TA Sector Research

Daily Market Commentary - 1 Apr 2024

Publish date: Mon, 01 Apr 2024, 11:37 AM

Review & Outlook

With most momentum and trend indicators on the FBM KLCI flashing hook downs amid weakening trend momentum signals following last week's choppy trading, there could be further easing in trading momentum as the market begins trading for the second quarter. Given investor reservation regarding the timeline for lowering trend on interest rates globally amid uncertainties over potential easing inflationary pressures, stocks are likely to extend sideways trade, pending more fresh market catalysts to breakout from current consolidation.

Stronger index supports cushioning downside will be at 1,526 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.

As for stocks picks this week, selected telco, banking and gaming blue-chips such as Axiata, CelcomDigi, AM Bank, CIMB, Maybank, RHB Bank, Genting Berhad and Genting Malaysia should attract renewed investor participation given their resilient medium-term uptrend pictures.

News Bites

  • The government has offered Gamuda Bhd's 60%-owned SRS Consortium Sdn Bhd civil works contracts on the first segment of the Penang Light Rail Transit and hopes to conclude talks with the company within six months.
  • Capital A Bhd said it has signed letters of intent with two Singaporebased companies for collaboration on travel and e-commerce services, as well as fintech solutions within the Asean region for airline passengers travelling to and from China.
  • Oil palm plantation player MKH Oil Palm (East Kalimantan) Bhd began taking orders from investors for its IPO on the Main Market which would raise up to RM155.4mn.
  • Malaysia Airports Holdings Bhd is looking at monetising its Turkish airport operations by divesting part of its 100% equity interest in Istanbul Sabiha Gökçen Uluslararasi Havalimani Yatirim Yapim ve ??letme AS, according to people familiar with the matter.
  • Mudajaya Group Bhd has redesignated its group managing director and chief executive officer James Wong Tet Foh as executive chairman, effective April 1, 2024.
  • Yinson Holdings Bhd has raised RM283.2mn from a private placement to support its energy transition business.
  • Jentayu Sustainables Bhd has received conditional approval from the Securities Commission Malaysia for the acquisition of Telekosang Hydro and Jentayu Solar assets.
  • Confinement centre operator LYC Healthcare Bhd said its 64.5%- owned subsidiary LYC Medicare Singapore Ltd has lodged a new preliminary offer document with Singapore Exchange Ltd for its listing proposed on the SGX's Catalist board.
  • The board of directors of Cypark Resources Bhd has requested selected key senior management officers, including its group chief executive officer Datuk Daud Ahmad, to go on unrecorded leave to facilitate a fully independent and transparent review process.
  • Separately, Cypark reported a net loss of RM27.7mn for its third quarter ended Jan 31, 2024, largely attributed to losses recorded by its waste management and waste-to-energy division due to adjustments made on the amortisation of trade receivables.
  • Sapura Resources Bhd swung into the red in the financial year ended Jan 31, 2024 with a net loss of RM35.9mn, versus a net profit of RM79.6mn a year ago, as higher revenue was more than offset by a smaller reversal on impairment and reduction of other income.
  • Stronger furniture demand from North America lifted Poh Huat Resources Holdings Bhd's net profit for its first quarter up 50.9% to RM10.3mn from RM6.8mn in the corresponding quarter a year ago.
  • China's official purchasing managers' index rose to 50.8 in March from 49.1 in February, offering relief to policymakers even as a crisis in the property sector remains a drag on the economy and confidence.
  • Core inflation in Japan's capital softened in March but continued to remain above the 2% target, adding to the dilemma of the Bank of Japan as to how to steer the monetary policy after exiting negative interest rates earlier this month.
  • Healthy US employment gains continued in March while wage growth moderated, indicating the nation's labour market is poised to keep stoking the economy with limited risk of an inflation resurgence.

Source: TA Research - 1 Apr 2024

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