Review & Outlook

Profit-taking checked early gains on Tuesday, as the blue-chip benchmark hit a fresh three-year high which encouraged traders to take some chips off the table. The FBM KLCI slid 3.86 points to close at 1,625.96, off an early high of 1,633.97 and low of 1,624.39, as losers beat gainers 795 to 413 on lower turnover of 4.66bn shares worth RM3.52bn.

Stocks should fall back for profit-taking consolidation near-term, pending resurgent buying momentum which is key to absorb profit-taking and selling as the index approach levels not seen in more than three years. Immediate index resistance will be at yesterday's high of 1,634, with 1,640 and 1,660 as tougher upside hurdles, while immediate supports are at 1,607, 1,599 and 1,575, the respective steadily rising 30-day, 50-day and 100-day moving average levels.

Maxis will be attractive to bargain on weakness towards the key 76.4%FR (RM3.34) support, ahead of recovery upside towards the 50%FR (RM3.70), with tougher hurdles seen at the 61.8%FR (RM3.85) and 76.4%FR (RM4.04). Tenaga remains in strong uptrend mode, with sustained buying momentum to lift stock prices towards the 123.6%FP (RM15.63), 138.2%FP (RM16.46) and 150%FP (RM17.13) going forward, and uptrend supports at the rising 30-day ma (RM13.95) and 50-day ma (RM13.44) cushioning downside.

News Bites

• The Malaysian Automotive Association has revised its total vehicle sales forecast for 2024 to 765,000 units, higher than the previous estimate of 740,000 units.

• The Asean+3 Macroeconomic Research Office has cut its forecast for Malaysia's economic expansion to 4.7% for 2024, from the previous estimate of 5%, to account for slower-than-expected export growth.

• Crude palm oil futures for the active months in 2024 are forecast to average between RM3,850 and RM4,000 per tonne on Bursa Malaysia, according to the Malaysian Palm Oil Association.

• Maxis Bhd is considering buying out U Mobile Sdn Bhd to help it expand in Malaysia, according to people with knowledge of the matter.

• The takeover offer for Malaysia Airports Holdings Bhd is expected to be finalised in the third quarter of this year, and will need to be approved by at least 90% of MAHB's existing shareholders.

• Vestland Bhd is acquiring office suites in Selangor and industrial warehouses in Sabah for a total of RM25.0mn.

• The public issue of Kucingko Bhd's IPO of 25mn shares made available to the Malaysian public has been oversubscribed 99.0 times.

• The consortium of Sea Ltd, which is the parent company of eCommerce platform Shopee, and YTL Power International Bhd's unit YTL Digital Capital Sdn Bhd, will launch its digital bank by the end of this year.

• Lion Group and Samsung SDS have signed a MoU to collaborate on implementing an innovative logistics optimisation system aimed at enhancing operational efficiency.

• Sarawak Cable Bhd said its chief financial officer, Teoh Wen Jinq, has resigned due to personal reasons, without elaborating.

• The International Monetary Fund kept its 2024 global real GDP growth forecast unchanged from April at 3.2% and raised its 2025 forecast by 0.1 percentage point to 3.3%.

Source: TA Research - 17 Jul 2024