TA Sector Research

Daily Market Commentary - 8 Jan 2024

Publish date: Mon, 08 Jan 2024, 11:27 AM

Review & Outlook

Last week's bullish breakout on the FBM KLCI which rallied to close at a fresh 12-month high has pivoted technical momentum and trend indicators into bullish mode, and was backed by strong follow-through buying momentum on the broader market, which supports further upside this week. The resurgent buying momentum should sustain strong trading commitments from market players, with momentum plays likely to focus on the construction, property, oil & gas, technology and utility sectors as recovery plays pick up steam.

As for the index, a convincing breakout on strong buying momentum above the 1,490/1,500 resistance level, which restricted upside in Jan 2023, will grease upside towards next key hurdles at 1,520 and 1,550, prior to stalling for profit-taking. Key chart support at 1,450 is expected to prevent further correction towards better supports at 1,440 and 1,430, with 1,400/1,390 as stronger support platform.

As for stocks picks for this week, we like key banking, telcos, oil & gas and semiconductor related counters such as AMBank, CIMB, Axiata, CelcomDigi, Bumi Armada, Velesto, Globetronics and Unisem for continuation of rotation and situational plays with more investors coming back into the market.

News Bites

  • The March 31 deadline for Malaysians and permanent residents to update their data in the Central Database Hub is crucial to the government's fiscal consolidation plans, according to Minister of Economy Rafizi Ramli.
  • UEM Sunrise Bhd, Telekom Malaysia Bhd and Iskandar Investment Bhd are shutting down the joint venture that they started nearly 10 years ago to provide smart in-building and smart city services around Iskandar Puteri, Johor.
  • Scientex Bhd's second attempt to buy prime land in Johor Baru from S P Setia Bhd, this time for RM548.0mn, has fallen through again.
  • MyEG Services Bhd's online renewal of work passes for foreign workers will resume on Jan 15, 2024.
  • Capital A Bhd chief executive officer Tan Sri Tony Fernandes intends to leave his current role within five years, including with its budget carrier AirAsia, The Star reported.
  • VS Industry Bhd has earmarked about RM60mn capex in FY24, which will be channelled towards optimising costs.
  • Dayang Enterprise Holdings Bhd's unit, Dayang Enterprise Sdn Bhd has received a contract extension for the Provision of Pan Malaysia Maintenance, Construction and Modification from Abu Dhabi-based firm, Mubadala Energy.
  • Cahya Mata Sarawak Bhd said its subsidiary has been hit with a RM342.3mn counterclaim from state utility firm Syarikat Sesco Bhd in the pair's arbitration proceedings over a purchase power agreement dispute.
  • Perak Transit Bhd has proposed to undertake a bonus issue of up to 433.6mn new shares on the basis of one bonus share for every two existing ordinary shares.
  • Evergreen Max Cash Capital Bhd has acquired two additional pawnshops for RM5.5mn in strategic locations in Sri Petaling in Kuala Lumpur and Shah Alam.
  • Ecoscience International Bhd's wholly-owned subsidiary Ecoscience Manufacturing & Engineering Sdn Bhd is suing RDS Marketing Malaysia Sdn Bhd to recover RM2.4mn in unpaid dues.
  • Ta Win Holdings Bhd has proposed to team up with China-based energy cable manufacturing company Ningbo Kibor Wire & Cable Co Ltd to manufacture solar cables, tinned coated wires and other cable wire products.
  • Eversendai Corp Bhd is selling two parcels of land in Sungai Buloh, Selangor for RM63mn cash to repay bank borrowings.
  • ManagePay Systems Bhd said its wholly-owned unit has been appointed by Indonesian digital payment service provider PT Finnet Indonesia to provide white label services for its e-wallet and mobile application.
  • Global Oriental Bhd has entered into a conditional share sale and purchase agreement to acquire 450,000 ordinary shares in Edisijuta Parking Sdn Bhd for RM22.5mn.
  • Sentoria Group Bhd has appointed three new independent and nonexecutive directors Datuk Dr Ras Adiba Radzi, Dr Lim Zhao Qi and Lim Poh Seong in its latest boardroom shuffle.
  • The US nonfarm payrolls increased by 216,000 jobs last month while the unemployment rate was unchanged at 3.7%.

Source: TA Research - 8 Jan 2024

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