Review & Outlook

The local market extended rebound a second day from Monday's selloff, led by energy, utility, construction and technology heavyweights, after Japan's central bank stated interest rates won't be raised if markets stay volatile. The FBM KLCI climbed 17.48 points to close at 1,591.87, off an early low of 1,563.77 and high of 1,596.60, as gainers led losers 1,061 to 270 on total turnover of 5.12bn shares worth RM4.02bn.

Stocks should extend recovery amid lessening worries over the US economy, geopolitical risks in the Middle East and assurance on monetary policy support from key global central bankers to cushion potential slowdown. Key index supports remains at recent low of 1,529, then 1,520 and 1,500, while immediate resistance on further rebound will be at 1,600, 1,620 and then 1,638.

Technical momentum buy signals on MRCB support further rise towards the 200-day ma (57sen), with breakout to aim for the 138.2%FP (60sen) and 150%FP (63sen) ahead, while the recent low of 47sen and 76.4%FR (46sen) cushion downside. Likewise, UEM Sunrise should recover further to 123.6%FP (RM1.10), with a confirmed breakout to extend rise towards the 138.2%FP (RM1.20) and 150%FP (RM1.29) going forward, and downside capped by recent low of 88sen.

News Bites

• Malaysia's international reserves on July 31 surged by US$1.4bn to US$114.7bn, the largest increase in eight months, from a fortnight earlier, and is sufficient to finance 5.5 months of imports of goods and services.

• Uzma Bhd has won a contract to supply a hydraulic workover unit for two offshore platforms in East Malaysia but the value of the contract was not disclosed.

• MN Holdings Bhd has partnered with a unit of China's largest construction and real estate conglomerate to explore collaborations in power industry projects, including data centre, solar and independent power plant sectors.

• Kawan Renergy Bhd's wholly-owned subsidiary, Kawan Engineering Sdn Bhd has secured a RM58mn contract from Kinergy Advancement Bhd's key sustainable energy solutions entity.

• HeveaBoard Bhd is supplying low formaldehyde emission particle boards to China's Boloni Intelligent Technology (Beijing) Co Ltd.

• Willowglen MSC Bhd has been awarded a contract valued at RM27.8mn from Kadenko Co Ltd, Singapore, for the provision of supervisory control and data acquisition and condition monitoring system, monitoring and control network.

• Northport (M) Bhd handled its highest-ever monthly container throughput of 354,548 twenty-foot equivalent units, surpassing the previous record of 335,361 TEUs set just two months ago in May 2024.

• Businessman Tan Sri Robert Tan Hua Choon has ceased to be a substantial shareholder of Paragon Globe Bhd after disposing of half his stake in the Johor-based developer.

• Heineken Malaysia Bhd's net profit rose 0.7% to RM91.1mn in the 2QFY2024, from RM90.5mn a year earlier, as lower operating expenses helped offset the impact of subdued consumer sentiments.

• Sentral Real Estate Investment Trust is expecting the Klang Valley office and retail markets to remain challenging.

• Hup Seng Industries Bhd's net profit grew 3.5% to RM9.0mn in 2Q24 although revenue fell marginally by 1.6% to RM80.2mn during the quarter under review.

• Electrical engineering services firm ES Sunlogy Bhd has filed for an initial public offering on the ACE Market to raise funds mainly for the expansion of its renewable energy business.

• The Bank of Japan will not hike its policy rate when financial and capital markets are unstable, Deputy Governor Uchida Shinichi said yesterday.

• China's exports climbed 7.0% YoY in July, a slower pace of growth than June's 8.6% rise and missing forecasts of a 9.7% increase.

• Indonesia is carrying out tests ahead of plans by the incoming government to increase the palm oil-based biodiesel blending mandate to 50%, from 35% now.

• The US Energy Information Administration maintained its 2024 world oil demand growth forecast of 1.1mn bpd to 102.9mn bpd but lowered its outlook for West Texas Intermediate crude prices for the year by 2.2% to US$80.21 a barrel.

Source: TA Research - 8 Aug 2024