Review & Outlook

Blue chips stayed range bound on Thursday, with profit-taking on recent gainers checking investor optimism over higher probability for the US Federal Reserve to begin cutting interest rates. The FBM KLCI ended flat at 1,612.94 (+0.59) after oscillating between opening high of 1,614.69 and low of 1,605.69, as losers swarmed gainers 768 to 285 on moderate turnover of 3.57bn shares worth RM2.77bn.

The local market should extend sideways trade as investors search for clearer local leads ahead of the weekend, while market undertone remains upbeat given recent tamer US inflation data which should encourage the US Federal Reserve to ease monetary policy. 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.

Genting Berhad need to overcome the 50%FR (RM4.52) constructively to sustain recovery momentum and aim for the 61.8%FR (RM4.66) and 76.4%FR (RM4.83) ahead, with downside cushioned by the recent steep selloff to the 23.6%FR (RM4.21). GENM will need confirmed breakout above the 50%FR (RM2.58) to target the 61.8%FR (RM2.65) and 76.4%FR (RM2.72) going forward, with the Oct 2023 pivot low (RM2.32) acting as crucial chart support to limit downside risk.

News Bites

• IJM Corp Bhd's proposed acquisition of a 44.8% stake in Pestech International Bhd in a RM124mn cash deal, or 15.5 sen per share, has fallen through.

• S P Setia Bhd has commenced arbitration proceedings against Putrajaya Holdings Sdn Bhd for breach of contract with claims in damages of RM69.5mn.

• Sapura Resources Bhd said its board of directors is assessing the competition and conflict that might occur in its aviation business, if Explorer Group Sdn Bhd and Royal Jet LLC join hands in the business.

• Dayang Enterprise Holdings Bhd's wholly-owned unit DESB Marine Services Sdn Bhd has been appointed by Petronas Carigali Sdn Bhd as one of its panel of contractors for offshore support vessel services for petroleum arrangement contractors.

• Magma Group Bhd has obtained Bursa Malaysia Securities Bhd's approval for the listing and quotation of up to 1.0bn new shares through redeemable convertible notes, subject to shareholder approval.

• Boustead Heavy Industries Corp Bhd has secured a RM378mn contract from the Defence Ministry for in-service support and performancebased services for the Royal Malaysian Air Force helicopters.

• Malaysia's top mini-market chain retailer 99 speed Mart Retail Holdings on Thursday launched an initial public offering that would raise RM2.4bn, the country's biggest IPO in seven years.

• Sunway Real Estate Investment Trust reported an 11.3% increase in net property income to RM129.3mn in 2QFY2024, from RM116.2mn a year ago, driven by an enlarged property portfolio and improved retail and hotel segment performance.

• Keyfield International Bhd's net profit for the 2QFY2024 surged 131.8% to RM70.0mn from RM30.2mn a year ago, driven by revenue growth contributed by its own vessels and third-party vessel segments.

• Samchem Holdings Bhd's net profit for 2QFY2024 dropped 6.3% to RM5.1mn from RM5.4mn a year ago due to lower gross profit margins.

• Dialog Group Bhd reported a 9% increase in net profit to RM138.4mn for 4QFY2024 from RM126.8mn a year earlier, driven by higher upstream production.

• Duopharma Biotech Bhd reported a 33.1% increase in net profit to RM16.7mn in 2QFY2024, from RM12.5mn a year ago.

• ELK-Desa Resources Bhd reported a 4% decline in net profit to RM8.1mn for the 1QFY2025, from RM8.5mn a year ago. Revenue grew 17% to RM45.9mn, driven by increased contributions from its hire purchase and furniture segments.

• China's retail sales increase by 2.7% in July, rebounding from 2% in June. Meanwhile, industrial production softened slightly to 5.1% in July down from June's increase of 5.3%.

• China's commerce ministry said on Thursday that it would impose export controls on antimony and other elements, in the name of protecting national interests and security, effective from Sept 15.

• Initial claims for state unemployment benefits in the US dropped 7,000 to a seasonally adjusted 227,000 for the week ended August 10.

Source: TA Research - 16 Aug 2024