TA Sector Research

Daily Market Commentary - 18 Dec 2023

Publish date: Mon, 18 Dec 2023, 10:58 AM

Review & Outlook

Last week's strong rebound has reversed bearish momentum from the prior week's drift-down, with positive technical momentum indicators led by the fresh daily MACD buy signal suggesting further upside bias for the FBM KLCI. With the end of the year approaching, window-dressing season should begin to shore up market sentiment and attract firmer investor commitments, specifically in the blue-chip index heavyweight space. Meantime, increasing optimism from the latest US central bank guidance for an end to its interest rate hike campaign and pivot to several rate cuts sometime next year due to the high probability for a soft landing for the US economy should spillover and lift sentiment towards the year-end.

The blue-chip benchmark index will need to convincingly climb above the 1,465/1,470 immediate resistance area to enhance follow-through buying momentum and aim for the 1,490/1,500 next resistance area. A decisive breakout should then target the 1,550 and 1,580 tougher upside hurdles going forward. Immediate support is revised upwards to 1,550, with better chart supports at 1,430, and then 1,400/1,390, while the end June low of 1,370 will act as crucial support.

As for stocks picks for the coming week, key gaming, rubber glove and semiconductor related counters such as Genting Berhad, Genting Malaysia, Hartalega, Kossan Rubber, Supermax, Top Glove, Globetronics and Unisem should again attract bargain hunters looking for cheaper levels to maximize year-end window-dressing gains.

News Bites

  • The 10% sales tax on online purchases is only applicable to imported goods valued under RM500, said Communications Minister Fahmi Fadzil.
  • The Tourism, Arts and Culture Ministry has unveiled a revamped version of the Malaysia My Second Home programme by introducing a threetiered system where applicants will be classified into different groups based on their eligibility.
  • KNM Group Bhd has denied claims that its premises were raided by the police recently, saying the authorities had only sought its assistance for an investigation.
  • FGV Holdings Bhd has upsized its sukuk murabahah programme to up to RM3bn in nominal value, from the initial sum of RM500mn two years ago.
  • Bintai Kinden Corp Bhd has filed a police report against IFZ Oil & Gas (M) Sdn Bhd after the latter denied receiving an initial advance amounting to RM4.5mn for a project back in May 2022.
  • Priceworth International Bhd and its wholly-owned subsidiary Maxland Energy Sdn Bhd have purchased the entire 100% equity interest in forest and plantation maintenance works company Meluz Azim Sdn Bhd for RM46.7mn.
  • Datuk Eddie Ong Choo Meng, has injected Hextar Mitai Sdn Bhd - an engineering solutions company controlled by his family - into ACE Market-listed Hextar Industries Bhd in a related party transaction.
  • Petra Energy Bhd's unit Petra Marine Sdn Bhd is divesting an accommodation work barge for USD4.0mn (RM18.5mn) to Great Sky Investments Corp, a company nominated by Star Chance Ltd.
  • Impiana Hotel Bhd has proposed to change its corporate name to Magma Group Bhd, effective immediately.
  • Tunku Datuk Mahmood Fawzy Muhiyiddin has resigned as the nonexecutive chairman of AirAsia X Bhd after nearly 1½ years with the medium-haul, low-cost affiliate of Capital A Bhd.
  • Petronas Chemicals Group Bhd, which is 64.4%-owned by Petroliam Nasional Bhd, has named Mazuin Ismail as its new managing director and chief executive officer, effective from Jan 1, 2024.
  • Apollo Food Holdings Bhd has requested for a trading suspension of its shares, which has been granted and will take effect today, pending the release of "a material announcement".
  • Marine & General Bhd's net profit fell 50.7% to RM8.2min for the 2QFY24 compared with RM16.7mn a year ago, after a non-recurring depreciation adjustment was made.
  • China's industrial production posted an annual growth of 6.6% in November following a 4.6% rise in October.
  • Central banks around the world shouldn't rush to relax their fight against inflation even with the Federal Reserve signalling its own policy pivot next year, the chief of the International Monetary Fund said last Friday

Source: TA Research - 18 Dec 2023

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