Review & Outlook

The blue-chip benchmark index staged a strong rebound on Tuesday, led by technology, telco, plantation and banking heavyweights, as investors returned to bargain hunt after the recent profit-taking spell. The FBM KLCI rose 18.72 points, or 1.2 percent, to close at 1,615.40, off an opening low of 1,595.35 and a high of 1,617.41, as gainers led losers 666 to 545 on a total turnover of 4.46bn shares worth RM3.94bn.

Stocks should stay range-bound pending clearer market leads as investors await the closely watched ECB decision on interest rates and more US data to gauge the health of the world's largest economy. Immediate index resistance stays at 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend support will be 1,595, matching yesterday's low, then 1,582 and 1,552, the 50-day and 100-day moving averages, acting as stronger supports.

Hartalega looks set to rebuild support at current levels pending recovery towards the 123.6%FP (RM3.44), with a confirmed breakout to aim for the 138.2%FP (RM3.68) and 150%FP (RM3.87) ahead, while the 30-day ma (RM3.08) and 50-day ma (RM2.93) cushions downside. Kossan needs to overcome the 123.6%FP (RM2.44) to enhance upside momentum towards the 138.2%FP (RM2.59) and 150%FP (RM2.71) going forward, with the 50-day ma (RM2.19) and 100-day ma (RM2.08) capping downside risk.

News Bites

• The seasonally adjusted S&P Global Malaysia manufacturing purchasing managers' index rose to 50.2 in May 2024 from 49.0 in April 2024, signaling a renewed improvement in manufacturing sector.

• Malaysia Marine and Heavy Engineering Holdings Bhd has secured a subcontract worth RM1.5bn to build an offshore substation at a wind farm in the Netherlands. Fabrication.

• AEON Co (M) Bhd is buying 2 pieces of land in Seremban, Negeri Sembilan for RM102.9mn to build a shopping mall.

• Inta Bina Group Bhd has secured a RM112.0mn contract from a unit of Gamuda Bhd to build semi-detached houses.

• Kimlun Corp Bhd has secured a contract worth RM234.3mn from Saujana Development Sdn Bhd to construct a high-rise residential development in Seksyen U2, Shah Alam.

• Datasonic Group Bhd has received five letters of extension from the Home Ministry totalling RM181.76mn to supply MyKad, MyTentera and MyPOCA raw cards and consumables to the National Registration Department.

• SNS Network Technology Bhd has been appointed by VSTECS Bhd as an authorised retailer for Starlink's equipment in Malaysia.

• Despite ongoing litigation with MBSB Bank Bhd over payment defaults, Country Heights Holdings Bhd announced a tender process to attract investors for the Mines Waterfront Business Park and Mines International Exhibition and Convention Centre project development in Seri Kembangan.

• Eye specialist service provider Optimax Holdings Bhd announced that it has obtained a license from the Ministry of Health to offer aesthetic services at its new outlet, Neumax Clinix.

• ManagePay Systems Bhd, via its wholly-owned unit ManagePay Services Sdn Bhd,has bagged an incentive contract worth USD3.7mn from Mastercard Asia/Pacific Pte Ltd for a sign-on bonus, product launch, data and services and marketing support.

• CIMB Group Holdings Bhd has appointed Novan Amirudin as its new group chief executive officer, effective July 1, 2024.

• Serba Dinamik Holdings Bhd's delisting from Bursa Malaysia will proceed on Wednesday (5 June 2024) after the exchange regulator dismissed a final appeal from the beleaguered oil and gas outfit.

• US job openings were down 296,000 to 8.059mn on the last day of April, the lowest in more than three years, a sign that labour market conditions are softening in a manner that could help the Federal Reserve's fight against inflation.

• The Commerce Department said US factory orders climbed by 0.7% in April compared to economist estimates for an increase of 0.6%.

• Germany's unemployment increased more than expected in May as the economic recovery was not sufficient to bring a marked improvement in the labor market.

• UK retail sales posted a moderate growth of 0.7% in May despite a strong bank holiday weekend, data released by the British Retail Consortium revealed Tuesday.

Source: TA Research - 5 Jun 2024