TA Sector Research

Daily Market Commentary - 20 Jun 2024

Publish date: Thu, 20 Jun 2024, 11:14 AM

Review & Outlook

Blue chips fell on Wednesday with profit-taking on the healthcare, technology, telco and property sectors dragging the benchmark index to end below the 1,600 level. The FBM KLCI lost another 6.34 points to end at the day's low of 1,599.79, off an early high of 1,609.22, as losers swarmed gainers 907 to 341 on lower turnover of 5.57bn shares worth RM4.06bn.

Stocks should continue trading sideways to lower, pending positive local catalysts to lift the market from the current profit-taking drift-down. Immediate index supports are revised lower to 1,591 and 1,562, the respective 50-day and 100-day moving averages, while immediate resistance remains the recent high of 1,632, with 1,640, 1,660 and then 1,680 as tougher upside hurdles.

Further weakness on Axiata should attract bargain hunters looking for rebound upside towards the 61.8%FR (RM2.85), with the 76.4%FR (RM3.02) and 30/11/22 high (RM3.28) as tougher upside hurdles, while the 200-day ma (RM2.59) cushions downside. CelcomDigi looks attractive to bargain at current levels for rebound upside towards the 50%FR (RM3.89), with next resistance at the 61.8%FR (RM4.06) and 76.4%FR (RM4.26), and key retracement support seen at the 23.6%FR (RM3.52).

News Bites

  • Malaysia and China have agreed to increase high-quality investment in the digital and green economies between the two countries.
  • Kuala Lumpur Kepong Bhd announced that its subsidiary, KL-Kepong Rubber Products Sdn Bhd, is no longer in any contractual relationship with Agency Pekerjaan UKHWAH Sdn Bhd with immediate effect.
  • Iskandar Investment Bhd, via River Retreat Sdn Bhd, has entered into a strategic partnership with TM-Nxera that will entail an approximate RM9.0bn investment by the parties to develop the digital infrastructure for the area.
  • LBS Bina Group Bhd has exited its investment in Chinese motor circuit company Zhuhai International Circuit Ltd after more than a decade, as it sold all its stake in Lamdeal Investments Ltd, which owns a 60.0% stake in ZICL, for RM124.7mn cash.
  • Binastra Corporation Bhd has bagged a contract for building works in Kota Kinabalu, Sabah worth at RM313.7mn.
  • OCK Group Bhd said that its deputy chairman Abdul Halim Abdul Hamid and executive director Chang Tan Chin have resigned, with immediate effect, as part of the board's internal restructuring efforts.
  • Matrix Concepts Holdings Bhd via its subsidiary Megah Sedaya Sdn Bhd has inked a land development agreement with NS Corporation for 1,000 acres of prime land in the Malaysia Vision Valley 2.0 development corridor.
  • L&P Global Bhd said it is eyeing acquisitions to support organic growth as the industrial packaging firm seeks to nearly double its revenue within the next three to five years.
  • Perak Corporation Bhd has dismissed allegations that it is losing significant land parcels due to unpaid rent.
  • Dagang Nexchange Bhd says the group has broadened its operations, onboarding new clients in emerging sectors such as artificial intelligence, health science and electric vehicles.
  • Top Glove Corporation Bhd reported a net profit of RM50.7mn for 3QFY24 compared to a net loss of RM130.6mn a year ago, thanks to land sale and currency gain.
  • Yinson Holdings Bhd's net profit for 1QFY25 dipped by 2.3% YoY to RM203.0mn from RM208.0mn a year earlier, due to lower revenue coupled with increased finance costs of RM171.0mn arising from higher drawdowns to support project execution.
  • VS Industry Bhd's net profit jumped 103.3% YoY to RM54.4mn in 3QFY24, from RM26.8mn a year ago, mainly due to higher orders as well as a favourable product sales mix in Malaysia.
  • Scientex Packaging (Ayer Keroh) Bhd's net profit slipped by 1.2% YoY to RM10.0mn in 3QFY24, from RM10.1mn a year earlier, primarily due to increased tax expenses.
  • Eco World International Bhd had widened its net loss to RM14.1mn for 2QFY24 compared to RM4.6mn a year ago as quarterly revenue dropped 99.3% YoY to RM0.2mn from RM22.7mn.
  • Chinese automakers have urged Beijing to retaliate against Brussels' decision to place curbs on Chinese electric vehicle exports by raising tariffs on imported European gasoline-powered cars.
  • The US homebuilder confidence in the month of June continued to deteriorate as the NAHB/Wells Fargo Housing Market Index fell to 43 in June after slumping to 45 in May

Source: TA Research - 20 Jun 2024

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