Review & Outlook

While local retail sentiment could stay cautious following the recent multiple limit-down losses on selected small-cap stocks, the assurance from regulators that stock market fundamentals remain strong despite the increased volatility which was restricted to certain stocks should ease jittery investor sentiments. Technically, meanwhile, blue chips should continue to pause for profit-taking breather after the recent run-up to rebuild momentum for uptrend resumption ahead.

As for the index, immediate overhead resistance stays at the 1,500/1,510 zone, which restricted upside in Jan 2023, with next key hurdles seen at 1,520 and 1,550. Key index supports to watch on correction extension will be 1,465 and 1,455, the respective 50-day and 100-day moving averages, with 1,440/1,430 as stronger supports.

On stocks picks for this week, key banking, utility, construction and semiconductor related counters such as Maybank, Public Bank, Sime Darby, TM, Sunway Construction, Globetronics, Unisem and VSI should attract bargain hunters looking for rotational plays ahead.

News Bites

• According to advanced estimate by Department of Statistics, Malaysia's GDP grew 3.4% YoY and 3.8% YoY in the 4Q23 and 2023 versus consensus expectations of 4.1% YoY and 4.0% YoY respectively.

• Malaysia's trade fell 7.3% to RM2.637tn in 2023 dragged by slower global demand, lower commodity prices, geopolitical uncertainties, high inflation rate and downcycle in the semiconductor sector.

• The proposed targeted subsidy mechanism will be decided on by the Cabinet this week, according to Minister of Economy Rafizi Ramli.

• The Securities Commission and Bursa Malaysia have assured investors that the fundamentals of the Malaysian stock market remain strong despite the heightened volatility in certain stocks of late.

• Capital A Bhd now has up until June 30, 2024 to submit its proposal to regularise its Practice Note 17 condition after getting Bursa Malaysia's approval for another six-month extension - its fourth extension in a row.

• Eupe Corp Bhd is purchasing two additional parcels of freehold land in Sungai Petani, located in the Kuala Muda district of Kedah, for RM40.7mn.

• Betamek Bhd said investigations by the Malaysian Anti-Corruption Commission, which summoned its managing director Mirzan Mahathir for questioning, have nothing to do with the company.

• Edelteq Holdings Bhd has signed a MoU with a Chinese company and a Malaysian outfit to start semiconductor-related businesses locally and abroad.

• LB Aluminium Bhd is acquiring two factories and an office on a 4.6-acre freehold parcel of land in Beranang, Selangor, for RM30.4mn cash.

• Kinergy Advancement Bhd will team up with the Philippines' LCS Holdings Inc. to jointly develop and operate a 20 megawatt-peak solar photovoltaic plant in Santa, Ilocos Sur, the Philippines.

• YNH Property Bhd, in which prominent investor Datuk Dr Yu Kuan Chon is the largest shareholder with a 32.6% stake, shared details of a turnkey construction contract in relation to a RM150mn land deal in Desa Sri Hartamas in response to a query from Bursa Malaysia.

• TSA Group Bhd, which is slated for a listing on the ACE-Market of Bursa Malaysia on Feb 2, has seen its initial public offering oversubscribed by 8.6 times.

• Silver Ridge Holdings Bhd , whose shares price hit limit down again for a second consecutive day on Friday, revealed that the group is discussing several business proposals in its response to the unusual market activity query issued by Bursa Securities.

• Bursa Malaysia Securities Bhd has put a freeze on the lower limit share price for Jentayu Sustainables Bhd after the stock hit the limit down circuit breaker for two days in a row.

• Foreign direct investment into China shrank 8.0% YoY in 2023, the first time in over a decade.

• Three US Federal Reserve officials on Friday emphasised that incoming data will guide their decision on when to cut interest rates, and made clear they haven't seen enough evidence yet to begin easing.

Source: TA Research - 22 Jan 2024