Review & Outlook

Last week's profit-taking pullback from a fresh 21-month high forced hook-downs on short-term momentum indicators from extreme overbought conditions on the FBM KLCI, suggesting further profit-taking consolidation is likely before overbought technical momentum neutralize. Sentiment wise, it is key that positive domestic catalysts support the current uptrend, with focus likely on the proposed high speed rail from KL to Singapore and the Johor/Singapore Special Economic Zone, given the planned meeting by the federal and state governments in Johor this week, reflecting the government's urgency and commitment in ensuring a smooth and speedy implementation of the projects.

Key index supports cushioning downside on profit-taking pullbacks will be at 1,538, 1,516 and 1,501, the respective rising 10-day, 30-day and 50-day moving averages. Immediate resistance remains at 1,580, with stronger upside hurdles coming at 1,600 and 1,620.

As for stocks picks this week, selected construction, oil & gas and technology counters such as MRCB, Sunway Construction, UEM Sunrise, WCT Holdings, Bumi Armada, Velesto, SKP Resources and VSI should attract bargain hunters for potential rotational plays ahead.

News Bites

• Malaysia's consumer price index rose 1.5% YoY in January, the same pace since November 2023.

• Malaysia's leading index rose 0.3% YoY to 110.1 points in December 2023, painting a favourable economic outlook in 2Q24.

• Axis Real Estate Investment Trust's trustee, RHB Trustees Bhd has entered into a sale and purchase agreement to acquire an industrial complex, from Amsteel Mills Sdn. Bhd. for a cash consideration of RM49.0mn.

• Pharmaniaga Bhd has submitted its regularisation plan to Bursa Malaysia, marking a critical milestone in its efforts to recover, enhance its financial standing and exit Practice Note 17 status.

• Landmarks Bhd said a buyer has been found for its wholly-owned unit Andaman Resorts Sdn Bhd's luxury resort, The Andaman, in Langkawi.

• Sime Darby Property Bhd's net profit for the 4QFY23 rose 27.3% to RM131.3mn from RM103.2mn a year earlier, thanks to strong topline contributions and higher profit from the property development segment.

• Telekom Malaysia saw its net profit more than double in 4QFY23 to RM433.5mn from RM160.2mn a year ago thanks to tax credits and higher data revenue as well as lower costs.

• Malakoff Corp Bhd turned to a net loss of RM357.1mn in 4QFY23 from a net profit of RM41.9mn last year, dragged by the group's independent water and power producer associate in Bahrain.

• IOI Corp Bhd's net profit for the 2QFY24 shrank 52.9% YoY to RM335.4mn from RM712.1mn, mainly due to lower contribution from the resource-based manufacturing segment.

• MR DIY Group (M) Bhd's net profit increased 16.6% to RM158.6mn in 4QFY23 from a year earlier, thanks largely to the expiry of a one-off corporate windfall tax.

• Sports Toto Bhd's net profit shrank 63% to RM24.2mn in 2QFY24 from RM64.9mn in 2QFY23, due to lower sales at both its lottery and luxury car businesses, as well as higher operating costs.

• Matrix Concepts Holdings Bhd's net profit logged a 5.3% rise in its 3QFY24 to RM57.2mn from RM54.4mn a year earlier, as gross profit margin improved due to changes in the product mix.

• Greatech Technology Bhd's net profit climbed 12.8% to RM41.6mn for 4QFY23 from RM36.8mn due to lower revenue recognised from its production line system.

• SAM Engineering & Equipment (M) Bhd posted a 52.8% increase in its net profit for 3QFY24 to RM29.3mn, from RM19.2mn a year earlier, thanks to higher profit contribution from both its equipment and aerospace segments.

• Aeon Co (M) Bhd's net profit rose 31% to RM32.6mn in 4QFY23 from RM24.9mn a year earlier, thanks to higher occupancy rate, rental renewals and cost control.

• Prices of new houses in the major 70 cities in China decreased 0.37% from the previous month, when they fell 0.45%.

Source: TA Research - 26 Feb 2024