TA Sector Research

Daily Market Commentary - 30 May 2024

Publish date: Thu, 30 May 2024, 11:03 AM

Review & Outlook

Sustained profit-taking on healthcare, plantation and property counters dragged the blue-chip index lower on Wednesday, mirroring regional weakness as Australia's higher-then-expected consumer prices reignite inflation fears. The FBM KLCI shed 10.47 points to end at the day's low of 1,605.35, off an opening high of 1,614.71, as losers swarmed gainers 835 to 401 on moderating trade totalling 4.74bn shares worth RM3.69bn.

Stocks should extend profit-taking correction amid worries stubbornly high inflation across the region could delay any notion for interest rate cuts this year. 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 1,595, 1,579 and 1,548, the respective rising 30-day, 50-day and 100-day moving averages, acting as stronger supports.

Velesto will need a decisive breakout above the 31.5sen high (28/2/24) to fuel further upside momentum and aim for the 123.6%FP (37sen) and 138.2%FP (40sen) ahead, while the 200-day ma (25sen), matching the 76.4%FR, cushions downside risk. Wasco needs sustained strength above the 138.2%FP (RM1.61) to extend uptrend and target the 150%FP (RM1.70) and 161.8%FP (RM1.79) going forward, with uptrend support from the rising 50-day ma (RM1.38) and 100-day ma (RM1.27) cushioning downside.

News Bites

  • Lagenda Properties Bhd said one of its senior personnel was remanded by the Malaysian Anti-Corruption Commission under an investigation into the subdivision of Malay reserve land in Manjung, Perak.
  • SkyWorld Development Bhd has embarked on a partnership with Alliance Bank Malaysia Bhd to provide additional financing of up to RM150,000 to homebuyers via the Alliance Bank's Home Complete product.
  • Fajarbaru Builder Group Bhd has bagged an additional contract worth RM15.7mn from the Australian Department of Defence.
  • Mitrajaya Holdings Bhd has bagged a works contract worth RM86.6mn from Lendlease Projects (M) Sdn Bhd for the foundation works of the NEXTDC KL1data centre project in Petaling Jaya.
  • Vizione Holdings Bhd has bagged a RM250.0mn contract to construct apartments in Semenyih, Selangor, in a related-party transaction.
  • Epicon Bhd, formerly known as Konsortium Transnasional Bhd, said it has been notified by its major shareholder that one of its members is currently assisting a Malaysia Anti-Corruption Commission probe in his own personal capacity.
  • Sentoria Group Bhd has suspended its group chief executive officer Datuk Loh Yuen Tuck from his duties with immediate effect, due to alleged misconduct.
  • Oversea-Chinese Banking Corporation spend some HK$1.5bn (S$260.0mn) to upgrade its technology and facilities across Greater China by 2026, as part of an "accelerated" push to improve customer and staff experience with updated platforms, products and facilities.
  • TIME dotCom Bhd's net profit slipped 3.4% YoY to RM110.7mn in 1QFY24, driven by higher personnel costs, depreciation for property, plant and equipment as well as lower net foreign exchange gain.
  • Hap Seng Consolidated Bhd net profit rose more than 2-fold YoY to RM137.3mn in the 1QFY24, thanks to lower fertiliser costs boosting its plantation earnings, coupled with gains from land sales.
  • Genting Plantations Bhd 1QFY24 net profit climbed 10.4% YoY to RM42.8mn on higher palm product prices, which offset the impact of lower sales volume in the downstream manufacturing segment.
  • IJM Corporation Bhd net profit for the 4QFY24 leapt over 10-fold to RM305.5mn, thanks to a sharp rise in other operating income.
  • Capital A Bhd posted a net loss of RM91.6mn in contrast to a net profit of RM57.1mn in the same period last year,
  • Farm Fresh Bhd 4QFY24 net profit rose more than 3-fold to RM23.9mn due to higher Horeca and ultra-high treatment product sales, positive impact of the launching of new products, and revenue contributions from newly acquired companies.
  • The International Monetary Fund now expects China's economy to grow 5% this year, raising its forecast from 4.6% a few weeks ago to reflect a strong expansion at the start of 2024 and additional support from the government.
  • The Bank of Japan may raise interest rates if sharp falls in the yen boost inflation or the public's perception of future prices move more than expected, board member Seiji Adachi said.
  • The US economy expanded at a "slight or modest" pace across most regions since early April and consumers pushed back against higher prices, the Federal Reserve said in its Beige Book survey of regional business contacts.

Source: TA Research - 30 May 2024

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