Review & Outlook

Stocks fell for profit-taking pullback on Tuesday, as overbought momentum and recent strong gains encouraged market players to reduce trading commitments. The FBM KLCI added 3.13 points to settle at 1,498.83, off an early high of 1,503.93 and low of 1,496.84, as losers beat gainers 605 to 410 on strong turnover of 6.44bn shares worth RM3.76bn.

The local market should pause for profit-taking, which will be healthy to rebuild support, consolidate recent strong gains and ease current overbought conditions. On the index, profit-taking should stall rise towards the 1,500 levels which capped upside in Jan 2023, with next hurdle at 1,520. Immediate chart supports are currently at 1,480, and 1,450, with better supports at 1,440 and 1,430.

Bumi Armada need to climb above the 100-day ma (53sen) and 200-day ma (55sen) to enhance upside momentum and aim for the 61.8%FR (57sen) and 76.4%FR (63sen) ahead, while the 38.2%FR (47sen) cushions downside. Velesto will need breakout confirmation above the 27/2/23 high (28.5sen) to fuel further upside towards 32sen, the 123.6%FP (34sen) and 138.2%FP (36sen) going forward, while the 61.8%FR (20sen) cushions downside risk.

News Bites

• Sunway Construction Group Bhd and the National Highway Authority of India have reached a settlement regarding the East West Corridor highway construction project, with NHAI agreeing to pay 375.3mn rupees (RM21.0mn) to Sunway Construction Sdn Bhd.

• Datasonic Group Bhd has received a letter of award and 4 contract extensions from the Ministry of Home Affairs worth a total of RM175.0mn.

• Kelington Group Bhd has secured an RM143.0mn contract from China's largest semiconductor foundry to build a gas hookup system in Shanghai.

• Kumpulan Perangsang Selangor Bhd, controlled by the Selangor government, is planning to divest a 50.0% stake in Kaiserkorp Corporation Sdn Bhd to AI Dream (HK) Ltd for RM265.5mn cash.

• Allianz Malaysia Bhd has declared second interim dividends of 69.0sen per ordinary share and 82.8sen per irredeemable convertible preference share for the FY23.

• Leong Hup International Bhd has appealed the Malaysia Competition Commission's decision to fine its wholly-owned subsidiary Leong Hup Feedmill (M) Sdn Bhd as an alleged member of a poultry feed pricefixing cartel.

• GDB Holdings Bhd's unit Grand Dynamics Builders Sdn Bhd has filed a winding-up petition with the High Court against KSK Land Sdn Bhd.

• Rohas Tecnic Bhd said a consortium led by the construction engineering group has secured a contract worth RM199.8mn under the Johor Bahru-Singapore Rapid Transit System Link project.

• Linbaq Holding Sdn Bhd founder Datuk Wira Ling Kah Chok has acquired all the stakes in Topspike Holdings Sdn Bhd, which currently holds 33.5% in Milux Corporation Bhd.

• Asia Media Group Bhd has proposed to change its name to MMM Group Bhd.

• The People's Bank of China will use a variety of tools to provide "strong support" for a reasonable growth in credit, said Zou Lan, head of the central bank's monetary policy department.

• Tokyo's core consumer price index, rose 2.1% YoY in December, matching a median market forecast.

• Federal Reserve governor Michelle Bowman on Monday retreated from her persistently hawkish view, saying she now sees US monetary policy as "sufficiently restrictive" and signaled her willingness to support eventual interest-rate cuts as inflation eases.

Source: TA Research - 10 Jan 2024