Review & Outlook

Briefly after touching a fresh near two-year high on Tuesday, the local bluechip benchmark dipped for profit-taking correction ahead of the Workers' Day holiday, given the short-term overbought technical momentum. The FBM KLCI shed 6.69 points to end at the day's low of 1,575.97, off an early high of 1,589.06, but gainers edged losers 524 to 521 on steady turnover of 4.18bn shares worth RM3.75bn.

The local market should extend profit-taking breather today, with market players expected to stay sidelined to assess the outcome of the US FOMC meeting regarding the path for interest rates ahead. Immediate resistance for the index is retained at 1,600, with stronger upside hurdles seen at 1,620 and then 1,640. Key supports will be at 1,553, 1,543 and 1,521, the respective rising 30-day, 50-day and 100-day moving averages.

Aemulus remains in base building mode, pending breakout above the upper Bollinger band (38sen) which is key to aim for the 38.2%FR (41sen) and 50%FR (47sen) ahead, while the 200-day ma (32sen) cushions downside risk. Unisem will need breakout confirmation above the 1/4/24 high (RM3.92) to fuel upside momentum towards the 123.6%FP (RM4.30) and 138.2%FP (RM4.54) going forward, while the 200-day ma (RM3.32) cushions downside.

News Bites

• Prime Minister Datuk Seri Anwar Ibrahim on Wednesday announced that civil servants will enjoy a salary hike of more than 13% starting December this year, among the highest increase in the nation's history.

• Duopharma Biotech Bhd accepted 11 letters of offers from a subsidiary of Pharmaniaga Bhd to supply 86 pharmaceutical and/or nonpharmaceutical products worth RM578.1mn in total, to government offices and facilities that Pharmaniaga operates.

• KSL Holdings Bhd has proposed to acquire 22 land parcels in Pulai measuring a total of 183.3 acres for RM211.6mn from three units of Tropicana Corp Bhd.

• SEG International Bhd's group managing director and major shareholder Tan Sri Clement Hii has bought over private equity firm Navis Capital Partners Ltd' 20.6% stake in SEGi for RM113.0mn cash or 45 sen per share.

• GUH Holdings Bhd said its construction division has secured an RM69.5mn contract under the Sungai Rasau water supply scheme project from Gamuda Bhd.

• Rimbunan Sawit Bhd is expecting around 40% increase in its fresh fruit bunches production for the financial year ending Dec 31, 2024 (FY24) and is anticipating higher crude palm oil prices due to growing demand.

• Mentiga Corp Bhd's external auditor has flagged that the loss-making group's current liabilities have significantly surpassed its group's current assets, based on its financial statements for FY23.

• Chin Hin Group-linked Chiau Haw Loon and Chiau Haw Yew have emerged as the second largest shareholders of Ge-Shen Corp Bhd after acquiring an 18.3% stake in the company.

• Green Packet Bhd is undertaking a private placement of 598.5mn shares representing 30% of its issued shares for 3.2 sen apiece or RM19.2mn.

• Fraser & Neave Holdings Bhd posted a net profit of RM165.4mn in the second quarter ended March 31, 2024 (2QFY24), 63.48% more than the RM101.2mn it made a year before, driven by higher sales amid the Chinese New Year and Hari Raya festivals, and better margins.

• Stock exchange operator Bursa Malaysia Bhd net profit rose 34% to RM75.0mn for the financial quarter ended March 31, 2024 (1QFY24), from RM56.2mn a year before, thanks to higher trading activity and fees from listings and other services.

• Tasco Bhd saw its net profit for the financial quarter ended March 31, 2024 (4QFY24) fell 18% YoY, attributable to lower profit reported in its air freight forwarding and ocean freight forwarding divisions, as freight rates fell to pre-pandemic levels.

• Atrium Real Estate Investment Trust saw its net rental income increase by 20.2% to RM10.7mn for 1QFY24, from RM9.2mn a year before. The improvement was due to higher revenue.

• China's manufacturing and services activity both expanded at a slower pace in April, official surveys showed on Tuesday, suggesting some loss of momentum for the world's second-biggest economy at the start of the second quarter.

• US private payrolls increased more than expected in April, suggesting that the labour market maintained its momentum early in the second quarter.

• The Institute for Supply Management released a report on Wednesday showing a modest contraction by U.S. manufacturing activity in the month of April.

Source: TA Research - 2 May 2024