Review & Outlook

While blue chips stayed in profit-taking consolidation on Monday, active rotational plays on lower liner transport, utility, construction and property stocks highlight trading. The FBM KLCI slipped 3.49 points to close at 1,614.37, off an opening high of 1,619.24 and low of 1,613.01, as gainers led losers 628 to 531 on total turnover of 5.96bn shares worth RM3.3bn.

Blue chips should trade sideways as investors await the keenly watched US FOMC meeting mid-week, while rotational plays on lower liner construction and property stocks highlight. Immediate index resistance will be from the recent high of 1,632, with 1,640, 1,660 and then 1,680 as tougher upside hurdles. Immediate supports are at 1,600, the rising 30-day moving average, with 1,586 and 1,556, the respective 50-day and 100-day moving averages, acting as stronger supports.

Ekovest need to sustain above the 200-day ma (49sen) to enhance upside momentum towards the 61.8%FR (52sen) and 76.4%FR (56sen) ahead, while the 23.6%FR (41sen) provides key retracement support to cushion downside. IWCity will need convincing breakout above the 61.8%FR (82sen) to reenergize upside momentum and aim for the 76.4%FR (90sen) and 8/1/24 peak (RM1.03), with downside risk cushioned by the 200-day ma (72sen) and 38.2%FR (69sen).

News Bites

• Malaysia's unemployment rate remained steady at 3.3% in April as the number of individuals without jobs fell while the workforce expanded.

• Malaysia's industrial output rose at a slightly slower than expected pace of 6.1% YoY in April, led by manufacturing activities and electricity generation.

• Malaysia's palm oil stocks rose 0.5% MoM to 1.75mn metric tonnes in May, the highest since February, the Malaysian Palm Oil Board said.

• Scientex Bhd's wholly owned subsidiary, Scientex Quatari Sdn Bhd, has entered into a conditional sale and purchase agreement with Lee Pineapple Company (Pte) Ltd to acquire 14 parcels of freehold land, measuring 141.7 hectares, in Johor for RM381.4mn.

• Eco World Development Group Bhd said it plans to sell a 123.1-acre industrial land in Iskandar Malaysia, Johor, to a company providing data centre services for RM402.3mn or RM75 per sq ft.

• Genting Malaysia Bhd's wholly-owned subsidiary GENM Capital has issued medium-term notes with a nominal value of RM400mn.

• Cypark Resources Bhd said that it achieved the commercial operation date of its 100MW Large Scale Solar 3 hybrid solar plant project in Merchang, Terengganu on June 9.

• PUC Bhd said it plans to acquire digital money lender Alevate Capital Sdn Bhd and digital transformation solution provider Alevate Solutions Sdn Bhd for a total of RM200mn.

• Tropicana Corp Bhd has redeemed the third tranche of its sukuk wakalah programme worth RM110mn, which was due on June 7.

• Deleum Bhd has bagged a letter of award worth RM105mn from Petronas Carigali Sdn Bhd to provide offshore maintenance, construction and modification services, covering Peninsular Malaysia assets (gas package) for the year 2024.

• PN17 outfit Ageson Bhd has secured a RM75.7mn contract from Mateen Group Sdn Bhd to undertake a construction project in the Sepang district of Selangor.

• The federal government has agreed in principle to grant a 20-year concession for the operation and maintenance management of Kuala Lumpur Tower to construction company Lim Seong Hai Capital Bhd and its JV partner.

• Yong Tai Bhd announced that it had signed a collaboration agreement with Sichuan Tourism Investment Group, a state-owned enterprise from Sichuan province, China, to revitalise the operations of the Encore Melaka theatre.

• KPJ Healthcare Bhd has secured an RM18.3mn contract for hospital renovation work, in a related party transaction.

• Managepay Systems Bhd has secured a five-year contract to develop a SuperApp for the national railway company Keretapi Tanah Melayu Bhd.

• This week the European Commission is expected to disclose the tariffs it plans to impose on Chinese electric vehicles due to what it says are excessive subsidies.

Source: TA Research - 11 Jun 2024