TA Sector Research

Daily Market Commentary - 16 May 2024

Publish date: Thu, 16 May 2024, 11:05 AM

Review & Outlook

While blue chips extended sideways trade on Wednesday, the healthcare sector surged 9.6% led by rubber glove stocks on demand optimism after the US hiked tariffs on China's healthcare and glove products to 25%. The FBM KLCI dipped 2.65 points to end at the day's low of 1,603.23, off an early high of 1,607.64, as losers edged gainers 579 to 574 on very robust trade totalling 6.2bn shares worth RM4.67bn.

The broader market should stay range bound as investors assess key US consumer inflation data for the likely interest rate trend, while trading momentum focus on rubber glove and healthcare related stocks, which should be choppy after recent sharp gains. Immediate resistance for the index stays at 1,620, with stronger upside hurdles seen at 1,640 and then 1,660. Immediate uptrend supports will be at 1,576, 1,562 and 1,535, which are the respective rising 30-day, 50-day and 100-day moving averages.

Bumi Armada need to overcome the upper Bollinger band (60sen) to boost upside momentum towards the 76.4%FR (63sen), with next key hurdle from the 7/3/23 peak (73sen), while the 200-day ma (54sen) and 50%FR (52sen) cushion downside. Likewise, Hibiscus will need breakout above the upper Bollinger band (RM2.80) to extend recovery towards the 20/10/23 peak (RM2.98), with tougher hurdles from RM3.20 and the 123.6%FP (RM3.44), while downside is seen capped by the 76.4%FR (RM2.51) and 61.8%FR (RM2.23).

News Bites

  • Malaysia Airports Holdings Bhd has received a takeover offer from a four-member consortium led by its major shareholder Khazanah Nasional Bhd, in a deal worth about RM12.3bn.
  • Axiata Group Bhd has signed a non-binding memorandum of understanding with conglomerate Sinar Mas to explore combining their Indonesian units.
  • Paramount Corporation Bhd has received the "Gold" assessment from MARC Ratings Bhd for its Sustainability-Linked Financing Framework.
  • KNM Group Bhd said its external auditor KPMG PLT had expressed a disclaimer of opinion on the group's audited financial statements for the 18-month period ended Dec 31, 2023, due to insufficient audit evidence.
  • MyEG Services Bhd said the Employees Provident Fund had ceased to be a substantial shareholder of the e-government services provider after disposing of 21.0mn shares.
  • Straits Energy Resources Bhd's indirect subsidiary Straits CommNet Solutions Sdn Bhd has signed a memorandum of agreement with Digital One Solutions Ltd to explore a joint venture in the regional cloud computing industry.
  • Mitrajaya Holdings Bhd has accepted a letter of award from Avisena Healthcare Sdn Bhd for the development of a hospital block comprising 11 floors in Shah Alam, Selangor, for RM174.3mn.
  • Ewein Bhd is acquiring the entire equity interest of VS Solution Services Sdn Bhd for RM32.0mn.
  • SNS Network Technology Bhd has obtained approval from the Securities Commission for its transfer to the Main Market of Bursa Malaysia Securities Bhd.
  • Eupe Corporation Bhd is acquiring a parcel of freehold land measuring 2.46 acres in Kuala Lumpur from MCL Land (Pantai View) Sdn Bhd for RM69.2mn.
  • Willowglen MSC Bhd has secured a RM7.9mn contract from Singapore's Housing & Development Board for the design, supply, installation and maintenance for lift monitoring services.
  • XOX Technology Bhd's chief executive officer Azril Aliuddin has stepped down from the group with immediate effect due to other work commitments.
  • Menang Corporation Bhd is exploring a collaboration with Alpro Alliance Sdn Bhd to develop a health and wellness park in Menang Park, Seremban 3, in Negeri Sembilan.
  • LFE Corporation Bhd has accepted two letters of awards from MLG Design and Construction Sdn Bhd to be a sub-contractor relating to completion works of a 22-storey building in Georgetown, Penang, totalling RM16.7mn.
  • China's central bank left a key policy rate unchanged at 2.50% when rolling over maturing medium-term lending facility loans on Wednesday, in line with market expectations.
  • The US core consumer price index cooled to 0.3% MoM in April for the first time in six months, indicating price pressures are abating gradually and supporting the Federal Reserve's intent to cut interest rates later this year.

Source: TA Research - 16 May 2024

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