TA Sector Research

Daily Market Commentary - 21 Feb 2024

Publish date: Wed, 21 Feb 2024, 12:21 PM

Review & Outlook

The local blue-chip benchmark climbed to a fresh 21-month high on Tuesday, fuelled by strong gains in oil & gas (+5.7%), utility (+0.9%) and plantation (+0.6%) heavyweights, on foreign-led buying after the local currency weakened sharply to approach USD4.80. The FBM KLCI surged 16.98 points, or 1.1%, to end at the day's high of 1,555.59, off an early low of 1,537.94, as gainers led losers 615 to 425 on improved turnover totalling 3.7bn shares worth RM2.94bn.

Sector rotation should continue to highlight trading near-term, with market volatility seen to increase as the index approach 2-year highs, when it topped out at the 1,600/1,620 levels in early 2022. Immediate resistance is revised higher to 1,580, with stronger upside hurdles coming at 1,600 and 1,620. Key supports cushioning downside on profit-taking pullbacks will be at 1,530, 1,508 and 1,495, the respective rising 10-day, 30-day and 50-day moving averages.

DNEX will need to overcome overhead resistance from the 100-day ma (40sen) and 200-day ma (43sen) to extend recovery momentum towards 46sen and 53sen prior to profit-taking pause, while the lower Bollinger band (32sen) limits downside risk. Wasco need to sustain breakout momentum above the 138.2%FP (RM1.30) to target the 150%FP (RM1.36) and 161.8%FP (RM1.43) ahead, while uptrend support from the rising 30- day ma (RM1.12) and 50-day ma (RM1.07) cushion downside.

News Bites

  • Malaysia's exports rose 8.7% YoY to RM122.43bn while imports jumped 18.8% to RM112.3bn in January.
  • Malaysia's total vehicle sales rose 31% YoY to 65,499 units last month from 50,168 units in the previous corresponding period, according to the Malaysian Automotive Association.
  • The recent performance of the ringgit, like other regional currencies, are impacted by external factors such as market adjustments to shifting US interest rate expectations, geopolitical concerns, and uncertainties surrounding China's economic outlook, according to Bank Negara.
  • Malayan Banking Bhd announced a slew of top management changes on Tuesday, including the appointment of Datuk Muzaffar Hisham, currently its group CEO of global banking, to succeed Datuk Mohamed Rafique as the group CEO of Islamic banking and CEO of Maybank Islamic Bhd.
  • Green Packet Bhd is teaming up with Tass Tech International Sdn Bhd to develop a tourism digital platform for Sri Lanka, with an initial investment of up to RM13.0mn.
  • MST Golf Group Bhd is collaborating with Trackman, a provider of indoor golf technology, to bring the latter's cutting-edge technology to Asia.
  • KPJ Healthcare Bhd aims to exit the Australian healthcare market within two years, according to its president and managing director Chin Keat Chyuan.
  • Sunway Construction Group Bhd reported a 7.9% rise in its net profit for 4QFY23 to RM49.3mn from RM45.7mn, thanks to higher progress billings and output at its precast segment.
  • Supermax Corp Bhd reported its fifth consecutive quarter of net loss at RM44.4mn in the 2QFY24 due to continued weak demand postpandemic and low selling prices due to stiff competition.
  • Globetronics Technology Bhd warns of persisting macroeconomic and geopolitical challenges impacting the semiconductor industry that result in unpredictable market conditions, as its net profit about halved in 4QFY23 to RM6.5mn from RM12.1mn a year ago.
  • Gas Malaysia Bhd's net profit rose 9.6% to RM104.3mn in 4QFY23 from RM95.2mn a year ago, despite lower revenue, helped by lower tax expenses in the quarter.
  • Hibiscus Petroleum Bhd's net profit surged 45.2% to RM102.3mn 2QFY24 from RM70.5mn a year earlier, driven by higher average realised oil prices and lower operating costs.
  • Hume Cement Industries Bhd's net profit rose 13-fold YoY to RM59.1mn in 2QFY24 from RM4.5mn in the previous year's corresponding quarter, on improved cement selling prices and sales volume.
  • China cut the five-year loan prime rate by 25 basis points to 3.90% from 4.20% previously, while the one-year LPR was left unchanged at 3.45%.
  • The Conference Board on Tuesday abandoned a long-running call for the U.S. economy to fall into recession, although its Leading Economic Index still sees economic output flatlining in the months ahead.

Source: TA Research - 21 Feb 2024

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