Review & Outlook

Blue chips extend rise on Tuesday, led by utility, property, energy and consumer heavyweights, mirroring regional strength as optimism on US interest rate cuts by year-end sparked foreign buying. The FBM KLCI added 8.29 points to settle at 1,605.68, off an early low of 1,600.66 and high of 1,610.32, as gainers led losers 684 to 455 on strong turnover of 5.42bn shares worth RM3.79bn.

Spreading optimism over rising potential for US rate cuts by year-end should see increased investor commitments and sustain foreign fund buying. Immediate resistance for the index is revised upwards to 1,620, with stronger upside hurdles seen at 1,640 and then 1,660. Key supports will be at 1,562, 1,550 and 1,526, the respective rising 30-day, 50-day and 100-day moving averages.

MRCB need to overcome the upper Bollinger band (70sen) to boost upside momentum towards the 200%FP (74sen) and 223.6%FP (79sen) ahead, with uptrend support from the 50-day ma (63sen), matching the 150%FP, cushioning downside. UEM Sunrise will need convincing breach above the 138.2%FP (RM1.22) to extend rally and aim for the 150%FP (RM1.30) and 161.8%FP (RM1.38) going forward, while uptrend support if from the 100-day ma (RM1.00).

News Bites

• Malaysia foresees significant potential for deepened collaboration with China, notably in infrastructure, the digital economy, green development, new energy vehicles, and the rare earth industry, said Deputy PrimeMinister Datuk Seri Fadillah Yusof.
   
• Sime Darby Plantation Bhd is making a foray into green industrial park, starting with the proposed development of the Kerian Integrated Green Industrial Park in Perak.
   
• Sapura Energy Bhd's joint venture companies have bagged contracts from Petroleo Brasileiro Sa worth USD1.8bn (RM8.5bn) to provide engineering services via six pipe-laying support vessels.
   
• Power Root Bhd's subsidiaries have successfully recovered trademark of its own "Ah Huat" brand for coffee and tea beverages, after reaching an amicable out-of-court settlement with its Indonesian distributor CV Ego Sun Star Sukses Mandiri.
   
• OCK Group Bhd has entered into a 15-year tower leasing agreement with Best Telecom Co Ltd, marking its entry into Laos, where Best Telecom plans to launch their 5G network by the end of the year.
   
• Pekat Group Bhd has signed a non-binding agreement to acquire a stake in switchgears supplier EPE Switchgear (M) Sdn Bhd.
   
• The takeover bid by Yinson Holdings Bhd's major shareholder for Icon Offshore Bhd has turned unconditional after it received more than 50% of voting shares.
   
• Mobilia Holdings Bhd is planning to issue up to 218.8mn free warrants (Warrants-B), on the basis of one Warrant-B for every four existing shares held, and the indicative exercise price is 15 sen apiece.
   
• Siab Holdings Bhd has signed an underwriting agreement with M&A Securities and NewParadigm Securities Sdn Bhd for the group's rights issue with warrant exercise, aiming to raise RM92.0mn.
   
• Ireka Corp Bhd's subsidiary, Ireka Development (Terengganu) Sdn Bhd, and its directors are facing legal action from the Employee Provident Fund over unpaid contributions amounting to RM50,196.
   
• Urusharta Jamaah Sdn Bhd, a special purpose vehicle established under the Ministry of Finance to rehabilitate, restructure and monetise underperforming assets transferred to it from Lembaga Tabung Haji, has emerged as a substantial shareholder in Prolintas Infra Business Trust.
   
• CTOS Digital Bhd posted a 25.6% YoY jump in its 1QFY24 net profit to RM20.8mn, as it recorded higher revenue and lower tax expense following the approval of a tax incentive for its main subsidiary CTOS Data Systems Sdn Bhd.
   
• AwanBiru Technology Bhd reported a net profit of RM2.1mn for 3QFY24, a significant turnaround from the net loss of RM2.0mn a year ago, as its software and services segment secured major contracts with higher revenue.
   
• China tightened rules for hedge funds, raising the minimum-asset threshold of the CNY5.5tn (RM3.61 bn) industry while imposing restrictions on the use of derivatives and leverage.
   
• Japan may have to take action against any disorderly, speculative-driven foreign exchange moves, the government's top currency diplomat Masato Kanda said.

Source: TA Research - 8 May 2024