Review & Outlook

The disappointing lack of strong window-dressing interest during the last trading week of 2023 forced technical momentum indicators on the FBM KLCI back into bearish mode, which suggests potential for further profittaking consolidation. Nevertheless, if investors do return to the local market from the year-end holidays in a big way, the situation may reverse positively and encourage broader participation from market players who have been largely sidelined recently. Meantime, externally, with optimism for a pivot to interest rate cuts by the US Federal Reserve next year in anticipation of a soft landing for the US economy, the positive tone should filter through to shore up domestic market sentiment.

On the index, it remains crucial that the 1,450 immediate support level hold to prevent further correction potential towards better supports at 1,440 and 1,430, while 1,400/1,390 should act as stronger support. For this brand new year, a breakout confirmation above the 1,470 immediate resistance is key to encourage further gain towards the 1,490/1,500 level, with next upside hurdles seen at 1,520 and 1,550 going forward.

As for stocks picks for this week, we like key gaming, construction, property and oil & gas related counters such as Genting Berhad, Genting Malaysia, Gamuda, Sunway Construction, MRCB, UEM Sunrise, Bumi Armada and Velesto for rotation and situational plays as investors gradually return from the year-end holidays.

News Bites

• Maxis Bhd will make a full and final settlement of RM73.0mn in relation to additional assessments with penalties imposed by the Inland Revenue Board, 2 years after it was given the assessments for the 2016 to 2020 period of RM477.0mn.

• CIMB Group Holdings Berhad, through CIMB Group Sdn Bhd, has completed the sale of its 25.01% and 25.0% shareholding in CGS-CIMB Securities International Pte Ltd and CGS-CIMB Holdings Sdn Bhd respectively, to CGS International Holdings Limited (formerly known as China Galaxy International Financial Holdings Limited).

• Malaysia Airports Holdings Bhd is said to be mulling over hiring an IJM Corporation Bhd-led consortium to carry on with the aerotrain replacement project that was halted in August 2023, according to sources familiar with the matter.

• Mah Sing Group Bhd is optimistic on the mid to long-term outlook for the property sector, supported by strong fundamental demand due to the young population.

• Kuchai Development Bhd has entered into a conditional master sale and purchase agreement with Sungei Bagan Rubber Company (Malaya) Bhd to dispose of substantially all its assets and liabilities to the latter at a disposal consideration of RM275.5mn.

• Minetech Resources Bhd's former executive chairman Datuk Awang Daud Awang Putera has ceased to be a substantial shareholder of the group after he offloaded 245.0mn shares on last Friday.

• Boustead Heavy Industries Corporation Bhd has received shareholders' approval for the debt settlement amounting to RM417.0mn which will assist its financial recovery.

• Cengild Medical Bhd has entered into a conditional sale and purchase agreement with Sunny Uptown Sdn Bhd for the acquisition of a stratified property in Kuala Lumpur for a cash consideration of approximately RM122.3mn.

• Harn Len Corporation Bhd has proposed to acquire an aquaculture outfit which owns 30 ponds on a 300-acre piece of land in Pekan, Pahang from its substantial shareholder, Mohamed Nizam Jakel, through a RM42.5mn share deal.

• Bintai Kinden Corporation Bhd has secured an agreement to settle RM3.0mn of debt with MBSB Bank Bhd, which will see the bank withdraw a legal suit arising from Bintai's default in March 2023.

• Berjaya Corporation Bhd is seeking an extension of time from 31 Dec 2023 to a later date to complete the transfer of its shares in its waste management unit, Berjaya Enviro Holdings Sdn Bhd, to Naza Corporation Holdings Bhd.

• Citaglobal Bhd said that it is still in "active discussion" towards a joint collaboration agreement with Petronas Global Technical Solutions Sdn Bhd for deployment of a Battery Energy Storage System.

• Chinese President Xi Jinping pledged to strengthen economic momentum and job creation in 2024.

• China's official purchasing managers' index fell to 49.0 in December from 49.4 the previous month.

• MNI Indicators said its Chicago business barometer tumbled to 46.9 in December from 55.8 in November.

Source: TA Research - 2 Jan 2024