TA Sector Research

Daily Market Commentary - 28 May 2024

Publish date: Tue, 28 May 2024, 11:29 AM

Review & Outlook

Bursa Malaysia shares eased for profit-taking consolidation on Monday, as overbought momentum and the cloudy US interest rate outlook encouraged investors to lighten trading commitments. The FBM KLCI eased 1.13 points to close at 1,618.27, off an early high of 1,622.4 and low of 1,617.98, as losers beat gainers 682 to 529 on total turnover of 5.64bn shares worth RM3.92bn.

Stocks should trade sideways with downward bias in the near-term, given uncertainty over the path ahead for U.S. interest rates as policymakers struggle with sticky inflation and robust economic growth numbers. Immediate index resistance stays at 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend support remains at 1,600, with 1,592, 1,576 and 1,546, the respective rising 30-day, 50-day and 100-day moving averages, acting as stronger supports.

Dialog will need sustained buying momentum for a successful challenge of the 25/1/23 peak (RM2.73), with a confirmed breakout to target the 123.6%FP (RM2.97) and 138.2%FP (RM3.12) going forward, while uptrend support will be from the rising 50-day ma (RM2.37). DNEX need breakout confirmation above 50sen to aim for the 38.2%FR (55sen) and 50%FR (62sen) ahead, with key chart support from the 200-day ma (40sen) limiting downside risk.

News Bites

  • The Finance Ministry has announced the commencement of the Budi Madani diesel subsidy programme, which grants RM200 monthly to eligible individuals, small-scale farmers and commodity growers starting today.
  • Tenaga Nasional Bhd projects a higher investment allocation to implement the incentive-based regulation mechanism for the fourth regulatory period compared to RM21bn for IBR RP3.
  • YTL Power International Bhd and smaller rival Ranhill Utilities Bhd have both requested for their shares to be suspended from 9am on Tuesday, pending an announcement.
  • UEM Sunrise Bhd has submitted the development application of its first residential development in Subiaco East in Perth, Western Australia for Lots 1 and 2 at The Oval, Subiaco East, to deliver two landmark apartment buildings.
  • Kerjaya Prospek Group Bhd's wholly-owned subsidiary Future Rock Sdn Bhd has secured a RM567.7mn contract for reclamation and dredging works for the Seri Tanjung Pinang (Phase 2B and 2C) development at Tanjung Tokong, Penang.
  • CCK Consolidated Holdings Bhd has signed an agreement with Astrantia Sdn Bhd, a special purpose vehicle company of Creador Sdn Bhd, where in Astrantia will make a RM170.3mn investment to acquire a 40% stake in CCK's subsidiary, PT Adilmart.
  • KIP Real Estate Investment Trust, which mainly manages retail properties, said on Monday it plans to acquire seven-floor DPulze Shopping Centre for RM320mn.
  • MGB Bhd has secured a contract worth RM189.4mn to undertake a multi-phase property development project in the Kuala Selangor district.
  • Kimlun Corp Bhd's wholly-owned subsidiary, Kimlun Sdn Bhd, has accepted an award of a construction contract from Melia Spring Sdn Bhd for main building works for a serviced apartment in Johor Baru, Johor, worth RM143mn.
  • Meta Bright Group Bhd has signed a memorandum of understanding with ChemPartner Pharmatech Co Ltd to develop a pharmaceutical and biotechnology hub in Malaysia.
  • Powerwell Holdings Bhd's wholly owned subsidiary, Powerwell International Sdn Bhd has secured purchase orders RM57.6mn from a renowned multinational technology corporation.
  • Inta Bina Group Bhd has accepted a letter of award from Sime Darby Property (Ara Damansara) Sdn Bhd for main building works for apartment units at Ara Damansara, Selangor for RM198.7mn.
  • Pesona Metro Holdings Bhd has secured mechanical and electrical works from Gaya Kuasa Sdn Bhd for a residential highrise project in Bukit Jalil, Kuala Lumpur worth RM410.5mn.
  • AMMB Holdings Bhd says pressure on its net interest margin appears to be easing and the group is expecting NIM to expand in the April to June period this year.
  • Amidst the ongoing merger and acquisition where AirAsia X Bhd is acquiring Capital A Bhd's aviation business, AAX has committed to fully activating its fleet by the second half of this year.
  • Profits at China's industrial firms rose 4.3% over January to April from a year earlier, unchanged from a 4.3% increase in the first quarter.
  • Shanghai will lower the minimum downpayment ratio for first home purchases to 20%, and cut the ratio for second home purchases to 30% for suburban areas and to 35% for the rest of the city.

Source: TA Research - 28 May 2024

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