TA Sector Research

Daily Market Commentary - 17 May 2024

Publish date: Fri, 17 May 2024, 09:47 AM

Review & Outlook

Blue chips rose on Thursday, led by technology, construction and property stocks, matching regional gains after lower-than-expected US consumer prices raised hopes the Fed will cut rates later this year. The FBM KLCI climbed 7.88 points to close at 1,611.11, off an opening low of 1,604.38 and high of 1,611.57, as gainers led losers 720 to 492 on strong turnover of 6.05bn shares worth RM4.35bn.

The local market should find support from regional strength given the softer US consumer inflation data which increases the likelihood for interest rate cuts, while rubber glove stocks pause for profit-taking breather 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 1,578, 1,564 and 1,536, which are the respective rising 30-day, 50-day and 100-day moving averages.

Gamuda will need sustained strength above the upper Bollinger band (RM5.60) to extend uptrend towards the 123.6%FP (RM5.82) and 138.2%FP (RM6.09) ahead, while the 50-day ma (RM5.24) and 100-day ma (RM5.09) cushion downside. Similarly, Sunway Construction need to climb above the upper Bollinger band (RM3.19) to fuel upside momentum towards the 123.6%FP (RM3.37) and 138.2%FP (RM3.59) going forward, with downside capped by the 50-day ma (RM2.85) and 76.4%FR (RM2.66).

News Bites

  • The Ministry of Human Resources has announced that the progressive wage pilot project, scheduled to commence in June, will encompass five key sectors.
  • IJM Land Bhd, the property arm of IJM Corporation Bhd, has secured eight strategic sites across four London boroughs that provide an estimated gross development value exceeding GBP3.0bn.
  • The Court of Appeal has upheld the High Court's decision two years ago to dismiss the Inland Revenue Board's claim of taxes totalling RM1.8bn against Tenaga Nasional Bhd.
  • AirAsia MOVE, the travel super-app by Capital A Bhd, has inked a MoU with The Commune Mall, which is expected to open its doors in 3Q2024 in Kulai, Johor, to offer exclusive discounts spanning flights, hotels and rides deals to patrons of the mall.
  • Thong Guan Industries Bhd is teaming up with the Kedah State Development Corporation to jointly develop 221 units of shop and office lots with an estimated gross development value of RM200.0mn.
  • Seremban Engineering Bhd has secured a RM39.8mn contract for civil, structural, architectural, and electrical works in Shah Alam, awarded by Kerry Ingredients (M) Sdn Bhd.
  • UEM Sunrise Bhd has inked an agreement to partner Itramas Corporation Sdn Bhd and China Machinery Engineering Corp to develop a 40-acre renewable energy industrial park in Gerbang Nusajaya, Iskandar Puteri, Johor.
  • ACE Market-bound Smart Asia Chemical Bhd's public portion shares under its initial public offering have been oversubscribed by 37.98 times.
  • Pansar Bhd has been awarded a RM30.1mn contract from Jabatan Kerja Raya Sarawak for the management and maintenance of the Borneo Culture Museum.
  • JcbNext Bhd has disposed of a total of 553,658 shares, representing a 1.7% stake, in Taiwan-listed company 104 Corp for TWD123.0mn.
  • Sarawak Cable Bhd said that the High Court has allowed the windingup petition by OCBC Bank (Malaysia) Bhd subsidiaries Leader Cable Industry Bhd and Universal Cable (M) Bhd.
  • Pertama Digital Bhd, which runs the digital court bail payment system e-Jamin, said it is in discussions with the relevant authorities to allow the group to continue operating the system.
  • Iconic Worldwide Bhd is suing Jovian Apparel Sdn Bhd over an alleged outstanding sum of RM5.0mn in unpaid face masks supplied by the company to the fashion retailer.
  • Hong Leong Industries Bhd's net profit in 3QFY24 jumped 51.0% YoY to RM99.4mn from RM65.9mn a year ago, thanks to a RM25.0mn insurance compensation it received for the disruption caused by floods in its motorcycle business.
  • Japan's GDP shrank at an annualised pace of 2% in 1Q24, weaker than economists' forecast of -1.2%.
  • The Biden administration is initiating a suite of policies that it says will help foster a deeper domestic supply chain for solar panels, following pleas from US manufacturers confronting a surge of tariff-free imports.
  • Federal Reserve Bank of New York president John Williams welcomed the arrival of softer consumer inflation data of 0.3% in April but said that positive news is not enough to call for the US central bank to cut interest rates sometime soon.

Source: TA Research - 17 May 2024

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