Review & Outlook

Profit-taking in plantation, telco and consumer heavyweights dragged the local blue-chip index lower Wednesday, with most market players sidelined ahead of a local religious and Good Friday market holidays. The FBM KLCI shed 7.82 points to close at 1,530.60, off an opening high of 1,536.58 and low of 1,528.52, as losers beat gainers 645 to 422 on moderate turnover of 3.75bn shares worth RM3.1bn.

Blue chips should trade sideways ahead of the weekend, as investors keenly anticipate release of the key US PCE price index for inflation leads, while rotational play on construction and property stocks pick up steam. Stronger index supports cushioning downside will be at 1,525 and 1,503, 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.

Ekovest will need convincing breakout above the 61.8%FR (52sen) to extend upswing towards the 76.4%FR (56sen), with next key resistance seen at the 8/1/24 peak (62sen), and key retracement support at the 38.2%FR (45sen) cushioning downside risk. Meanwhile, IWCity need to decisively climb above the 76.4%FR (91sen) to reinforce uptrend momentum and aim for the 8/1/24 peak (RM1.03) and 123.6%FP (RM1.15) going forward, while key uptrend support from the 100-day ma (73sen) limits downside risk.

News Bites

• CIMB has targeted total loan growth of between 5% and 7%, a return on equity of between 11% and 11.5%, a cost-to-income ratio of below 46.9% and loan loss coverage of between 30 and 40 basis points in 2024.

• Gamuda's net profit rose 7.3% YoY to RM208.8mn in 2QFY24 on the back of higher revenue from its overseas projects. For 1HFY24, the group's net profit fell 70.4% YoY to RM403.8mn.

• V.S. Industry's net profit for 2QFY24 fell 47.3% YoY to RM16.0mn due to reduction in orders from key customers. For 1HFY24, net profit amounted to RM65.0mn, down 28.6% YoY.

• Crescendo recorded a net profit of RM21.6mn for 4QFY24. For FY24, the group's net profit more than doubled to RM57.1mn driven by rising home sales and high margin industrial land disposal.

• KNM has proposed to dispose of its entire stake in FBM Hudson Italiana SpA for EUR16.5mn (RM84.8mn), which is expected to result in an estimated loss of approximately RM94.3mn.

• Theta Edge said it has teamed up with India-based power transmission giant KEC International Ltd in bidding for Tenaga Nasional Bhd future grid projects.

• Eduspec Holdings has received a letter of award from EG Industries to perform independent testing services for 5G optical modules and other related components, worth RM30.0mn.

• Box-Pak has entered into a conditional in-principle land sublease agreement with Idico Corp for the sublease of a 50,000 sqm plot of industrial land within the Long An Province, Vietnam, for RM34.3mn.

• Computer Forms' shareholders voted out executive director and key senior management Pang Nan Yew at its annual general meeting.

• Knusford is disposing of a freehold piece of land measuring 275,832 sqft in Klang, Selangor to Emerald Plan Sdn Bhd for RM28.0mn.

• KJTS Group has secured 6 contracts from Jabil Sdn Bhd and Jabil Circuit Sdn Bhd for the provision of housekeeping services and floor polishing activities. The contract amount is not stated in the award letters.

• Meridian announced that it will not be able to release its annual report for FY23 by Mar 29, 2024

• Malaysia's PPI increased by 0.3% in February 2024 from -0.6 % in January 2024, contributed by the growing of perennial crops (8.1%), fishing (7.5%) and animal production (4.3%) indices.

• The MOF did not introduce the HVGT Bill in the current session of Parliament. As a result, the implementation of HVGT will no longer take place on May 1, which was the date proposed during the Budget 2024 speech.

• The U.S. economy grew at a solid 3.4% annual pace from October through December. For 2023, the U.S. economy grew 2.5%, up from 1.9% in 2022.

• China plans to issue some policy bank bonds earlier in the second quarter. Chinese Premier Li Qiang said the government plans to issue one trillion yuan (US$139bn) in special ultra-long-term treasury bonds.

Source: TA Research - 29 Mar 2024