Review & Outlook

Blue chips eased into sideways trade on Tuesday, as profit-taking checked optimism over potential for interest rate cuts in the US sometime next year, while window-dressing support cushioned falls. The FBM KLCI ended almost flat at 1,465.67 (+0.39) after being stuck between narrow range of 1,464.65 low and high of 1,467.61, as gainers led losers 474 to 431 on lower turnover of 3.71bn shares worth RM2.41bn.

The local market should fall into a near-term profit-taking consolidation, with uncertainty over the timeline for interest rate cuts next year stalling upside, while window-dressing interest cushion downside. The index will need breakout confirmation above the 1,465/1,470 immediate resistance area to fuel further upside towards the 1,490/1,500 next resistance area. Immediate support is at 1,450, with better chart supports at 1,430, and then 1,400/1,390.

Profit-taking pullbacks on Hartalega will be attractive to bargain, with key chart supports at the mid-Bollinger band (RM2.50) and 61.8%FR (RM2.40), for recovery upside towards the June 2022 high (RM3.01), RM3.20 and 123.6%FP (RM3.38) ahead. Kossan Rubber should also see keen buying interest on dips nearer to the midBollinger band (RM1.71) or 61.8%FR (RM1.64), while key resistance checking upside will be the April 2022 high (RM2.09) and 123.6%FP (RM2.36).

News Bites

• Malaysia's exports decreased by 5.9% to RM122.1bn in November 2023, due mainly to lower demand for electrical and electronic products.

• The Ministry of Investment, Trade and Industry has secured a total of RM29.6bn in potential investment and RM2.8bn in potential exports from two investment missions to Japan since June this year.

• TT Vision Holdings Bhd said its wholly-owned subsidiary, TT Vision Technologies Sdn Bhd, has secured several purchase orders for its solar cell inspection equipment totalling RM7.5mn from an undisclosed buyer.

• Globetronics Technology Bhd reassured stakeholders that the recent change in shareholder structure will not impact the group's dedication to operational continuity and shareholder value.

• Dataprep Holdings Bhd has proposed to acquire a 70% stake in DACS Network Solutions Sdn Bhd for RM10.5mn from Cloudaron Group Bhd.

• Advance Information Marketing Bhd's three-for-one rights issue with free warrants has been oversubscribed by 32.9%.

• Two subsidiaries of Prolexus Bhd, who collectively own 10.0% in South Malaysia Industries Bhd, are suing SMI and its board of directors for allegedly violating their rights as shareholders after SMI sought for more time to hold its annual general meeting.

• Main Market-listed Impiana Hotels Bhd's shares will be traded and quoted under the name Magma Group Bhd from 9am on 21 Dec 2023.

• Shafiq Abdul Jabbar is set to leave as group chief financial officer of Astro Malaysia Holdings Bhd to assume the same post at AMMB Holdings Bhd, effective 15 Feb 2024.

• Poh Kong Holdings Bhd's net profit for 1QFY24 rose 21.3% YoY to RM19.0mn despite lower revenue, largely driven by an uptrend in gold prices.

• The Bank of Japan maintained its short-term rate target at -0.1% and that for the 10-year government bond yield around 0% in a widely expected move.

• Single-family housing starts in the US, which account for the bulk of homebuilding, jumped 18.0% to a seasonally adjusted annual rate of 1.143mn units last month.

Source: TA Research - 20 Dec 2023