TA Sector Research

Daily Market Commentary - 29 Feb 2024

Publish date: Thu, 29 Feb 2024, 11:23 AM

Review & Outlook

Profit-taking dragged Tenaga and key utility heavyweights lower on Wednesday, as disappointing current corporate earnings and cautious regional tone dampened sentiment. The FBM KLCI dipped 13.21 points to end at the day's low of 1,545.59, off an early high of 1,556.69, as losers trashed gainers 780 to 311 on higher turnover of 4.77bn shares worth RM3.3bn.

The local market should trade sideways with downward bias as investors assess the tail-end of the current corporate earnings season, while awaiting firmer leads from the global inflation trend. Key index supports cushioning downside on profit-taking pullbacks will be at 1,544, 1,522 and 1,506, 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.

SKP Resources need to decisively tackle overhead resistance from the 100-day ma (80sen) and 200-day ma (88sen) to enhance upside momentum and aim for the 61.8%FR (RM1.03) and 50%FR (RM1.15) ahead, with the lower Bollinger band (66sen) capping downside risk. VSI will need a confirmed breakout above the 76.4%FR (79sen) to target the 61.8%FR (84sen) and 50%FR (88sen) going forward, while the recent 31/1/24 pivot low (70sen) cushion downside.

News Bites

  • The service tax scope expansion and rate hike from 6% to 8% on select services is expected to generate an extra RM3 billion in revenue for the government's coffers, according to the Ministry of Finance.
  • Malaysia Airports Holdings Bhd said its passenger traffic went up 11.4% YoY, reaching 10.1mn passengers in January 2024.
  • Capital A Bhd is carving out the manager of its aviation brand AirAsia and injecting it into Nasdaq-listed special purpose acquisition company Aetherium Acquisition Corp for USD1.2bn, a move to pave way for its exit from PN17 status, besides selling its aviation business to AirAsia X Bhd.
  • Genting Bhd's Resorts World Genting said it will close 2 of its 3 casinos, Genting Casino 1 (Circus Palace) and Genting Casino 2 (Hollywood), effective 28 Feb 2024.
  • Ranhill Utilities Bhd's 30%-owned associate Ranhill Consulting Sdn Bhd has secured a seven-year contract worth RM7.5mn from Iskandar Regional Development Authority for the provision of delivery management office services for a highway improvement project.
  • Sunview Group Bhd has partnered with the Administration of Kashkadarya, Uzbekistan to explore possibilities of developing a 500 MWac solar photovoltaic plant in the region of Kashkadarya, with an estimated total cost of USD1bn.
  • Kumpulan Perangsang Selangor Bhd's 51%-owned subsidiary Aqua-Flo Sdn Bhd had secured a contract worth RM18.4mn for the supply of mechanical water meters.
  • AwanBiru Technology Bhd has been awarded a RM19.2mn contract from the Ministry of Higher Education for the supply of Google Workspace for Education to be utilised by public universities, polytechnics and community colleges throughout Malaysia.
  • Southern Score Builders Bhd, formerly known as G Neptune Bhd, has won a contract amounting to RM618.2mn to construct two blocks of apartment suites in Setapak, Kuala Lumpur.
  • Hong Leong Financial Group Bhd saw a 2.5% YoY growth in net profit to RM831.9mn for 2QFY24, driven by higher contributions from its commercial banking, investment banking and stockbroking divisions.
  • Press Metal Aluminium Bhd's 4QFY23 net profit rose 22.9% YoY to RM320.5mn, due to improved profit margins arising from lower raw material prices and higher profit contribution from associates.
  • PPB Group Bhd's net profit in 4QFY23 rose 6.2% YoY to RM441.4mn, despite a 21.6% YoY drop in revenue to RM1.3bn, boosted by higher share of results of associates, joint ventures, as well as lower finance costs and tax expense.
  • Berjaya Corp Bhd's net loss for 2QFY23 jumped to RM116.3mn from the RM24.8mn it incurred in 2QFY22, as its food retail business was badly hit by the boycott of Starbucks cafes amid the ongoing IsraelPalestine conflict.
  • MyEG Services Bhd's net profit for 4QFY23 doubled YoY to RM150.2mn, mainly contributed by its Zetrix blockchain platform.
  • Bumi Armada Bhd posted a net loss of RM165.5mn in 4QFY23, versus a net profit of RM210.7mn a year ago, on the back of impairment of Armada Kraken FPSO and subsea construction assets.
  • The US gross domestic product increased at a 3.2% annualized rate last quarter, revised slightly down from the previously reported 3.3% pace.
  • The Mortgage Bankers Association's index of mortgage applications for home purchases in the US dropped 4.5% in the week ended Feb 23.

Source: TA Research - 29 Feb 2024

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