TA Sector Research

Daily Market Commentary - 4 Dec 2023

Publish date: Mon, 04 Dec 2023, 10:53 AM

Review & Outlook

The positive closing in the last two trading days of last week has improved short-term technical momentum for the FBM KLCI, hence there should be further upside bias this week. Nonetheless, it is crucial that market breadth and follow-through buying momentum recover significantly to support further gains ahead. Meanwhile, with US stocks rallying to new record highs and Treasury yields dipping further last Friday amid increasing anticipation interest rates have peaked and the Federal Reserve will pivot to rate cuts sometime next year, the positivity should spillover to brighten the local market sentiment.

On the index, better chart supports are at 1,430, and then 1,400/1,390, while the end June low of 1,370 will act as crucial support. Immediate resistance is still at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle.

As for stocks picks for the coming week, key banking and telco counters such as AMBank, CIMB, Maybank, RHB Bank, Axiata, CelcomDigi, Maxis and TM should continue to attract bargain hunters looking for situational plays and recovery upside going forward.

News Bites

  • The seasonally adjusted S&P Global Malaysia Manufacturing PMI rose to a seven-month high of 47.9 in November, up from 46.8 in October.
  • CelcomDigi Bhd, Maxis Bhd, Telekom Malaysia Bhd, U Mobile Sdn Bhd, and YTL Communications have executed conditional Share Subscription Agreements to take up a cumulative 70.0% stake or 14.0% each in Digital Nasional Bhd.
  • Axiata Group Bhd announced it has entered into an unconditional sale and purchase agreement with Spectrlite UK Ltd to dispose of Reynolds Holdings Ltd, which owns about 80.0% stake in Ncell Axiata Ltd.
  • Aeon Credit Service (M) Bhd has issued a senior sukuk with a nominal amount of RM300.0mn and a tenure of 5 years.
  • Yinson Holdings Bhd has made an investment in Carbon Removal AS, a leading Norway-based company developing direct air capture projects but did not disclose its value.
  • Apex Healthcare Bhd has proposed to acquire industrial land in Melaka for RM66.5mn from Panasonic Appliances Refrigeration Devices Malaysia Sdn Bhd.
  • Duopharma Biotech Bhd has recently partnered with RenalWorks Malaysia Sdn Bhd, a subsidiary of Singapore-based RenalWorks Pte Ltd, to enhance dialysis services through the provision of the proprietary RenalGenie Electronic Health Record dialysis software.
  • Citaglobal Bhd and TIZA Global Sdn Bhd as a consortium, have executed a 40:60 joint development agreement with leading clean energy player Abu Dhabi Future Energy Company PJSC for a 2-gigawatt solar farm project in the state of Pahang for US$2.0bn(RM9.8bn).
  • UEM Edgenta Bhd, UEM Lestra Bhd, and PLUS Malaysia Bhd have signed business agreements with domestic and international companies at the 28th United Nations Climate Change Conference in Dubai, United Arab Emirates.
  • Bursa Malaysia Securities Bhd has reprimanded Sarawak Consolidated Industries Bhd (Not Rated) and 2 of its former directors, Datuk Mohd Abdul Karim Abdullah and Rosland Othman, for failing to submit the group's 2021 annual report within the approved timeline.
  • Pansar Bhd has secured a contract for road construction works in Sarawak valued at RM107.5mn.
  • Willowglen MSC Bhd has been awarded a contract valued equivalent to approximately RM12.8mn contract by Singapore-based SP PowerAssets Ltd for the installation and maintenance of substation intrusion detection system for 3 years.
  • JADI Imaging Holdings Bhd has entered into a sales and purchase agreement with TT dotCom Sdn Bhd for the disposal of a property for RM18.5mn.
  • Crest Builder Holdings Bhd has acquired the remaining 49.0% equity interest in its indirect subsidiary Unitapah Sdn Bhd for RM43.6mn, cash.
  • Bintai Kinden Corporation Bhd has proposed to undertake a private placement of up to 281.5mn shares, or 30.0% of its issued share capital, to third-party investors who have yet to be identified.
  • The Caixin manufacturing Purchasing Managers' Index, or PMI, rose to a three-month high of 50.7 in November from 49.5 in October.
  • Federal Reserve Chair Jerome Powell pushed back against Wall Street's growing expectations of interest-rate cuts in the first half of 2024, saying the committee will move cautiously with borrowing costs at a 22-year high but retain the option to hike further.

Source: TA Research - 4 Dec 2023

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