Review & Outlook

Given the approaching year-end, the annual window-dressing season should pick up momentum to shore up market sentiment and attract stronger investor participation, especially in the core blue-chip index heavyweight sector. Also, with the eventual pivot to interest rate cuts by the US central bank sometime next year amid increasing optimism for a soft landing on the US economy, the positive undertone on global markets should spillover to boost sentiment on the local front.

During this final trading week of the year, a convincing breakout above 1,470 on the FBM KLCI need to happen to encourage further gain towards the 1,490/1,500 level, where the index hopefully will end the year as window-dressing activity returns. Meantime, it is crucial that the 1,450 immediate support level held to prevent further correction potential towards better supports at 1,440 and 1,430, while 1,400/1,390 should act as stronger support.

As for blue-chip picks for the last week of this year, core banking and telco counters AMBank, CIMB, RHB Bank, Maybank, Axiata, CelcomDigi, Maxis and TM should hopefully again attract bargain hunters looking to latch on to year-end window-dressing upside.

News Bites

• Malaysia's consumer price index rose 1.5% YoY in November, the slowest pace since February 2021, amid lower price increase recorded for food, health, restaurants and hotels. 

• Malaysia's leading index contraction narrowed by 0.2% YoY to 109.2 points in October 2023 from 109.4 points in October 2022, according to the Department of Statistics Malaysia. 

• Bank Negara Malaysia's international reserves increased by 0.45% to US$112.8bn as of Dec 15, 2023 from US$112.3bn a fortnight ago. 

• The government has kept electricity tariffs unchanged for commercial and industrial customers for 1H24 but widened its targeted subsidy mechanism for households by removing rebate for households with monthly consumption above 600kWh. 

• The Malaysia Competition Commission has imposed cumulative penalties amounting to RM415.5mn on five feedmillers. 

• Leong Hup International Bhd has reiterated its stand that its wholly owned subsidiary Leong Hup Feedmill Malaysia Sdn Bhd was not involved in price-fixing practices and will challenge the decision by MyCC. 

• PPB Group Bhd said its 80%-owned subsidiary, FFM Bhd, will challenge MyCC's findings of a price-fixing infringement by the company involving poultry feed. 

• Capital A Bhd is requesting for a 4th extension to submit its Practice Note 17 regularisation plan, originally due on 31 Dec 2023, now aiming for 30 Jun 2024. 

• UMW Holdings Bhd's 51%-owned UMW Toyota Motor Sdn Bhd is working closely with regulatory authorities to promptly and transparently address the recent procedural irregularity in the testing of models by Daihatsu Motor Co Ltd. 

• The Armed Forces Fund Board's offer to take Boustead Plantations Bhd private has now become unconditional after it accumulated 90.3% of BPlant's total issued shares on 23 Dec 2023. 

• Malaysian Resources Corporation Bhd has proposed to acquire the rights to carry out the development of an office tower in the PJ Sentral commercial development from the Selangor State Development Corp, for RM270mn. 

• The Johor branch of the Ministry of Domestic Trade and Cost of Living will ensure no disruption in the state's sugar supply, following MSM Malaysia Holdings Bhd's upcoming export of its premium white sugar brand, Gula Super, to Singapore next year. 

• Penang has submitted an application to the National Water Services Commission to raise water tariffs for domestic customers in the state, Chief Minister Chow Kon Yeow said. 

• Sunview Group Bhd said its unit is buying Mestron Holdings Bhd's 10% stake in Winstar Aluminium Manufacturing Sdn Bhd for RM6mn, raising the group's interest in the aluminium firm to 30%. ( 

• TRC Synergy Bhd has bagged a RM23.8mn contract from Department of Irrigation and Drainage to design and build a flood mitigation dam in Gombak, Selangor. 

• Orders for durable goods in the US jumped 5.4% last month. 

• The US core PCE price index advanced 3.2% YoY, the smallest rise since April 2021, after increasing 3.4% in October.

Source: TA Research - 26 Dec 2023