Review & Outlook

While trend indicators for the FBM KLCI improve their positive signals following the recent climb to a fresh 17-month high, increasingly overbought momentum suggest a profit-taking consolidation should follow to aid a more sustainable uptrend ahead. Hence, it is key that more positive domestic catalysts emerge to sustain the uptrend going forward. More concrete news flow on infrastructure projects, such as the proposed high speed rail from KL to Singapore and the Johor/Singapore Special Economic Zone will be key to increase upside momentum and promote stronger investor participation.

Immediate overhead resistance for the index remains at 1,520, with stronger upside hurdles coming at 1,550 and 1,580. Key chart supports cushioning downside will be at 1,486, 1,476 and 1,462, the respective 30-day, 50-day and 100-day moving averages.

As for stocks picks this week, selected oil & gas, construction, semiconductor and rubber glove related counters such as Dialog Group, Hibiscus Petroleum, MRCB, UEM Sunrise, SKP Resources, VSI, Supermax and Top Glove should attract bargain hunters looking for rotational plays ahead.

News Bites

• Tenaga Nasional Bhd has embarked on a joint study with Japan's IHI Corporation to pioneer a small-scale co-firing project at its two thermal power plants in Lumut, Perak, and Port Dickson, Negeri Sembilan.

• TRC Synergy Bhd has secured a RM358.0mn contract from Impeccable Vintage Properties Sdn Bhd, a wholly-owned subsidiary of Khazanah Nasional Bhd.

• Abrdn plc has emerged as a substantial shareholder in SKP Resources Bhd after purchasing 78.9mn shares or a 5.1% stake in the electronics manufacturing services provider.

• T7 Global Bhd has marked its foray into Thailand waters with a RM400.0mn contract for its latest mobile offshore production unit named TSeven Shirley, which will be leased to Valeura Energy Inc, operator of the Nong Yao oil field, in support of its Nong Yao C development.

• Paragon Globe Bhd and Solarvest Holdings Bhd are planning to develop a solar-ready factory and green industrial township with12.5-megawatt peak in total renewable energy capacity in Johor Bahru.

• KJTS Group Bhd's subsidiary KJTN Engineering Co Ltd in Thailand has secured a RM16.8mn contract from Central World Hotel Co Ltd.

• Iskandar Waterfront City Bhd has failed in its bid to strike out a RM76.6mn lawsuit by Tenaga Nasional Bhd over alleged damage to the utility giant's undersea cable in Johor.

• Eastern & Oriental Bhd's executive chairman Datuk Tee Eng Ho and his brother, executive director Tee Eng Seng, raised their stake further in the property developer to 50.7% via the conversion of irredeemable convertible unsecured loan stocks.

• Jiankun International Bhd's wholly-owned unit JKI Development Sdn Bhd has been hit with another lawsuit by a former joint venture partner Fivestar Development (Puchong) Sdn Bhd, demanding RM14.2mn in alleged unpaid sums.

• Pestech International Bhd's executive director Lim Peir Shenq, son of the electrical power technology group's executive chairman and major shareholder Lim Ah Hock, had resigned on last Friday.

• Handal Energy Bhd has inked a joint venture agreement with DS Agriculture to collaborate on developing land into a tourism attraction through agro-tourism initiatives in Perak.

• ILB Group Bhd has appointed Tang Ming Yng as its new executive chairman effective Feb 5.

• PN17 company Perak Corporation Bhd is looking to raise RM63.5mn by entering into an early settlement of its entitlement over a 247.9- acre joint development project with ARX-YSC Sdn Bhd at Muallim, Perak.

• Westports Holdings Bhd's net profit fell 12.3% YoY to RM206.1mn in 4QFY23 from RM235.0mn a year earlier, due to a reduction in share of results of a joint venture which made a substantial write-back of impairment gain in 4QFY22.

• TMC Life Sciences Bhd's net profit surged 164.6% YoY to RM14.5mn in 2QFY24 from RM5.5mn a year earlier, due to the recovery of its fertility business.

• The US nonfarm payrolls increased by 353,000 jobs last month while wages increased 4.5% YoY and unemployment rate held steady at 3.7% YoY.

Source: TA Research - 5 Feb 2024