TA Sector Research

Daily Market Commentary - 6 Jun 2024

Publish date: Thu, 06 Jun 2024, 10:29 AM

Review & Outlook

Blue chips closed lower Wednesday after the previous day's strong rebound encouraged profit-taking in energy, plantation and consumer heavyweights, as investors assess key labour market data for cues on the interest rate path ahead for the US. The FBM KLCI shed 6.87 points to end at the day's low of 1,608.53, off an early high of 1,622.65, as losers edged gainers 599 to 547 on lower turnover of 4.28bn shares worth RM3.4bn.

The local market should trade sideways as investors await the ECB decision on interest rates and more US jobs data for signs on the probable direction for US interest rates. Immediate index resistance stays at 1,640, with 1,660 and then 1,680 as tougher upside hurdles ahead. Immediate uptrend supports will be 1,597, then 1,583 and 1,553, the respective 30-day, 50- day and 100-day moving averages.

Supermax should rebuild support at current levels pending rebound, with a breakout above the mid Bollinger band (92sen) to aim for the upper band (RM1.03) and RM1.10 ahead, while the 200-day ma (87sen) and 85sen cushion downside. Top Glove will need breakout momentum above the mid Bollinger band (RM1.07) to sustain upside and target RM1.18, RM1.25 and RM1.31, with the 30-day ma (RM1.00), 50-day ma (93sen) and 100-day ma (90sen) acting as stronger chart supports.

News Bites

  • Suria Capital Holdings Bhd will be jointly developing the Jesselton Docklands 1 project with Jesselton Docklands 1 Sdn Bhd and Suria Capital will be entitled to at least RM180mn, representing 18% of the estimated net development value of RM1.0bn.
  • XOX Bhd said it plans to consolidate every 30 of its shares into one share a month after its proposed share capital reduction to set off its accumulated losses.
  • Nestcon Bhd announced that its 51%-owned unit Nestcon Sustainable Solutions Sdn Bhd, has secured a RM3.6mn contract to develop and install a solar photovoltaic system.
  • Sapura Resources Bhd's wholly-owned subsidiary Sapura Aero Sdn Bhd has inked an agreement with Nilai University to explore opportunities in academic and industry cooperation.
  • Animation company Kucingko Bhd has signed an underwriting agreement with Kenanga Investment Bank Bhd for its upcoming initial public offering on the ACE Market of Bursa Malaysia.
  • Practice Note 17 flagged Pharmaniaga Bhd has introduced a strategic plan, dubbed Vision 525, which is aimed at achieving the company's goals through actionable and measurable objectives.
  • Wasco Bhd is confident about the outlook for its pipe coating, engineering and fabrication and biomass energy segments, underpinned by its strong order book of RM3.2bn, tender book of RM7.3bn and a potential market size of RM13bn.
  • Swiss investment bank UBS Group AG has ceased to be a substantial shareholder of YTL Corp Bhd after a series of share disposals since February, which eventually led to its shareholding in the company falling below the 5% threshold.
  • The Australia & New Zealand Banking Group Ltd has disposed of its remaining 5.17% stake in AMMB Holdings Bhd for RM701.2mn, confirming a report by The Edge last week that the Australian group was planning to exit Malaysia's sixth-largest lender by assets.
  • Sarawak Cable Bhd said it is being sued by Serendib Capital Ltd over the termination of a memorandum of agreement between the two parties to undertake a "resuscitation exercise" to revive the loss-making manufacturer.
  • Avaland Bhd has topped out the Sanderling condominium, which has a 90% take-up rate.
  • Leong Hup International Bhd's group chief executive officer Tan Sri Lau Tuang Nguang has bought a total of 8.9mn shares in the poultry, egg and livestock feed producer over the past week, for about RM5.0mn.
  • The Caixin China services purchasing managers index rose to 54 in May, highest in 10 months and beat the median forecast of 52.5.
  • Private payrolls in the US increased 152,000 last month, the slowest pace since the start of the year, restrained by a steep decline in factory payrolls and adding to evidence of a cooling in the labour market.
  • Business activity in the US service sector expanded in May, with the ISM Services PMI recovering to 53.8 from 49.4 in April.

Source: TA Research - 6 Jun 2024

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