Review & Outlook

Blue chips bounced back on Tuesday, led by the construction (+4.8%), property (+4.6%) and technology (+3.9%) sectors, mirroring the rebound on regional markets led by Japan's 10.2% rally from the previous day's selloff. The FBM KLCI jumped 37.91 points, or 2.5%, to end at the day's high of 1,574.39, off an early low of 1,529.09, as gainers swarmed losers 1,083 to 309 on robust trade totaling 6.39bn shares worth RM5.32bn.

Stocks should remain choppy near-term given uncertainty over the growth momentum of the US economy, as investors begin to price in larger interest rate cuts to help cushion potential recession. Key index supports will be at yesterday's low of 1,529, then 1,520 and 1,500, while immediate resistance on rebound attempts will be at the 100-day ma (1,585), 1,600 and then 1,620.

Globetronics should be set for oversold rebound ahead, with downside cushioned by key chart supports at RM1.06 and Oct 2022 low (95sen), and overhead resistance at the 38.2%FR (RM1.28), with tougher resistance at 50%FR (RM1.38) and 61.8%FR (RM1.48). Likewise, Unisem should be due for oversold rebound, with key supports seen at the 50%FR (RM3.04) and 38.2%FR (RM2.84), and major upside hurdles viewed at the 200-day ma (RM3.55), RM3.90 and 123.6%FP (RM4.30).

News Bites

• The Malaysian economy is on the right track despite facing the risk of a recession in the US, said Finance Minister II Datuk Seri Amir Hamzah Azizan.

• Malaysia's Services Producer Price Index grew marginally by 0.7% to 115.7 points in the 2Q2024, compared to a 1.0% increase in 1Q2024.

• Keyfield International Bhd has secured a contract worth USD10mn to supply a maritime vessel for two years.

• Chin Hin Group Bhd is acquiring a 65% stake each in an engineering and construction firm CSS Engineering & Construction Sdn Bhd and a facilities and project management outfit Critical System Specialist Sdn Bhd for RM51.5mn in a cash and share deal.

• AWC Bhd said it is exploring opportunities to market new energy heavy trucks and construction machinery in Malaysia together with two China-based partners.

• AWC Bhd secured a RM10.2mn contract for the provision of cold water and sanitary plumbing systems, rainwater downpipe services and other sanitary fittings for a serviced apartment in Batu Caves from CBTech (M) Sdn Bhd.

• KPJ Healthcare Bhd said that it is not in a rush to inject more assets into Al-A'qar Healthcare REIT to raise fresh capital for its expansion plans.

• Johor Plantations Group Bhd is planning to raise up to RM3.0bn through a seven-year Islamic Commercial Papers Programme and a perpetual Islamic Medium Term Notes Programme.

• Elridge Energy Holdings Bhd has launched its prospectus for its listing on Bursa Malaysia's ACE Market that will raise up to RM203.0mn.

• I-Bhd on 6 Aug broke ground for SkyCity in I-City, Shah Alam. It is a 60- metre tower featuring a 600-metre glass slide that is poised to be a new tourist attraction.

• S P Setia Bhd officially launched the third phase of the Ferrous series of its Setia Alam Impian township development located in Shah Alam last Saturday.

• Hartalega Holdings Bhd posted a net profit of RM31.9mn for 1QFY25, a turnaround from the RM52.5mn loss recorded in 1QFY24, primarily due to a recovery in sales volume and increased average selling prices.

• The Federal Reserve Bank of Chicago President Austan Goolsbee said that recent weaker than expected job numbers and other data do not suggest that the U.S. economy is in a recession yet and added that the policy need not be restrictive if the economy is not overheating.

Source: TA Research - 7 Aug 2024