TA Sector Research

Daily Market Commentary - 29 May 2024

Publish date: Wed, 29 May 2024, 11:18 AM

Review & Outlook

Blue chips ended lower Tuesday on profit-taking due to overbought momentum and caution over the path ahead for US interest rates given the stubbornly high inflation and growth numbers. The FBM KLCI fell 2.45 points to settle at 1,615.82, off an early high of 1,622.93 and low of 1,612.96, as losers beat gainers 824 to 352 on lower turnover of 4.86bn shares worth RM3.79bn.

The local market should extend sideways trade with downward bias as investors assess inflation data from across the region and Europe for cues on the likely interest rate direction towards the year-end. 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 1,594, 1,577 and 1,547, the respective rising 30-day, 50-day and 100-day moving averages, acting as stronger supports.

Sime Darby need to overcome the 138.2%FP (RM3.00) decisively to extend uptrend and aim for the 150%FP (RM3.09) and 161.8%FP (RM3.18) ahead, while uptrend support from the rising 50-day ma (RM2.76) cushion downside. Tenaga will need to sustain breakout above the 161.8%FP (RM13.53) to enhance upside momentum and target the 176.4%FP (RM13.95) and 200%FP (RM14.61) going forward, with uptrend support from the rising 30-day ma (RM12.26) and 50-day ma (RM11.96) capping downside risk.

News Bites

  • Malaysia's producer price index increased by 1.9% YoY in April 2024, higher than March's 1.6% YoY.
  • The government is allocating at least RM25bn for targeted incentives to support the newly launched National Semiconductor Strategy, Prime Minister Datuk Seri Anwar Ibrahim said yesterday.
  • Malaysia Airports Holdings Bhd has granted Segi Astana Sdn Bhd, which is 30% owned by MAHB and 70% held by WCT Holdings Bhd, a further 22-year concession extension till 2069 to operate gateway @ klia2. Segi Astana.
  • YTL Power International Bhd's 70% subsidiary SIPP Power Sdn Bhd is buying 405.2mn shares, or a 31.4% stake, in Ranhill Utilities Bhd for RM405.2mn or 99.5sen/share from its major shareholder Tan Sri Hamdan Mohamad and his vehicles.
  • MPHB Capital Bhd's controlling shareholder and chairman Tan Sri Surin Upatkoon plans to take the credit services provider private through a selective capital reduction totalling RM748.1mn.
  • IHH Healthcare Bhd is still in the midst of looking for potential mergers and acquisitions in Indonesia and Vietnam.
  • Kerjaya Prospek Property Bhd plans to launch two new residential projects in the Klang Valley with a combined gross development value of RM395.0mn this year.
  • Eastern & Oriental Bhd plans to launch 3 new projects in the state with an estimated gross development value of RM1.6bn in 2024 and 2025.
  • Aurelius Technologies Bhd has proposed to undertake a private placement of up to 39.4mn shares, or 10% of its issued share capital, mainly to build a new manufacturing plant in Kulim Hi-Tech Park in Kedah.
  • Kenanga Investment Bank Bhd and CGS International have agreed to underwrite Well Chip Group Bhd's initial public offering on the Main Market of Bursa Malaysia.
  • Ageson Bhd has accepted a letter of award from R&C Cergas Teguh Sdn Bhd to carry out the sub-contract works for a 40-storey service suite at Jalan Terowong Sepanggar, Sabah, worth RM54.3mn.
  • UUE Holdings Bhd began taking orders from investors for its ACE Market initial public offering that would raise up to RM39.0mn. Applications for the IPO shares will close on 18 June 2024 and listing has been scheduled for 2 July 2024.
  • UEM Sunrise Bhd 1QFY24 net profit halved 46.7% YoY to RM8.2mn as sales fell while operating expenses rose.
  • IGB Bhd net profit surged 2-fold YoY to RM185.3mn for the 1QFY24, thanks to land disposal gains.
  • Kenanga Investment Bank Bhd net profit more than doubled to RM22.8mn in 1QFY24, driven by higher trading and investment income, management fee income and higher share of profit from its associate company.
  • Star Media Group Bhd 1QFY24 registered a net loss of RM193.0k versus a net profit of RM1.1mn a year earlier, dragged by higher operating costs.
  • The US Conference Board said that its consumer confidence index increased to 102.0 this month from an upwardly revised 97.5 in April.
  • Australia and the European Union have struck an agreement to boost cooperation and investment in critical minerals.

Source: TA Research - 29 May 2024

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