Review & Outlook

Blue chips climbed on Monday, led by construction, utility, plantation and oil & gas heavyweights, as trading momentum persisted on economic recovery and infrastructure plays. The FBM KLCI rose 8.09 points to close at 1,495.70, off an opening low of 1,488.60 and high of 1,498.52, as gainers led losers 628 to 470 on robust trade totalling 6.96bn shares worth RM4.21bn.

Given the recent strong gains and overbought momentum, stocks should be due for profit-taking pullback, which will be healthy to consolidate gains. On the index, further rise toward the 1,500 levels which capped upside in Jan 2023, and next hurdle at 1,520, may see it stalling for profittaking consolidation. Immediate chart supports are revised upwards to 1,480, and 1,450, with better supports at 1,440 and 1,430.

Globetronics will need breakout confirmation above the 76.4%FR (RM1.79) to aim higher and target RM1.92 and the 27/9/21 high (RM2.04) ahead, while the 100-day ma (RM1.54) cushions downside. Unisem need convincing breakout above the 61.8%FR (RM3.40) to aim for the 76.4%FR (RM3.74) and 22/11/21 high (RM4.28) going forward, with the 200-day ma (RM3.12) cushioning downside risk.

News Bites

• Bank Negara Malaysia international reserves rose by 0.62% to US$113.5bn (RM527.60bn) as of Dec 29 last year, from US$112.8bn a fortnight ago.

• Boost, the fintech arm of Axiata Group Bhd, together with its consortium partner, RHB Banking Group, has received the official approval from Bank Negara and the Finance Ministry to commence operations as a digital bank, with effect from Jan 15, 2024.

• AEON Credit Service (M) Bhd's associated company, AEON Bank (M) Bhd, has obtained approval from Bank Negara Malaysia and the Finance Ministry to commence its digital banking operations in Malaysia.

• Bintulu Port, which is currently under the purview of the Ministry of Transport, will be officially handed over to the Sarawak government in June this year.

• Kerjaya Prospek Group Bhd has secured two contracts totalling RM95.1mn from Eastern & Oriental Bhd's units.

• Capital A Bhd CEO Tan Sri Tony Fernandes will be meeting Thai Prime Minister Srettha Thavisin tomorrow to address foreign ownership limits for airlines of no more than 49% in Southeast Asia's second largest economy.

• GHL Systems Bhd said it is offering Mastercard Click to Pay - designed to drive higher conversion rates for merchants while ensuring a secure payment solution for consumers - to 2,000 of its e-commerce merchants.

• Contraves Advanced Devices Sdn Bhd and Contraves Electrodynamics Sdn Bhd - subcontractors of the RM9.13bn littoral combat ship project awarded to Boustead Naval Shipyard Sdn Bhd - have dropped their lawsuit against BNS over the termination of their contracts.

• Perak Corp Bhd has entered into a joint development agreement with Advancecon Development Sdn Bhd to undertake the main infrastructure works for the Silver Valley Technology Park industrial hub in Ipoh, which has a GDV of RM1bn.

• Straits Energy Resources Bhd has secured a contract worth RM40.7mn from Puncabahan Sdn Bhd for the construction of additional space and upgrading of the emergency medical department for a hospital.

• Abang Abdillah Izzarim Abang Abdul Rahman Zohari, the newly appointed executive chairman as well as the largest shareholder of Minetech Resources Bhd, has upped his stake in the company to 16.4% from 15.6% previously.

• Johor Plantations Group Bhd has filed its prospectus exposure for its IPO with the Securities Commission Malaysia, with Johor Corp, through Kulim (M) Bhd, seeking to retain 65% stake post-listing.

• Chinese authorities indicated they may lower the amount of money banks must set aside as reserves to boost lending.

Source: TA Research - 9 Jan 2024