TA Sector Research

Daily Market Commentary - 7 Dec 2023

Publish date: Thu, 07 Dec 2023, 11:30 AM

Review & Outlook

Blue chips ended near session lows on Wednesday, as investors stay sidelined pending firmer local market leads and ahead of the keenly anticipated US jobs data by the end of the week. The FBM KLCI slipped 3.64 points to close at 1,445.82, off an early high of 1,452.07 and low of 1,444.63, as losers beat gainers 452 to 365 on slower trade totalling 2.79bn shares worth RM1.81bn.

The local market should continue to drift lower given the absence of significant domestic leads, and as investors await more solid signs of cooling inflation which could strengthen the case for interest rate cuts next year. Better index chart supports are at 1,430, and 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.

Maxis is deemed attractive to bargain at current levels for recovery to the 76.4%FR (RM4.14), with a breakout to aim for the 16/6/23 high (RM4.46), and next major hurdle at the 123.6%FP (RM4.78), while the 50%FR (RM3.78) cushions downside. TM will need confirmed breakout above the 76.4%FR (RM5.47) to enhance upside momentum towards the 25/8/22 peak (RM5.80), with next hurdle from the 123.6%FP (RM6.13), while downside is cushioned by the 200-day ma (RM4.95).

News Bites

  • Malaysia's tourism sector is anticipated to fully recover by next year, with the number of tourist arrivals seen surpassing pre-Covid-19 levels said Tourism Malaysia deputy director general (promotion) Datuk Musa Yusof.
  • Gamuda Bhd has bagged a RM1.8bn contract from the Singapore Land Transport Authority for the design and construction of the West Coast Station and Tunnels.
  • Tenaga Nasional Bhd is currently finalising partnerships and conducting feasibility studies for the development of renewable energy zones for large-scale solar and hybrid floating solar photovoltaic totaling 2,500MW in capacity.
  • Malakoff Corporation Bhd has partnered Abu Dhabi Future Energy Company PJSC-Masdar to identify potential business opportunities through investment and solar photovoltaic power plant project development with a targeted aggregate capacity of up to 1,000 Megawatt.
  • Axiata Group Bhd's Indonesian subsidiaries, PT XL Axiata Tbk and PT Link Net Tbk, have reached non-binding agreements to bolster their position in optimising the opportunities within Indonesia's underpenetrated fixed broadband and fixed mobile convergence markets.
  • Sime Darby Bhd will issue an unconditional mandatory takeover offer to acquire the remaining 38.82% stake it does not own in UMW Holdings Bhd for a cash price of RM5.00 per share.
  • Swiss-based multinational investment bank UBS Group has emerged as a substantial shareholder in Boustead Plantations Bhd with a 5.36% stake.
  • Malaysian Pacific Industries Bhd's wholly owned subsidiary, Dynacraft Industries Sdn Bhd, will cease its manufacturing of leadframes operations effective end of January 2024.
  • MyEG Lodging (NC) Sdn Bhd, a subsidiary of e-government service provider MyEG Services Bhd, has signed a 30-year lease agreement with Penang Development Corp to develop a foreign workers' village project worth RM108.0mn.
  • Comintel Corporation Bhd has proposed a rights issue exercise followed by a private placement to raise approximately RM90.0mn for acquisition of construction equipment and working capital purposes.
  • MSM Malaysia Holdings Bhd is expecting a better financial year ending 31 December 2024.
  • Gamuda Bhd reported 1QFY24 net profit sank 83.3% YoY to RM195.0mn due to earnings of RM1.0bn from the sale of highways last year.
  • China will establish a back-up coal production system by 2027 to stabilise prices and secure coal supply.
  • Moody's on Wednesday downgraded its outlook on Hong Kong to negative from stable, just a day after Moody's cut China's credit outlook.
  • Bank of Japan deputy governor Ryozo Himino signalled that the central bank is inching closer to putting an end to the world's last negative interest rate regime.
  • The Italian government has told China it plans to exit the massive Belt and Road Initiative investment programme, which Rome signed up to in 2019.

Source: TA Research - 7 Dec 2023

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