Review & Outlook

Blue chips traded sideways on Tuesday, with late bargain hunting in banking and plantation heavyweights lifting the index, while profit-taking dragged the broader market for softer close. The FBM KLCI added 2.86 points to end at the day's high of 1,609.52, off an early low of 1,598.30, but losers beat gainers 705 to 334 on slower trade totalling 3.42bn shares worth RM2.5bn.

The local market should extend rebound along with the region following overnight strength on Wall Street on hopes easing inflation could encourage the US central bank to cut interest rates. Immediate index resistance stays at 1,620, followed by 1,628 and then 1,638, while immediate supports are at 1,580, then 1,550 and recent low of 1,529, with 1,520 and 1,500 as stronger supports.

Maybank need to overcome the upper Bollinger band (RM10.28), matching the 123.6%FP level, to extend uptrend and target the 138.2%FP (RM10.58) and 150%FP (RM10.82) ahead, with uptrend support from the rising 100- day ma (RM9.90) cushioning downside. Public Bank will need resurgent buying momentum to break above the 21/2/24 high (RM4.41) and aim for the 123.6%FP (RM4.60) and 138.2%FP (RM4.72) going forward, with the 61.8%FR (RM4.10) providing strong support in the recent selloff.

News Bites

• Axiata Group Bhd's 63%-owned tower company, Edotco Group Sdn Bhd, signed MOUs with Malaysia Digital Economy Corporation and Boost Holdings Sdn Bhd to boost Malaysia's digital economy.

• The operating environment for Malaysian banks is expected to remain favourable over the next 12-18 months on sustained credit demand, recovery in net interest margins and constructive market trading environment, according to Fitch Ratings.

• LBS Bina Group Berhad's subsidiary, Gerbang Mekar Sdn Bhd, is facing a RM43.0mn claim filed by Mega Planner Jaya Sdn Bhd, now in liquidation.

• Uzma Bhd is hoping to get the nod for its licence from the Energy Commission to commence operations of its 50 megawatt large-scale solar 4 project in Sungai Petani.

• Paramount Corp Bhd has issued its first sustainability-linked sukuk wakalah of RM100mn in nominal value today with AmBank Islamic Bhd as the sole subscriber.

• Signature International Bhd is proposing to dispose of two pieces of vacant freehold industrial lands in Tempat Bandar Baru Enstek, Negeri Sembilan to Loi Foon Kion for RM25.7mn.

• Felda's 81.9%-owned FGV Holdings Bhd reaffirmed its plans to undertake a bonus issue to reduce Felda's stake in FGV to meet public shareholding spread requirements.

• Minetech Bhd via its wholly-owned subsidiary Coral Evergreen Sdn Bhd has secured a RM36.8mn subcontract from Puncak Utara Sdn Bhd for a sewage system upgrading project and associated works at Ketengah Jaya, Bukit Besi and Seri Bandi Phase III, in Ketengah, Terengganu.

• Solar District Cooling Group Bhd, a provider of building management systems en route to its ACE Market debut, has signed an underwriting agreement with Mercury Securities Sdn Bhd for its initial public offering.

• Enest Group Bhd, a bird's nest supplier listed on the LEAP Market since August 2019, plans to transfer to the ACE Market on Bursa Malaysia.

• MR DIY Group (M) Bhd said the positive economic indicators, the improving ringgit against major currencies and the influx of foreign investments are signs the group could look forward to improving customer sentiment, which in turn would fuel its growth.

• Tex Cycle Technology (M) Bhd said there are positive signs in the scheduled waste management business given the government's push for the compliance of waste generators and promotion of the renewable energy space.

• Singapore's economy grew 2.9% YoY in the 2Q24, matching the official advance estimate and above market expectations.

• China's bank lending plunged 88% MoM to CNY260bn (US$36.28bn or RM161.4bn), hitting the lowest in nearly 15 years, dragged down by tepid credit demand and seasonal factors and raising expectations that the central bank may dole out more easing steps.

• US producer prices rose 2.2% YoY or 0.1% MoM in July, less than forecast 0.2% MoM gain, reflecting the first decline in services costs this year amid an ongoing moderation in inflationary pressures.

Source: TA Research - 14 Aug 2024