TA Sector Research

Daily Market Commentary - 22 Apr 2024

Publish date: Mon, 22 Apr 2024, 11:09 AM

Review & Outlook

As short-term technical momentum indicators turn positive due to the FBM KLCI's rebound off lows from a mid-week selloff, there may be further near-term upside bias for the index this week. Nonetheless, absence of strong buying interest and positive local market catalysts will mean that rebound momentum will fizzle out, what with adverse foreign market sentiment with regard to the elevated Middle East geopolitical situation and increasing possibility that US interest rates will stay higher for longer with any rate cuts likely delayed to 2025 expected to dampen market tone.

Immediate overhead resistance for the index will be from the recent high of 1,565, with stronger upside hurdles seen at 1,580 and then 1,600. Immediate supports remain at 1,534 and 1,513, the respective rising 50- day and 100-day moving averages, with better support at 1,500.

As for the stock picks for this week, selected construction and rubber glove players such as Gamuda, Sunway Construction, Hartalega, Kossan Rubber, Supermax and Top Glove should attract bargain hunters on rotational plays, as trading momentum remains robust.

News Bites

  • Malaysia's economy grew by 3.9% in the 1Q2024, as compared to 3.0% in the previous quarter, according to Department of Statistics Malaysia's advance estimates.
  • Malaysia's exports totalled RM128.64bn in March, down 0.8% YoY.
  • MISC Bhd, via its petroleum arm AET, has entered into time charter party contracts with PETCO Trading Labuan Company Ltd for the world's first two ammonia dual-fuel Aframaxes, as it seeks to reduce overall emissions from its operations.
  • Maxis Bhd has reiterated its readiness to build the second 5G network and expressed full support for competition following the government's decision for a dual-model approach to 5G network deployment.
  • Westports Holdings Bhd said its new sukuk wakalah programme of up to RM5bn will provide the group with the flexibility to raise medium to long-term funding to meet business funding requirements and general corporate purposes.
  • Yinson Holdings Bhd said its indirect wholly-owned subsidiary Yinson Production Offshore Pte Ltd has successfully placed a US$500mn fiveyear senior secured bond issue.
  • Scientex Bhd aims to provide a total of 50,000 units of quality housing units at affordable prices nationwide by 2028.
  • Sime Darby Property Bhd has secured commitment for the remaining 30% of its industrial development fund to close at RM1bn.
  • Demand for palm products is projected to advance due to better economic conditions in 2024 said the Genting Plantations Bhd chairman Datuk Seri Mohd Zahidi Zainuddin.
  • Gas Malaysia Bhd's wholly-owned subsidiary, Gas Malaysia Distribution Sdn Bhd will adjust its rate by RM0.045 per gigajoules per day through a rebate to its base average tariff for Jan 1-Dec 31, 2024.
  • Hextar Capital Bhd's wholly-owned subsidiary, T&J Engineering Sdn Bhd was awarded a contract worth RM97mn by Landasan Kapital (M) Sdn Bhd to serve as the sub-contractor for building student hostels at Universiti Malaysia Kelantan in Bachok, Kelantan.
  • PIE Industrial Bhd confirmed that it has secured a new customer and said it is expecting the new customer to contribute an additional RM2.5bn in revenue to the group, of which RM1bn will be recognised as early as next year.
  • EG Industries Bhd has secured a second letter of intent from US-based Cambridge Industries Group to produce a new 1.6 terabit optical signal transmitter and receiver for a 5G wireless network at EG Industries' new smart factory 4.0 in Penang.
  • Iconic Worldwide Bhd's rights issue exercise and free warrants undertaken by the group have been oversubscribed.
  • Nova MSC Bhd said it has signed term sheets for investments totalling about RM41.4mn into two of its subsidiaries by Singapore-based family office Jostar Investment VCC.
  • Fitters Diversified Bhd's wholly-owned subsidiary Fitters Engineering Services Sdn Bhd has secured a RM26.1mn subcontract from IJM Construction Sdn Bhd.
  • YX Precious Metals Bhd, a 70%-owned subsidiary of Tomei Consolidated Bhd, has proposed to transfer its listing from the ACE Market to the Main Market as it has met the profit requirements for the transfer.
  • MKH Oil Palm (East Kalimantan) Bhd's initial public offering has been oversubscribed by 8.4 times ahead of its listing on the Main Market of Bursa Malaysia Securities Bhd.
  • The IMF's fiscal monitor estimates that the US deficit for 2024 will reach 6.67% of GDP, rising to 7.06% in 2025 - double the 3.5% in 2015.

Source: TA Research - 22 Apr 2024

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