TA Sector Research

Daily Market Commentary - 8 Feb 2024

Publish date: Thu, 08 Feb 2024, 12:09 PM

Review & Outlook

Blue chips extended sideways trade on Wednesday with most investors cautious over potential for the US interest rates to remain high due to the strong US economy and elevated inflation. The FBM KLCI ended flat at 1,513.11 (+0.13) after oscillating between high of 1,514.05 and low of 1,510.2, as losers edged gainers 552 to 385 on muted trade totalling 3.04bn shares worth RM2.08bn.

The local market should extend profit-taking consolidation amid lacking domestic leads and as market players wind down ahead of the extended Chinese New Year holiday break. Key index supports cushioning downside will be at 1,492, 1,481 and 1,466, 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.

Further weakness on Dialog shares would be attractive to bargain for oversold rebound towards the 76.4%FR (RM1.90), with next hurdles seen at the 61.8%FR (RM2.05) and 200-day ma (RM2.10), while crucial support will be at the 17/10/22 low (RM1.66). Hibiscus looks attractive to bargain at current levels for rebound upside to the 50%FR (RM2.73), while a confirmed breakout should aim for the 61.8%FR (RM2.93) and 76.4%FR (RM3.18) ahead, and the 200-day ma (RM2.45) provides strong downside cushion.

News Bites

  • Malaysia's industrial production index dipped by 0.1% YoY while the sales value of the manufacturing sector declined by 4.2% YoY to RM149.9bn in December 2023.
  • Malaysia's services producer price index rose 1% YoY in the 4Q2023.
  • An arbitral tribunal has awarded FGV Holdings Bhd's unit FGV Plantations (M) Sdn Bhd RM12.6mn in the plantation group's contract dispute with construction company Multazam Development Sdn Bhd concerning the latter's termination from an estate workers housing project.
  • Kuala Lumpur City Hall has expanded the scope of ITMAX System Bhd's contract to install and maintain the networked street lighting systems in Kuala Lumpur by RM47.2mn.
  • YTL Hospitality REIT is acquiring Syeun Hotel in Ipoh, Perak, for RM55mn cash from Syeun Hotel Bhd.
  • Ranhill Utilities Bhd had on 7 Feb 2024 achieved commercial operation date of its 50MWac large scale solar project under the Large Scale Solar Phase 4.
  • Although Penang has raised its water tariff, it is still the second-lowest average domestic tariff in Malaysia after Terengganu, said PBA Holdings Bhd chief executive officer K Pathmanathan.
  • Teo Seng Capital Bhd's wholly owned subsidiary Ritma Prestasi Sdn Bhd has entered into a 65:35 joint venture cum shareholders agreement with Shanghai Xiashu Intelligent Technology Co Ltd to set up JV company Trendata Science Sdn Bhd in Malaysia.
  • Econpile Holdings Bhd has secured a RM30mn contract from Chingsan Development Sdn Bhd to undertake substructure works for a 15- storey office building in Shah Alam.
  • LFE Corp Bhd has secured a RM11.0mn contract from Puncakcity Development Sdn Bhd for earthworks & related works.
  • Rexit Bhd's new substantial shareholders, Datuk Seow Gim Shen, Metaco Assets Holdings Sdn Bhd and Bemas Holdings Sdn Bhd, have extended a formal unconditional mandatory takeover offer to acquire all the remaining ordinary shares in the company for 85 sen per share.
  • One Glove Group Bhd plans to implement an internal reorganisation of its glove business to focus solely on its existing glove factory in Kamunting, Perak.
  • PLB Engineering Bhd has entered into a deal to sell a vacant piece of land in Bandar Tanjung Bungah, Penang, measuring 1,922 square metres, to Victorious Triumphant Sdn Bhd for RM11.5mn.
  • Reneuco Bhd, whose deadline to submit its latest annual report is 8 Feb 2024, has set its annual general meeting, a virtual one, on 27 March 2024.
  • Steel Hawk Bhd has secured a one-year contract extension from E&P O&M Services Sdn Bhd, a wholly owned subsidiary of Petronas Carigali Sdn Bhd, for the provision of scaffolding services for EPOMS' operations in Peninsular Malaysia to 9 Feb 2025.
  • M&A Equity Holdings Bhd said Siti Nur Aishah Ishak has ceased to be a substantial shareholder of the stock broking firm after she disposed of a 1.8% stake in the company for RM12.6mn.
  • KLCCP Stapled Group's net profit for 4QFY23 rose 37.6% YoY to RM384.6mn, primarily contributed by improvement in the hotel and retail segments.
  • US Treasury Secretary Janet Yellen wants to visit China this year, a US delegation told officials in Beijing, evidence that ties between the two economic superpowers are further stabilising.

Source: TA Research - 8 Feb 2024

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