TA Sector Research

Daily Market Commentary - 15 Jan 2024

Publish date: Mon, 15 Jan 2024, 10:33 AM

Review & Outlook

The profit-taking pullback from a 14-month high last week managed to neutralize short-term overbought momentum on the FBM KLCI, while trend indicators remained positive, which suggest that the uptrend is still intact. A near-term profit-taking consolidation phase is preferred and will be healthy to consolidate recent gains and sustain further uptrend ahead. Meantime, on the external front, inflation jitters should be contained following the tamer US December wholesale inflation data released last Friday, offsetting the higher-than-expected consumer inflation numbers a day earlier.

As for the index, immediate overhead resistance will be at the 1,500/1,510 area, which restricted upside in Jan 2023, with next key hurdles seen at 1,520 and 1,550. Immediate chart support is at 1,480, with better supports at 1,450/1,440 and 1,430, and 1,400/1,390 acting as stronger support platform.

As for stocks picks for this week, key telco, utility, construction and oil & gas related counters such as Maxis, Tenaga, Gadang, Gamuda, Dialog, DNEX, Hibiscus Petroleum and Wasco should attract investors looking for situational plays, given the elevated global oil price due to the volatile geopolitical situation in the Middle East.

News Bites

  • After securing court permission to challenge the Inland Revenue Board's additional RM78.5mn tax assessment, Southern Power Generation Sdn Bhd, a 70%-owned unit of Tenaga Nasional Bhd is now in talks with the tax agency for a potential out-of-court settlement.
  • Sime Darby Bhd has extended the closing date for the acceptance of its takeover offer for UMW Holdings Bhd at RM5/share to 31 January 2024 from 17 January 2024.
  • AmBank Group announced the granting of an RM84.0mn financing facility to Malaysia Steel Works (KL) Bhd to facilitate its technological transformation into a sustainable steel producer of steel bars and billets with ultra-low greenhouse gas emissions.
  • IJM Corporation Bhd has signed a share sale agreement with Swift Haulage Bhd and Hartamas Mentari Sdn Bhd, acquiring a 25.0% stake in Global Vision Logistics Sdn. Bhd, which is developing Shah Alam International Logistics Hub.
  • Hextar Capital Bhd announced the successful completion of the acquisition of 6.8% stake in Binasat Communications Bhd, raising its stake in the satellite network support service provider to 24.8%.
  • Ranhill Utilities Bhd has received the letter from the National Water Services Commission on the renewal licence to treat and supply water to consumers in Johor for the next 3 years.
  • Cahya Mata Sarawak Bhd said that Norges Bank, which manages Norway's Government Pension Fund Global, is no longer a substantial shareholder after holding less than a 5.0% stake in the Sarawak-based cement manufacturer.
  • MST Golf Group Bhd has confirmed the opening of 5 more retail stores in Jakarta by 2024, after opening its first outlet in the Indonesian capital recently.
  • Uzma Bhd has entered into a memorandum of understanding with PT Pertamina Drilling Services Indonesia to explore potential collaborations in oil and gas and geothermal drilling services as well as other services.
  • NexV Manufacturing Sdn Bhd, a joint venture company between Careplus Group Bhd and GoAuto Group Sdn Bhd, will commence the construction of the country's first green technology facility dedicated to the manufacture and assembly of new energy vehicles, including electric vehicles, in Negeri Sembilan.
  • Eonmetall Group Bhd has received a notice of award and offer from the district and land office of Klang invoking the compulsory acquisition of about 0.9 hectare of industrial land for RM30.4mn.
  • Bintai Kinden Corporation Bhd has been hit with a lawsuit by Dynamic Prestige Consultancy Sdn Bhd, which is seeking a refund of RM16.2mn, plus 5% interest on the sum.
  • Scomi Energy Services Bhd announced new proposals to regularise its financial condition which will see a reduction of its issued share capital from RM445.5mn to RM35.0k, followed by a consolidation of every 20 existing shares into 1 consolidated share.
  • HE Group Bhd has priced its shares at 28.0sen/share for its initial public offering and will have a market capitalisation of RM123.2mn upon listing, with an enlarged share capital of 440.0mn.
  • China's consumer price index slipped 0.3% in December from a year earlier, in line with economists' expectations for a third straight month of declines. Factory-gate costs dropped 2.7%.
  • Atlanta Federal Reserve president Raphael Bostic said inflation could "see-saw" if policymakers cut interest rates too soon, warning that inflation's descent towards the central bank's 2% goal was likely to slow in the months ahead.

Source: TA Research - 15 Jan 2024

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