Review & Outlook

Bursa Malaysia shares fell for profit-taking correction on Monday, as traders reduced positions after the recent run-up to a fresh 17-month high and ahead of the extended Chinese New Year holidays. The FBM KLCI slid 5.24 points to close at the day's low of 1,511.34, off an early high of 1,520.98, as losers beat gainers 605 to 390 on total turnover of 3.22bn shares worth RM2.12bn.

Stocks should pause for profit-taking consolidation given overbought momentum sparked by the recent run-up on the index to a fresh 17-month high. Key index supports cushioning downside will be at 1,489, 1,478 and 1,464, the respective rising 30-day, 50-day and 100-day moving averages, while immediate overhead resistance remains at 1,520, with stronger upside hurdles at 1,550 and 1,580.

SKP Resources need to overcome the upper Bollinger band (80sen) to extend recovery towards the 100-day ma (83sen) and 200-day ma (92sen) ahead, while the lower Bollinger band (65sen) and 123.6%FP (62sen) limits downside risk. The rebound upside for VSI could be checked by overhead resistance from the 50-day ma (82sen) and 200-day ma (86sen), with tougher hurdle at the 61.8%FR (94sen), and downside capped by chart support at 70sen and 66sen.

News Bites

• Coastal Contracts Bhd's 50.0%-owned joint venture company in Mexico, Coastoil Dynamic SA De CV, has signed an addendum to the contract with Petroleos Mexicanos, extending the gas sweetening services contract at Perdiz Plant until 31 December 2025 with a maximum contract value of 2.8bn Mexican Pesos.

• Scientex Bhd has entered into a conditional sale and purchase agreement with Guan Hong Plantation Private Ltd for the proposed acquisition of 24 parcels of freehold land, all situated in Muar, Johor, for RM200.0mn.

• CapitaLand Malaysia Trust acquiring 3 prime freehold ready-built factories located at the Nusajaya Tech Park in Iskandar Malaysia, Johor from Nusajaya Tech Park Sdn Bhd for a combined RM27.0mn.

• Kuala Lumpur Kepong Bhd is undertaking an unconditional voluntary takeover offer to acquire the remaining 40.2mn shares in KLK Sawit Nusantara Bhd and the proposed cash offer for each share is set at RM3.42.

• FGV Holdings Bhd's subsidiary FGV Refineries Sdn Bhd is expected to increase the group's average sales by 9.0% with the launch of the Fract 750 Refinery at the Kuantan Port.

• Maxis Bhd has launched an investigation to determine the validity of an alleged cybersecurity breach to its systems after the "R00TK1T ISC Team" had published a claim that they gained access to data belonging to Maxis Communications.

• Swift Haulage Bhd's substantial shareholder Persada Bina Sdn Bhd, which currently holds a 35.2% stake in the group, is selling an 11.2% stake or 98.3mn shares in the group to Singapore-based logistics company JWD Asian Holding Pte Ltd for RM61.9mn or 63.0sen/share.

• Vestland Bhd has bagged a RM278.8mn contract to undertake design and building works for two blocks of service apartments and related facilities in Ara Damansara, Petaling Jaya.

• Chin Hin Group Bhd has signed share sale agreements with Teoh Hai Hin and Por Teong Eng for the acquisition of 30.3mn shares or 4.8% in Signature International Bhd for RM25.5mn.

• PJBumi Bhd's external auditor, Messrs. Chengco PLT has voluntarily resigned due to a disagreement over audit fees.

• Titijaya Land Bhd has entered into 97 separate sale and purchase agreements with Bank Negara Malaysia for the proposed acquisition of 5-storey, mediumcost flats in Subang Jaya, Selangor for RM44.5mn.

• Formula Mutakhir Sdn Bhd has filed a petition to wind up Ahmad Zaki Sdn Bhd, a wholly-owned subsidiary of engineering and construction group Ahmad Zaki Resources Bhd, for allegedly failing to settle an outstanding amount of RM118k.

• Salcon Bhd has secured a contract worth RM19.7mn from Penang Development Corp for the design, construction and upgrading of sewer pipelines and related works in Batu Kawan Industrial Park, Penang.

• YNH Property Bhd explained that ALX Asset Bhd was not able to raise enough funds for the purchase of its retail asset in Mont Kiara and as such the group had to terminate the RM270.5mn deal on Jan 26 while cancelling the proposed RM152.0mn disposal of AEON Seri Manjung in Perak to ALX.

• Hua Yang Bhd's net profit for 3QFY24 more than tripled to RM2.4mn from RM769k a year ago, thanks to steady construction progress of its apartment project in Bukit Mertajam, Penang.

• Guocoland (Malaysia) Bhd's net profit fell 37.9% YoY to RM5.3mn in 2QFY24 from RM8.5mn a year earlier, due to better gross margin previously amid the finalisation of development costs of a few projects and higher construction materials cost.)

• China's Caixin services Purchasing Managers' Index unexpectedly fell to 52.7 in January from a five-month high of 52.9 in the previous month.

• The Organisation for Economic Co-operation and Development forecast the world economic growth to ease from 3.1% in 2023 to 2.9% this year, better than the 2.7% expected in November.

Source: TA Research - 6 Feb 2024