TA Sector Research

Daily Market Commentary - 21 Jun 2024

Publish date: Fri, 21 Jun 2024, 10:01 AM

Review & Outlook

Blue chips extended profit-taking correction for a third straight session Thursday, led by construction, property and consumer heavyweights. The FBM KLCI fell 7.1 points to close at 1,592.69, off an opening high of 1,596.27 and low of 1,590.37, as losers trashed gainers 816 to 352 on slower trade totalling 5.04bn shares worth RM3.42bn.

The local market should sustain sideways trading ahead of the weekend, pending fresh domestic catalysts to spark rebound from the current profittaking spell. Immediate index supports are retained at 1,591 and 1,563, 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.

Maybank will be attractive to bargain on further weakness, while a convincing breach above the upper Bollinger band (RM10.04) should aim for the 123.6%FP (RM10.26) and 138.2%FP (RM10.50) ahead, with the 100-day ma (RM9.66) providing uptrend support. Further fall on Public Bank to key retracement support at the 23.6%FR (RM3.95) should attract bargain hunters ahead of rebound upside towards the 50%FR (RM4.15), with next hurdles at the 61.8%FR (RM4.24) and 76.4%FR (RM4.35).

News Bites

  • Malaysia's exports grew 7.3% in May from a year earlier, sharply above forecast, thanks to a surge in shipments of electronics and palm oil amid higher deliveries to the US.
  • China had agreed to extend its visa exemption facility for Malaysian citizens until the end of 2025 while Malaysia will extend the visa exemption for Chinese citizens until the end of 2026.
  • Malaysian and Chinese firms signed agreements on Thursday for potential investments worth RM13.2bn to collaborate in sectors ranging from oil and gas to education.
  • Genting Bhd awarded a USD1.0bn contract to Wison New Energies Co Ltd for the construction of a floating liquefied natural gas facility that will be deployed at Teluk Bintuni, West Papua in Indonesia.
  • Press Metal Aluminium Holdings Bhd is planning to sell its entire 25.0% stake in aluminium oxide producer PT Bintan Alumina Indonesia in exchange for a 25.6% stake in Hong Kong firm Nanshan Aluminium International Holdings Ltd in a deal worth USD329.8mn.
  • IHH Healthcare Bhd and Sunway Medical Centre are among bidders for Malaysia's Island Hospital, which is owned by Asian buyout fund Affinity Equity Partners and could fetch USD1.0bn, according to people familiar with the matter.
  • Maxis Bhd and CelcomDigi Bhd have fulfilled the conditions precedent for their subscription of a 14.0% stake each in state-owned 5G network Digital Nasional Bhd.
  • WCT Holdings Bhd has secured a contract worth RM249.7mn to undertake works for additional lanes for the North-South Expressway expansion project.
  • Hengyuan Refining Company Bhd has shut down its long residue catalytic cracking unit for inspection and repair following a leakage found at the carbon monoxide boiler.
  • FSBM Holdings Bhd has regularised its financial condition and no longer triggers any of the criteria under Paragraph 2.1 of PN17 of the Main Market Listing Requirements.
  • Kinergy Advancement Bhd is seeking to raise up to RM66.2mn from a private placement to finance its renewable energy projects and repay its loans.
  • Hextar Healthcare Bhd announced that a fire broke out at its factory in Bercham industrial area in Ipoh on June 18, 2024.
  • TAS Offshore Bhd said it has entered into a deal to buy 14.4 hectares of land in Sarawak for RM12.0mn cash to expand its shipyard business.
  • Nestcon Bhd has accepted a RM21.0mn contract for the design, engineering, procurement, construction, installation, testing and commissioning of the solar photovoltaic plant at Sungai Selangor Phase 1 Water Treatment Plant.
  • Tex Cycle Technology (M) Bhd said that its 30%-owned GLT BP Power Sdn Bhd biogas power plant in Bukit Pasir, Johor, has commenced operations.
  • Dataprep Holdings Bhd said its proposed acquisition of a 70.0% stake in a network connectivity services provider, DACS Network Solutions Sdn Bhd, has fallen through.
  • Eco World Development Group Bhd reported an 11.7% YoY increase in net profit to RM70.0mn for 2QFY24, up from RM62.7mn a year ago, driven by higher revenue and cost savings in completed and nearcompletion development projects.
  • The People's Bank of China kept its one-year and five-year loan prime rate unchanged at 3.45% and 3.95% respectively.
  • The US initial jobless claims decreased by 5,000 to 238,000 in the week ended June 15, after reaching a 10-month high the previous week.

Source: TA Research - 21 Jun 2024

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