TA Sector Research

Daily Market Commentary - 28 Feb 2024

Publish date: Wed, 28 Feb 2024, 11:35 AM

Review & Outlook

The local blue-chip benchmark climbed to reach a fresh 21-month high Tuesday, supported by buying in key construction, plantation and utility heavyweights, while the broader market extended consolidation. The FBM KLCI ended up 11.2 points at 1,558.80, off an opening low of 1,545.16 and high of 1,559.02, but losers edged gainers 570 to 548 on active trade totalling 3.88bn shares worth RM3.09bn.

The broader market should extend sideways trade pending fresh domestic catalysts to lift stocks from current consolidation, while investors await more cues from the region on the inflation trend. Key index supports cushioning downside on profit-taking pullbacks will be at 1,543, 1,520 and 1,505, 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.

SunCon will need decisive breakout above the 21/2/24 high (RM2.79) to extend rally and aim for the 176.4%FP (RM2.87) and 200%FP (RM3.05) ahead, with immediate support from the 123.6%FP (RM2.46) to cushion profit-taking dips. WCT Holdings need to overcome the upper Bolllinger band (57sen) to aim for the 76.4%FR (61sen), with tougher hurdle from the 15/10/21 high (69sen), while the 50%FR (52sen) and 200-day ma (49sen) cushion downside.

News Bites

  • Malaysia's Producer Price Index fell a marginal 0.6% in January 2024 versus -1.3% in December 2023.
  • The meeting of the National Action Council on Cost of Living on March 20 will discuss the proposal to exempt water and electricity bills from the sales and service tax hike.
  • Penang International Airport's plans for expansion have been approved by the Cabinet and will cost more than RM1.0bn, which will be borne by Malaysia Airports Holding Bhd through an investment-recovery model.
  • Sapura Energy Bhd has announced Kitar Solutions, which aims to simplify the decommissioning process through integrated engineering, preparations, removal and disposal services.
  • Niche Capital Emas Holdings Bhd has ended collaboration talks with an Indonesian nickel mining company for a nickel mining venture, but keeps the possibility open for the potential partnership to be revisited in the future.
  • Petronas Gas Bhd's net profit rose 7.0% YoY to RM441.6mn in 4QFY23 on lower other expenses, financing costs and higher contribution from joint venture companies, offset by lower other income and higher tax expenses.
  • Alliance Bank Malaysia Bhd's net profit for the 3QFY24 dipped 0.13% YoY to RM176.9mn, dragged by higher operating expenses that partially offset the gains from higher net interest and other operating income.
  • Malaysia Building Society Bhd posted a 50% YoY jump in 4QFY23 net profit to RM301.2mn after recording a one-off gain of RM354mn from the acquisition of MIDF Group.
  • Nestlé (Malaysia) Bhd closed FY23 on a higher note as its fourthquarter net profit rose 11.5% YoY to RM148.1mn, thanks mainly to the absence of the prosperity tax.
  • Heineken Malaysia Bhd's 4QFY23 net profit dipped 5.3% YoY to RM99.1mn in 4QFY2022, as it recorded lower sales as consumer sentiment weakens amid rising cost of living and macro-economic concerns.
  • Unisem (M) Bhd's net profit for FY23 fell 79% YoY to RM80.2mn due mainly to lower sales volumes in line with softer market demand.
  • Leong Hup International Bhd's 4QFY23 net profit fell 10.0% YoY to RM81.6mn, due to margin compression from lower price of broiler chickens in Malaysia, the Philippines and Vietnam.
  • Mah Sing Group Bhd said its 4QFY23 net profit climbed 38% YoY to RM64.7mn, thanks largely to higher margin and lower net finance costs.
  • Velesto Energy Bhd's 4QFY23 net profit amounted to RM66.7mn, compared to net loss of RM26.0mn a year ago, thanks to higher work progress, higher asset utilisation and higher charter rates.
  • Padini Holdings Bhd said its net profit declined 27.4% YoY to RM53.1mn in the 2QFY24 due to lower margin and higher staff costs.
  • UEM Sunrise Bhd's 4QFY23 net profit rose 33.6% YoY to RM27.3mn as higher revenue more than offset higher finance costs and a swing to the red by its joint venture and associates.
  • Japan's core consumer inflation slowed for a third straight month in January but beat forecasts and held at the central bank's 2% target, keeping alive expectations it will end negative interest rates by April.
  • The US Commerce Department said durable goods orders plunged by 6.1% in January after falling by a revised 0.3% in December.

Source: TA Research - 28 Feb 2024

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