TA Sector Research

Daily Market Commentary - 21 May 2024

Publish date: Tue, 21 May 2024, 11:06 AM

Review & Outlook

Strong foreign buying interest in key construction, telco, technology and oil & gas heavyweights on Monday lifted the local blue-chip benchmark to settle at another fresh high in more than three years. The FBM KLCI climbed 10.88 points to close at 1,627.50, off an opening low of 1,618.28 and high of 1,629.81, as gainers led losers 840 to 460 on total turnover of 6.98bn shares worth RM4.37bn.

Blue chips should extend uptrend on sustained foreign fund buying amid economic growth optimism following the strong 1QGDP numbers. Immediate index resistance is revised higher to 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend support is at 1,600, with 1,583, 1,568 and 1,540, the respective rising 30-day, 50-day and 100-day moving averages, acting as strong supports.

Axiata need to overcome the 76.4%FR (RM3.02) to enhance uptrend momentum and challenge the 30/11/22 peak (RM3.28), with next hurdle seen at the 123.6%FP (RM3.54), while the 100-day ma (RM2.68) and 200-day ma (RM2.57) limit downside. CelcomDigi will need breakout confirmation above the 76.4%FR (RM4.26) to extend recovery towards the 30/5/23 high (RM4.60), with next key hurdle at the 123.6%FP (RM4.93), while downside should be capped by the lower Bollinger band (RM4.03) and 50%FR (RM3.89).

News Bites

  • Malaysia's exports rebounded by 9.1% YoY in April compared to the median estimate of a 14.1% increase and a contraction of 0.8% YoY in March.
  • Bursa Malaysia Bhd is introducing trading reminders with immediate effect, a new tool highlighting listed companies that exhibit unusual trading activity.
  • Hong Leong Bank Bhd has fully subscribed to a RM350.0mn Asean Green Bond issued by Exio Logistics Sdn Bhd.
  • Malaysia Airports Holdings Bhd's traffic expanded by 7.6% to 11.0mn passengers in April 2024, compared with the preceding month's 10.2mn passengers.
  • Asia Digital Engineering, the engineering arm of Capital A Bhd, announced that its Cambodian unit had been granted the Approved Maintenance Organisation certification in supporting the aviation ecosystem of Cambodia.
  • A court in Sabah has struck out a man's claim for RM24.9mn damages against FGV Holdings Bhd for alleged fraudulent transactions and trespass relating to land in the state held under a native title.
  • Coastal Contracts Bhd has secured a sale contract for an offshore support vessel and an extension for another vessel's charter contract. The extended charter contract is for a period of five years.
  • According to Sunway Construction Group Bhd, the engineering, procurement, commissioning and construction work has yet to begin on Toyo Ventures Holdings Bhd's thermal power plant project in Vietnam.
  • Binastra Corporation Bhd's managing director and largest shareholder Datuk Tan Kak Seng has sold a 6.0% stake or 30mn shares in the construction outfit for RM36.0mn.
  • Annum Bhd's largest shareholder, Datuk Seri Chin Kok Foong, has disposed of his entire 14.8% stake in the Practice Note 17 wood-based products manufacturer.
  • Bright Packaging Industry Bhd's largest shareholder Datuk Ricky Wong Shee Kai, who has been embroiled in a legal battle with the Securities Commission Malaysia, has trimmed his stake in the company to an indirect stake of 23.2% after selling 20.0 shares or 9.7% stake in the company.
  • Sunview Group Bhd has entered into a strategic business alliance agreement with LLC Yashil Energiya to explore business opportunities in renewable and green energy opportunities in Uzbekistan.
  • Public Bank Bhd's net profit in 1QFY24 slipped 3.5% YoY to RM1.65bn from RM1.71bn a year ago, mainly due to higher personnel costs and higher provisions.
  • Sunway Construction Group Bhd's net profit in 1QFY24 rose 16.4% YoY to RM32.4mn from RM27.8mn a year ago, thanks to higher billings in newer projects.
  • Kuala Lumpur Kepong Bhd's net profit in 2QFY24 fell 38.7% YoY to RM117.1mn from RM190.8mn a year ago, due to weak performance in the manufacturing and property segments.
  • TSH Resources Bhd's net profit for 1QFY24 dropped 31.8% YoY to RM20.1mn, from RM29.4mn a year earlier, due to an exceptional land disposal gain recorded in 1QFY23.
  • Beijing hinted it could retaliate against the European Union in a trade dispute that shows signs of escalating the same way as China's contest with the US.

Source: TA Research - 21 May 2024

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