Review & Outlook

Blue chips rose on Thursday, led by the healthcare (+3.5%), oil & gas (+1.9%), utility (+1%) and technology heavyweights, as investors returned to bargain hunt on optimism over the US Federal Reserve's end of its rate hike cycle and pivot to rate cuts next year. The FBM KLCI climbed 8.22 points to close at the day's high of 1,456.26, off an early low of 1,448.14, as gainers led losers 566 to 353 on active trade totalling 4.24bn shares worth RM2.78bn.

Stocks should mirror the strength in global markets as investors begin to price in recovery following the outlook for a soft landing for the US economy and the US central bank's pivot to rate cuts next year. On the index, immediate resistance remains at 1,465/1,470, with the 1,490/1,500 area acting as tougher upside hurdle. 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.

Aemulus will need breakout confirmation above the 200-day ma (33sen) to boost upside momentum towards the 76.4%FR (39sen) and 61.8%FR (45sen) going forward, while crucial support will be from the 1/12/23 pivot low (23sen). DNEX is attractive to bargain at current levels above crucial support from the 30/5/23 low (37sen), for rebound upside to the 100-day ma (43sen) and 200-day ma (47sen), with tougher hurdles seen at 53sen and the 76.4%FR (59sen).

News Bites

• Ranhill Utilities Berhad has secured a RM283.9mn non-revenue water reduction contract in Johor.

• Crest Builder Holdings Bhd has secured a RM314.5mn contract from UEM Land Bhd to construct 1,334 units of serviced apartments in two 53-storey blocks in Cheras, Kuala Lumpur.

• Kuala Lumpur Kepong Bhd and its Singapore subsidiary, KLK Plantations and Trading Pte Ltd have proposed to acquire more than 90% stakes in two Indonesian palm oil companies for RM276.6mn in a related party transaction, from Whitmore Holdings Sdn Bhd, a unit of Batu Kawan Bhd.

• Pestech International Bhd said its 60%-owned JV has secured an electrical substation construction project in Entinggan, Kuching, Sarawak from Syarikat SESCO Bhd for RM110mn.

• GoAuto Group and Careplus Group Bhd's JV company NexV Manufacturing Sdn Bhd is set to develop a new energy vehicle manufacturing and assembly plant in the Chembong industrial area, Rembau.

• The Armed Forces Fund has disposed of its entire direct stake of 8.2% in Boustead Heavy Industries Corp Bhd on Wednesday, leaving it with an indirect stake held via Boustead Holdings Bhd.

• Tenaga Nasional Bhd has appointed Datuk Megat Jalaluddin Megat Hassan as its new president and chief executive officer with effect from March 1, 2024.

• Sapura Energy Bhd has been granted a second extension till May 31 next year to submit its Practice Note 17 regularisation plan, which was supposed to be due on Nov 30, 2023.

• Yinson Holdings Bhd posted a record net profit of RM248mn for the 3QFY24, up 60% from RM155mn a year earlier as revenue grew 62% to RM2.8bn from RM1.7bn.

• Astro Malaysia Holdings Bhd posted its maiden net loss of RM47.1mn in 3QFY24 compared with a net profit of RM5.8mn in 3QFY23, largely due to the voluntary separation scheme exercise.

• Scientex Bhd's net profit for 1QFY24 climbing 28.6% to RM137.8mn, from RM107.2mn a year earlier, driven by its property division.

• US retail sales unexpectedly rose 0.3% in November as the holiday shopping season got off to a brisk start.

• The European Central Bank pushed back against bets on imminent cuts to interest rates on Thursday by reaffirming borrowing costs would remain at record highs despite lower inflation expectations.

Source: TA Research - 15 Dec 2023