Review & Outlook

Given the weak rebound attempt subsequent to a mid-week selloff on the FBM KLCI last week, blue chips are likely to extend sideways consolidation, despite the stronger performance seen in external markets. Still, rotational plays on lower liners, specifically in the construction, property and oil & gas sectors should highlight trading as blue chips consolidate, while the local market await more concrete catalysts to lift the broader market to higher ground.

Stronger index supports cushioning downside will be at 1,524 and 1,501, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480. Immediate resistance remains at the recent 21- month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level.

As for stocks picks this week, selected telco, oil & gas, property and construction related counters such as Axiata, CelcomDigi, Bumi Armada, Velesto, Ekovest, IWCity, MRCB and UEM Sunrise should continue to attract bargain hunters anticipating rotational and situational plays ahead.

News Bites

• The safety and confidentiality of information within the Central Database Hub, managed by the National Digital Department, are guaranteed from leaks so far, said chief statistician Datuk Seri Dr Mohd Uzir Mahidin.

• The government will have to bear at least RM2bn a month for blanket petrol subsidies if it continues to delay the implementation of targeted subsidies, says Economy Minister Rafizi Ramli.

• Geopolitical instability, escalating inflation and a weakening ringgit contributed to volatility in Petronas Gas Bhd's material costs and operating expenses in 2023, says Chairman Adnan Zainol Abidin.

• Velesto Energy Bhd has secured a 2-year contract extension for the provision of 3 jack-up rigs to Petronas Carigali Sdn Bhd, for a total contract value of USD265.0mn (about RM1.3bn).

• MNRB Holdings Bhd has issued a new subordinated sukuk murabahah amounting to RM420.0mn under its upsized sukuk murabahah programme announced in February, to fund the redemption of its previous subordinated sukuk murabahah or Tranche 1, worth RM320.0mn.

• Teladan Group Bhd has teamed up with the Melaka state government development agency, Melaka Corporation, to develop a 341.2-acre German Technology Park at Ayer Panas in Jasin, Melaka.

• EcoFirst Consolidated Bhd is alleging that its former directors had conspired with Kerjaya Prospek Group Bhd in the award of a RM404.4mn residential development project in June 2023, which was subsequently terminated in November.

• Maxim Global Bhd announced that its 51.0%-owned unit Maxim Pelangi Sdn Bhd is acquiring a parcel of land in Taman Maju Jaya, Johor Bahru, for RM167.0mn cash.

• Nestcon Bhd has accepted a letter of award for RM79.5mn under phase one of the Wawari township development in Johor Bahru.

• Steel Hawk Bhd got a one-year extension each to the 2 contracts it secured last year to provide pig trap system maintenance for Petronas Carigali Sdn Bhd.

• Yinson Holdings Bhd 4QFY24 net profit rose 62.5% YoY to RM278.0mn mainly due to the effect of charter day rate escalation.

• China has room to further cut banks' reserve requirement ratio, among other policy tools at its disposal, a deputy central bank head said, underlining market expectations for more easing measures to bolster the economy.

• Bank of Japan governor Kazuo Ueda said the central bank will eventually scale back bond purchases and allow market forces to set long-term interest rate moves.

• President Joe Biden on Saturday signed into law a US$1.2tn spending package, keeping the US government funded through a fiscal year that began six months ago.

Source: TA Research - 25 Mar 2024