Review & Outlook

The local blue-chip benchmark index rallied to a near four-year high on Monday, fuelled by strong gains in key banking stocks which surged 3.7% after the country's 2Q24 GDP rose to a stronger-than-expected 5.9% growth. The FBM KLCI surged 24.8 points, or 1.53% to close at 1,648.70, off an opening low of 1,624.58 and high of 1,653.35, as gainers led losers 606 to 546 on total turnover of 3.89bn shares worth RM4.30bn.

Blue chips should pause for profit-taking breather after yesterdays' strong rally, as investors wait for more economic cues from the region's upcoming inflation data and central bank decisions. Immediate index resistance levels are revised higher to 1,660, followed by 1,680 and then 1,695, the Dec 2020 high, while immediate supports are at 1,620, then 1,600 and 1,580 as stronger supports.

Supermax will need to overcome immediate resistance from 98sen to enhance upside momentum and aim for RM1.04 and RM1.10 ahead, while the lower Bollinger band (80sen) and recent selloff low of 79sen should act to limit downside risk. Likewise, Top Glove need sustained buying momentum to break above the RM1.10 immediate resistance and target RM1.20 and RM1.31 prior to profit-taking pause, with downside cushioned by the recent selloff low of 85sen.

News Bites

• Malaysia's exports accelerated to its fastest pace in nearly two years to RM131.15bn, or 12.3% YoY, thanks to demand for commodities and electronics as well as higher shipments to advanced economies.

• Conglomerate IJM Corp Bhd has secured two contracts worth a total RM561mn to construct data centres in Johor and an industrial manufacturing facility in Penang.

• Kerjaya Prospek Bhd via its wholly-owned subsidiary Kerjaya Prospek (M) Sdn Bhd has secured a RM275.3mn contract from Persada Mentari Sdn Bhd, an indirect subsidiary of Eastern & Oriental Bhd, for the completion of a building at Bandar Tanjung Pinang in the Andaman Island in Timur Laut, Penang Island.

• Malaysia Airports Holdings Bhd recorded 12.4mn passenger movements in July, marking a 7.3% increase from the previous month and setting a new post-pandemic monthly high.

• OCK Group Bhd, via its subsidiary EI Power Technologies Sdn Bhd, has secured three new data centre backup power solutions contracts valued at RM32.5mn.

• Property developer EcoFirst Consolidated Bhd is acquiring a 4.5-acre piece of freehold land in Kajang for RM35mn to develop a mixed-use project, with an estimated gross development value of RM380.9mn.

• CTOS Digital Bhd has upped its dividend policy payout, starting from the financial year ending Dec 31, 2024. The credit reporting firm said it targets to pay dividends in the range of 60% to 70% (from 60% previously).

• Tex Cycle Technology (M) Bhd has proposed to acquire a 60% stake in Safety & Environmental Laboratory Sdn Bhd for RM8.4mn to enhance its environmental testing and compliance services.

• LEAP Market-listed Sunmow Holding Bhd's joint-venture company has secured a RM1.0bn contract for road construction under the SarawakSabah Link Road project. Sunmow holds a 70% stake in the JV, with Kemena Holding Sdn Bhd owning 30%.

• Batu Kawan Bhd and its 47.9%-owned subsidiary, Kuala Lumpur Kepong Bhd, reported higher earnings for the 3QFY24, driven by strong performance in the plantation segment.

• Carlsberg Brewery Malaysia Bhd, having invested approximately RM200mn in capital expenditure over the past three years, is committed to further spending to future-proof its business.

• Lagenda Properties Bhd will be looking to unlock the value of its land bank by building a robust, long-term development pipeline that will enable the group to strategically plan and execute projects that align with market demands.

• The U.S. Conference Board said its leading economic index slid by 0.6% in July after dipping by 0.2% in June due to a deterioration in new orders, persistently weak consumer expectations of business conditions, and softer building permits and hours worked in manufacturing.

• Thailand's GDP grew 2.3% in the April-June quarter from a year earlier, due to higher consumption, tourism and exports, official data showed on Monday.

Source: TA Research - 20 Aug 2024