TA Sector Research

Daily Market Commentary - 18 Apr 2024

Publish date: Thu, 18 Apr 2024, 10:16 AM

Review & Outlook

The local market staged a mild rebound Wednesday, led by construction, technology, healthcare and oil & gas stocks, as investors returned to bargain hunt after the recent price corrections. The FBM KLCI rose 5.42 points to settle at 1,540.42, off an intra-day low of 1,532.95 and high of 1,541.88, as gainers led losers 717 to 318 on reduced turnover of 3.45bn shares worth RM2.67bn.

While the market should consolidate on concerns strong US growth and inflation could keep interest rates higher for longer, oil & gas related stocks should see buying support as geopolitical risks in the Middle East stay elevated. Immediate index supports are at 1,533 and 1,512, the respective 50-day and 100-day moving averages, with better support at 1,500. Overhead resistance will be at the recent high of 1,565, with stronger upside hurdles seen at 1,580 and 1,600.

Velesto will need breakout confirmation above the 28/2/24 high (31.5sen) to extend recovery towards the 123.6%FP (37sen) and 138.2%FP (41sen) ahead, with downside cushioned by the 200-day ma (25sen). Meanwhile, Wasco need to overcome the 150%FP (RM1.36) decisively to enhance upside potential towards the 161.8%FP (RM1.42) and 176.4%FP (RM1.51) going forward, while the 100-day ma (RM1.13) should provide strong uptrend support.

News Bites

  • The International Monetary Fund has revised the outlook for Malaysia's real GDP by a notch to 4.4% this year from its earlier prediction of 4.3%.
  • Malaysia will cut petrol subsidies this year as it seeks to narrow its fiscal deficit, according to the country's economy minister.
  • Maxis Bhd has invested RM813mn in FY2023 to enhance its mobile network capacity, grow its fibre-to-the-premise footprint, and improve digitalisation across the company.
  • Bank Islam Malaysia Bhd managed to mitigate the impact of the static overnight policy rate, leading to an improved net income margin over the course of last year.
  • Malayan Flour Mills Bhd is investing a total of RM100mn in the FY2024, of which RM32.0mn will be used to install a new milling line in Lumut.
  • Menang Corp (M) Bhd had signed an agreement to acquire 20% of an Indonesian healthcare joint venture for RM4mn and to subscribe up to 30mn preference shares for RM30mn in the JV.
  • Heitech Padu Bhd has proposed a private placement of 10.1mn new ordinary shares, raising gross proceeds of RM23mn., which will be utilised for working capital.
  • Reservoir Link Energy Bhd's sub-subsidiary Founder Energy Sdn Bhd has secured a contract worth about RM22mn from JS Solar Sdn Bhd for the sub-contracting works of a 50MWac solar farm in Kulim, Kedah.
  • Malaysian Genomics Resource Centre Bhd's wholly-owned subsidiary MGRC Healthcare Sdn Bhd is collaborating with De Cell Bhd for the commercialisation of the former's cell-gene therapy programme.
  • The manager of IGB Real Estate Investment Trust said it is cautious on retail sales growth, which it expects to affect the performance of its tenants in shopping malls.
  • The Employees Provident Fund has ceased to be a substantial shareholder of Affin Bank Bhd after disposing of three million shares in the banking group.
  • Excel Force MSC Bhd said Chinese national Chen Hui had ceased to be a substantial shareholder after he disposed of 30mn shares or a 4.9% stake in the company for RM10.2mn.
  • Singapore's non-oil domestic exports slumped 20.7% YoY in March, much faster than the 0.2% slight fall in the previous month.
  • The US economy has "expanded slightly" since late February and firms reported greater difficulty in passing on higher costs, the Federal Reserve said in its Beige Book survey of regional business contacts.
  • Europe's economy is nearing the end of a malaise that's resulted in more than a year of near stagnation, according to European Central Bank President Christine Lagarde.

Source: TA Research - 18 Apr 2024

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