TA Sector Research

Daily Market Commentary - 7 Feb 2024

Publish date: Wed, 07 Feb 2024, 11:26 AM

Review & Outlook

Stocks closed mixed on cautious trade Tuesday, as the profit-taking consolidation due to overbought momentum from recent gains persisted. The FBM KLCI was up 1.64 points to end at 1,512.98, after moving within early low of 1,508.99 and high of 1,513.98, as gainers edged losers 514 to 452 on slower turnover of 3.08bn shares worth RM2.17bn.

The profit-taking consolidation should prevail as investors remain cautious over recent cues that US interest rates may stay high-for-longer given the strong US economy. Key index supports cushioning downside will be at 1,490, 1,480 and 1,465, 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.

MRCB will be attractive to bargain on weakness for rebound upside towards the 161.8%FP (65sen), with next hurdles seen at 70sen and 200%FP (74sen), while the mid Bollinger band (55sen) and 30-day ma (52sen) cushion downside. UEM Sunrise should also attract buyers on dips, with key chart supports at the 30-day ma (96sen) and 100-day ma (84sen) capping downside risk, while a breakout above the 123.6%FP (RM1.11) should aim for the 138.2%FP (RM1.21) and 150%FP (RM1.30) ahead.

News Bites

  • Eco World International Bhd has proposed to undertake a RM500.0mn reduction in its issued share capital, which will facilitate the group's dividend distribution target of up to RM504.0mn in 2024 and 2025.
  • Bursa Malaysia has warned Reneuco Bhd that its shares will be suspended if it fails to submit its annual report for the financial year ended Sept 30, 2023, by Feb 8 and eventual delisting, if the group fails to issue the report within six months from tomorrow.
  • Redtone Digital Bhd has been awarded a MyGovUC 3.0 contract valued at RM398.1mn for the provision of communications to the Malaysian Administrative Modernisation and Management Planning Unit.
  • CelcomDigi Bhd has partnered with Ampang Jaya Municipal Council for the digital development of Hulu Kelang, Selangor.
  • Cloudpoint Technology Bhd is acquiring 75.0% equity interest each in Unique Central Sdn Bhd and Uniqcen Sales & Services Sdn Bhd for a total of RM26.8mn cash.
  • Seal Incorporated Bhd is diversifying into solar project EPCC by subscribing for ordinary and preference shares of MSR Green Energy Sdn Bhd in a RM15.0mn deal which could see the group raising its stake in the solar EPCC outfit to 20.0%.
  • NPC Resources Bhd has proposed to divest 7,505 acres of oil palm land in Sabah, held though three subsidiaries, for RM165.1mn.
  • Advancecon Holdings Bhd has secured a contract worth RM27.3mn from Mujur Minat Sdn Bhd that involves site clearing and earthworks construction for the Gamuda Gardens Park mixed development in Rawang, Selangor.
  • Excel Force MSC Bhd is buying the entire stake in Orca Capital Holdings Ltd from Honest Winner Ltd for RM18.1mn through the sale of shares and cash.
  • UEM Sunrise Bhd has partnered with Alliance Bank Malaysia Bhd in the Alliance Home Complete programme, making home ownership easily accessible and enhancing the home-buying experience.
  • Euro Holdings Bhd's former group managing director and major shareholder Datuk Seri Steven Lim Teck Boon and his father, Datuk Lim Chaw Teng, sold a 2.4% stake in the furniture maker for RM2.1mn.
  • Sanichi Technology Bhd has aborted the joint venture plan with Singapore-based FKS Holdings Pte Ltd to provide fresh produce such as seafood, wagyu beef, fruits and vegetables to international food and beverage industry players.
  • Bina Puri Holdings Bhd said it was hit with a winding-up petition by an indirect subsidiary of YTL Corporation Bhd, for an alleged unsettled amount of RM1.7mn.
  • Advance Information Marketing Bhd has secured a court declaration that its former executive director Chean Meng Hee had breached his fiduciary duties to the group concerning the sale of treasury shares.
  • British American Tobacco (Malaysia) Bhd's net profit declined 23.3% YoY to RM47.4mn in 4QFY23 from RM61.7mn a year ago, due to higher operating expenses.
  • Hartalega Holdings Bhd posted a quarterly profit of RM22.4mn in 3QFY24, versus a net loss of RM31.9mn a year before, thanks to lower raw material prices and cost savings from its operational rationalisation exercise.
  • Japan's inflation-adjusted real wages, a barometer of consumer purchasing power, fell 1.9% YoY in December but the pace of the decline slowed from a revised 2.5% drop in November.

Source: TA Research - 7 Feb 2024

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