Review & Outlook

Stocks stalled for profit-taking consolidation on Wednesday, as investors turned cautious following the ringgit's fall to the lowest since the Asian financial crisis, and await further cues on the US interest rate direction. The FBM KLCI slipped 3.19 points to close at 1,552.40, after ranging between early high of 1,554.95 and low of 1,547.49, as losers beat gainers 652 to 386 on steady turnover of 3.65bn shares worth RM2.71bn.

The local market should pause for profit-taking breather and turn cautious after the index's rally to a 21-month high, given the ringgit's weakness and pending stronger clues on US interest rate policy. Immediate resistance is retained at 1,580, with stronger upside hurdles coming at 1,600 and 1,620. Key supports cushioning downside on profit-taking pullbacks will be at 1,534, 1,511 and 1,497, the respective rising 10-day, 30-day and 50- day moving averages.

Globetronics appear attractive to bargain at current levels for recovery upside towards the 61.8%FR (RM1.63) and 76.4%FR (RM1.79) ahead, with downside cushioned by the 38.2%FR (RM1.37). Inari will need breakout confirmation above the 61.8%FR (RM3.28) to fuel further upside momentum towards the 76.4%FR (RM3.55) and 22/11/21 high (RM4.00) going forward, with the 100-day ma (RM2.99) and 200-day ma (RM2.86) cushioning downside.

News Bites

• Petchem has signed a MOU with Sarawak state-owned Sarawak Petchem Sdn Bhd to conduct a joint feasibility study to develop a low-carbon ammonia and urea plant in Bintulu, Sarawak.

• SunCon has secured a RM721.0mn shopping mall project in the Kinta district in Perak from Sunway Bhd in a related party transaction. This latest award raises SunCon's total secured new projects for the current year to RM831mn.

• Sime Darby is expected to increase car prices in Malaysia following a 2% rise in the service tax. The company has no plans to exit its motor business in China.

• Reneuco and Citaglobal said that their consortium has secured a 30- year concession to supply electricity to the East Coast Rail Line. As part of the concession, the consortium will develop the transmission and distribution interconnection facilities valued at RM600mn.

• Gamuda Land, the property arm of Gamuda Bhd, signed MOUs with 3 higher educational institutions on 3 Feb 2024 for the research on environment conservation.

• Sunway Property has set a sales target of RM2.6bn for FY24 after achieving RM2.4bn in sales and unbilled revenue of RM4.1bn for FY23.

• KLK has redesignated its CEO Tan Sri Lee Oi Hian as its executive chairman, following the retirement of Tun Raja Muhammad Alias Raja Muhammad Ali as the group's non-executive chairman on 21 Feb 2024.

• Globetronics Technology has seen a slew of changes to its board effective immediately, as the Ng family exits the company and APB Resources Bhd takes its position as the semiconductor firm's second-largest shareholder.

• Cuscapi announced the emergence of two new substantial shareholders, Datin Seri Lee Lan Moi and Jessie Lim Me Xian, after the pair respectively bought over 7% stakes in the point-of-sale systems provider.

• Hong Leong Industries' net profit for 2QFY24 jumped 39.4% YoY to RM102.5mn, attributed mainly to a favourable sales mix of motorcycle models and a disposal gain on its fibre cement board manufacturing business.

• Apex Healthcare's net profit fell 42.4% YoY to RM20.1mn in 4QFY23 from a year earlier but declared a special dividend following a record year thanks to a disposal gain. The drop in net profit was largely due to lower share of earnings from associates.

• The Israel-Palestine conflict boycott of the Starbucks franchise dragged Berjaya Food down to a record net loss of RM42.6mn for 2QFY24 against a net profit of RM35.5mn a year earlier.

• LBS Bina Group's 4QFY23 net profit rose 31.0% YoY, underpinned by increased contribution from its property development business and better progress of construction activities.

• Samaiden Group's net profit for 2QFY24 rose 22.1% YoY to RM3.2mn on the back of higher revenue. Quarterly revenue rose 21.4% YoY to RM48.8mn attributed to accelerated work progress of ongoing projects.

• The manufacturing industry operated at 79.8% capacity in 4Q23, edged down by 0.4 percentage points, from a rate of 80.2% in 4Q22, said DOSM.

• Japan aims to further strengthen investments and deepen comprehensive strategic partnerships between Malaysia and Japan this year.

• Indonesia's central bank left its benchmark interest rate unchanged for a fourth straight month to support a still vulnerable currency.

Source: TA Research - 22 Feb 2024