Review & Outlook

Given that technical trend indicators on the FBM KLCI have improved significantly following last week's recovery, near-term sentiment should somewhat recover, but the still cautious market undertone and weak follow-through buying momentum indicate recent gains will be tough to sustain, and prone to profit-taking and selling pressure as the market approach the Hari Raya Aidilfitri festival holiday break. Meanwhile, the lingering concerns over the path of the interest rate and the ongoing geopolitical tension in the Middle East between Israel and Iran will also act to dampen market sentiment for the immediate term.

Overhead resistance for the index will be the recent 21-month high of 1,559, followed by 1,580, with stronger upside hurdle seen at the 1,600 level. Immediate supports remain at 1,533 and 1,498, the respective rising 50-day and 100-day moving averages, with better support seen at 1,480.

As for the stock pick for the week, selected telco, constructions, technology and gaming stocks such as Axiata, CelcomDigi, Gadang, WCT Holdings, Globetronics, Inari, Genting Berhad and Genting Malaysia should continue to attract bargain hunters to accumulate on weakness for recovery play.

News Bites

• Malaysia's international reserves increased to US$113.8bn as of March 29, up from US$113.4bn recorded two weeks earlier, and is sufficient to finance 5.6 months of imports of goods and services and is equal to total short-term external debt, the central bank said in a statement.

• The government will seek avenues and make efforts to increase civil servants' salaries before the end of this year, Prime Minister Datuk Seri Anwar Ibrahim said

• Mah Sing Group Bhd has acquired a parcel of land in Pulai, Johor Bahru for RM103.8mn in cash through its subsidiary, Venice View Development Sdn Bhd.

• Velesto Energy Bhd said it expects to weather Saudi Aramco's broader suspension of jack-up rigs, as the oil-and-gas services firm remains "optimistic" of its financial performance until 2026.

• KLCC Property Holdings Bhd has issued Sukuk Wakalah worth RM2.0bn to finance the acquisition of a 40% stake in Suria KLCC Sdn Bhd.

• UEM Edgenta Bhd has secured contracts for hospital support services in Singapore for 5 years, valued up to RM963.5mn.

• MMAG Holdings Bhd's subsidiary, MJets Air Sdn Bhd, has been appointed by Malaysia Airlines Bhd to provide a regional cargo feeder network using narrowbody freighters for MAB Kargo Sdn Bhd starting 1 May 2024, for a 6-month period.

• TDM Bhd clarified that it has no plans to list its healthcare arm and has no knowledge any reason for the run up in its share price.

• Berjaya Land Bhd's aviation arm Berjaya Air Sdn Bhd is aiming for a 6% revenue growth YoY in the next 5 years, supported by 2 new turboprop aircraft, capacity expansion and possible new routes, both in Malaysia and the region.

• Haily Group Bhd has secured a RM59.5mn contract for a terrace house construction project in Johor Bahru.

• Asia Media Group Bhd will be traded and quoted under its new company name, MMM Group Bhd, from 9 April 2024.

• Keyfield International Bhd's public issue of 40mn shares under its initial public offering exercise has been oversubscribed by 9.7 times.

• Retirement Fund Inc (KWAP) has become a substantial shareholder of Farm Fresh Bhd after purchasing an additional 4mn shares or 0.2% stake on 3 April 2024, raising its stake to 5.1%.

• Fast Energy Holdings Berhad, a loss-making oil bunkering services provider, has become a significant shareholder in Vsolar Group Bhd by subscribing to 140mn shares in Vsolar's rights issue at 10 sen each, totaling RM14mn.

• Chin Hin Group Bhd has increased its stake in Chin Hin Group Property Bhd by 3.4% to 57.1%, buying 22.4mn shares at an average price of RM1.31 each for a total of RM29.3mn between 19 March and 24 April 2024.

• China's central bank will set up a CNY500bn (US$70bn) re-lending programme to support the country's science and technology sectors.

• US payrolls rose by 303,000 in March, the most in nearly a year and the unemployment rate dropped to 3.8% from 3.9% YoY, pointing to a strong labour market that's powering the economy.

Source: TA Research - 8 Apr 2024