Review & Outlook

Blue chips rallied on Thursday, copying regional strength after Jerome Powell reaffirmed his view that the Federal Reserve will likely cut interest rates this year. The FBM KLCI gained 16.23 points to close at 1,553.24, off an high of 1,554.33 and low of 1,537.25, as gainers thrashed losers 656 to 351 on total turnover of 3.36bn shares worth RM2.68bn.

Even as stocks edge higher, underlying caution over the path of interest rate and inflation worries should keep buyers in check. Overhead resistance stays at the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level. Immediate index supports remains at 1,533 and 1,498, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480.

On AMMB, a decisive breakout above the 138.2%FP (RM4.46) should enhance upside momentum to the 150%FP (RM4.60), with tougher hurdles from the 161.8%FP (RM4.73) and 176.4%FP (RM4.89), while key supports are from the lower Bollinger band (RM3.94) and 76.4%FR (RM3.76). CIMB should rebuild support at current levels with recovery potential towards the 161.8%FP (RM7.07), with stronger profit-taking resistance anticipated at 176.4%FP (RM7.30) and 200%FP (RM7.68), while crucial chart supports from the 100-day ma (RM5.93) and 200-day ma (RM5.56) cushions downside risk.

News Bites

• Axiata Group Bhd, Malaysia's largest wireless carrier by revenue, announced its plan to sell its Myanmar tower business for USD150mn, approximately RM713mn, as part of its exit strategy from the Southeast Asian country.

• Crescendo Corp Bhd's wholly-owned subsidiary has entered into a conditional sale and purchase agreement with Microsoft Payments (Malaysia) Sdn Bhd for the disposal of a vacant parcel of freehold land measuring 1.1mn sq ft in Pulai, Johor, for RM132.5mn.

• MN Holdings Bhd via its wholly-owned subsidiary MN Power Transmission Sdn Bhd has secured a contract valued at RM26.0mn from Samaiden Sdn Bhd for engineering, procurement, construction and commissioning work for a large-scale solar photovoltaic plant in Kulim, Kedah.

• DRB-Hicom Bhd's 50.1%-owned unit Proton Holdings Bhd ended 1QCY24 with positive sales of 39.2k vehicles.

• Sapura Energy Bhd has secured a 5-year contract to provide panMalaysia underwater services for the Petronas group of companies and petroleum arrangement contractors.

• Sorento Capital Bhd, a distributor of bathroom and kitchen sanitary ware products, has filed for an initial public offering on Bursa Malaysia's ACE Market to raise funds for its expansion.

• Engineering services firm 3Ren Bhd has filed for an IPO on Bursa Malaysia's ACE Market to raise more funds for expansion, including setting up new delivery centres and an office in Singapore.

• The Bank of Japan cut its economic assessment for most regions on Thursday but signalled its confidence that wage hikes were broadening, leaving scope for another hike in the country's stilllow interest rates.

• Initial claims for state unemployment benefits rose 9,000 to a seasonally adjusted 221,000 for the week ended March 30, the US Labor Department said.

• The European Central Bank's rate-setters were increasingly confident of inflation on track to reach the 2% target, but saw the need for patience even as they agreed the scope for an interest rate cut has strengthened.

• The Eurozone Producer prices fell 8.3% YoY in February, slightly faster than the revised 8.0% decrease in January.

Source: TA Research - 5 Apr 2024