (RM2.40) to extend higher towards the 76.4%FR (RM2.63), with next hurdles from RM2.85 and the June 2022 high (RM3.01), while key chart supports from the 50%FR (RM2.21) and 38.2%FR (RM2.02) cushion downside. Kossan will need breakout confirmation above the 76.4%FR (RM1.68) to extend recovery to RM1.84 and the April 2022 high (RM1.92), while chart supports at RM1.48 and 50%FR (RM1.40) limits downside risk.

News Bites

• Tenaga Nasional Bhd is on track to rebrand and transform the Malaysia Green Attribute Trading System into the country's leading digital marketplace for Renewable Energy Certificates, with the rebranded mGATS set to launch in the 1Q24.

• Mega First Corp Bhd has proposed to acquire 3.4mn ordinary shares, representing a 20% equity interest, in Don Sahong Power Co Ltd for US$85mn.

• Kerjaya Prospek Group Bhd's RM404.4mn job from BCM Holdings Sdn Bhd to build a main residential building had fallen through after BCM decided not to proceed with the contract.

• AirAsia X said on Tuesday that Malaysia's stock exchange had told the budget airline that it is no longer classified as financially distressed lifting the threat of being de-listed.

• DC Healthcare Holdings Bhd has proposed to acquire the entire 100% stake in I Bella Sdn Bhd for RM70mn as part of the group's strategy to enhance its service offerings and market presence.

• Mestron Holdings Bhd has received approval from the Securities Commission Malaysia for the transfer of its shares and warrants from the ACE Market to the Main Market of Bursa Malaysia Securities Bhd.

• Selangor state-controlled Kumpulan Perangsang Selangor Bhd has secured a contract worth RM162.18 million to supply various water treatment chemicals to Pengurusan Air Selangor Sdn Bhd.

• The Employees Provident Fund has resurfaced as a substantial shareholder of Kossan Rubber Industries Bhd after buying 5.4mn shares in the rubber glove manufacturer on Nov 16 to raise its stake to 5.1%.

• Sunway Construction Group Bhd's net profit rose to RM35mn from RM22.7mn in the previous corresponding period, while revenue grew to RM673.5mn from RM469.3mn a year earlier.

• Sports Toto Bhd posted a net profit of RM60.2mn, down from RM71.5mn in 1QFY23, and is cautiously optimistic about the continued growth of its numbers forecast operator business in Malaysia.

• Star Media Group Bhd's net profit fell 97.5% to RM56,000 for 3QFY2023, from RM2.2mn a year ago, as earnings were once again affected by high operating costs.

• Perdana Petroleum Bhd posted its best quarterly results since 2014, as net profit near doubled in 3QFY2023 to RM22.8mn, from RM11.4mn, supported by improved daily charter rates.

• Teo Seng Capital Bhd is set to post a record high annual profit for FY2023, as profit for 3QFY2023 surged by more than 84 times to RM43.8mn from RM516,000 a year ago, boosted by higher average selling price and sales quantity of eggs.

• Improved margins that led to lower costs of both natural rubber and synthetic latex has helped narrow Comfort Gloves Bhd's net loss for 3QFY2023 to RM7.9mn, from RM17.8mn a year earlier.

• The US Federal Reserve policymakers at their most recent meeting united around a strategy to "proceed carefully" on future interest-rate moves and base any further tightening on progress toward their inflation goal.

• The US existing home sales tumbled 4.1% last month to a seasonally adjusted annual rate of 3.79mn units, the lowest level since August 2010.

Source: TA Research - 22 Nov 2023