TA Sector Research

Daily Market Commentary - 23 Nov 2023

Publish date: Thu, 23 Nov 2023, 09:59 AM

Review & Outlook

The local market fell back into profit-taking consolidation mode Wednesday, as investors turned cautious after the recent FOMC meeting minutes imply continuing vigilance in keeping interest rates high to tame inflation. The FBM KLCI shed 7.51 points to close at 1,455.89, off an opening high of 1,460.59 and low of 1,454.52, as losers beat gainers 530 to 374 on slower trade totalling 2.97bn shares worth RM2.04bn.

Stocks should continue to trade sideways pending fresh local market leads, while rubber glove and oil & gas related stocks continue to attract rotational buying interest amid positive news flow. 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.

Velesto will be attractive to bargain on weakness for rebound upside to the 50-day ma (25sen), with a confirmed breakout to aim for the Feb high (28.5sen) and 32sen going forward, while downside should be cushioned by the 61.8%FR (20sen). Wasco also looks attractive to bargain on weakness, while a convincing breakout above the 123.6%FP (RM1.03) should target the 138.2%FP (RM1.09) and 150%FP (RM1.14) ahead, with the 200-day ma (90sen) limiting downside risk.

News Bites

  • Bank Negara Malaysia's international reserves increased 1.84% to US$110.5bn (RM515.8bn) as at November 15, 2023, from US$108.5bn reported a fortnight ago.
  • Widad Group Bhd's unit has secured a RM116.8mn contract to build the Phase 1A of the Tok Bali Industrial Park in Gong Kulim, Kelantan for the East Coast Economic Region Development Council.
  • Sam Engineering & Equipment (M) Bhd has proposed to acquire the entire equity interest in Aviatron (M) Sdn Bhd from Singapore Aerospace Manufacturing Pte Ltd for US$43.4mn (approximately RM202.2mn) cash.
  • Malayan Banking Bhd reported a net profit of RM2.4bn in 3QFY23, up from RM2.1bn in the same quarter in 2022, as non-interest income rose and net impairment provisions improved.
  • MISC Bhd recorded a net profit of RM430.4mn if 3QFY23, falling from RM820.6mn in the year-ago quarter, mainly due to absence of a one-off compensation that it received in the previous period.
  • Kuala Lumpur Kepong Bhd reported a lower net profit of RM834.3mn for FY2023 compared with RM2.2bn in the same period a year ago, due to lower revenue.
  • AMMB Holdings Bhd's net profit rose 10.1% YoY to RM469.8mn in 2QFY2024 from RM426.8mn, as write-back of provisions and lower loan impairments more than offset the weaker operating profit in the quarter.
  • Inari Amertron Bhd recorded a lower net profit of RM85mn in 1Q FY2024 from RM106.3mn in 1QFY2023 dragged down by unfavourable currency movement and increase in electricity rates.
  • Sunway Bhd's net profit rose 8.8% to RM180.3mn in 3QFY23 from RM165.8mn a year earlier due to higher revenue.
  • Time Dotcom Bhd's net profit dropped 10.2% to RM106.6mn in 3QFY2023, from RM118.7mn a year ago, on lower gain of foreign exchange, higher depreciation costs and increased operating expenses.
  • Genting Plantations Bhd's net profit for 3QFY2023 rose to RM80.5mn from RM75.5mn registered in the same quarter last year.
  • Boustead Plantation returned to the black in 3QFY2023 with a net profit of RM15.2mn, from a net loss of RM352,000 a year ago, mainly due to yield and oil extraction rate improvement.
  • Hibiscus Petroleum Bhd recorded a higher net profit of RM154.3mn in 1QFY2024, from RM135.3mn in the corresponding quarter of FY2023.
  • Singapore's economy is expected to grow between 1% and 3% in 2024 as trade-related sectors improve modestly, the Ministry of Trade and Industry said on Nov 22.
  • The initial claims for state unemployment benefits in the US dropped 24,000 to a seasonally adjusted 209,000 for the week ended Nov. 18.

Source: TA Research - 23 Nov 2023

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