Review & Outlook

Blue chips extended consolidation on Thursday as rebound on technology and construction stocks were offset by profit-taking in banking and telco heavyweights. The FBM KLCI dipped 1.49 points to end at 1,638.31, off an early high of 1,649.87 and low of 1,637.91, but gainers led losers 669 to 353 on reduced turnover of 2.61bn shares worth RM2.94bn.

Stocks should extend range bound trade ahead of the weekend, with cautious market undertone persisting ahead of next week's highly anticipated US interest rate cut. Immediate index support remains at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Immediate resistance is revised lower to 1,670, with the recent high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels.

Tenaga needs to renew breakout momentum above the upper Bollinger band (RM15.15) to enhance upside potential towards the 123.6%FP (RM16.03) and 138.2%FP (RM16.91) ahead, while the 100-day ma (RM13.62) provides good uptrend support. TM will need convincing breakout above the 16/7/24 high (RM7.05) to enable uptrend extension towards the 123.6%FP (RM7.66) and 138.2%FP (RM8.04) going forward, with the 100-day ma (RM6.51) and 200-day ma (RM6.03) cushioning downside risk.

News Bites

• In the second quarter of 2024, Malaysia's retail sales decelerated to 0.6%, falling short of market expectations, according to Retail Group Malaysia.

• IOI Properties Group Bhd is expected to launch its IOI Industrial Park at Banting, Selangor by the second quarter of next year and is planning another one in Melaka that is expected to be launched 2 quarters later.

• Chin Hin Group Bhd's founder Datuk Seri Chiau Beng Teik has ceased to be a substantial shareholder in NCT Alliance Bhd after selling a 3.6% stake in the construction and property development company.

• ITMAX System Bhd's subsidiary has been appointed to operate a parking system that covers 5,113 street parking bays which are currently gazetted by Tangkak District Council for 15 years.

• Hibiscus Petroleum Bhd is proposing an additional 1.0sen dividend per share for the financial year ended 30 June 2024 that will raise its fullyear dividend payout to 8.5sen/share, up from the adjusted 3.25sen/ share for FY23.

• Private equity firm Creador Sdn Bhd has signed an agreement with CCK Consolidated Holdings Bhd for a RM163.1mn investment to acquire a 40.0% stake in the poultry company's Indonesian unit, PT Adilmart Tbk.

• Fiamma Holdings Bhd has signed a memorandum of understanding with Guangdong-based Zhuhai Samyou Environmental Technology Co Ltd to establish an air conditioning production facility in Malaysia.

• Ecobuilt Holdings Bhd has secured a RM190.0mn contract to undertake a construction job.

• Green Packet Bhd said that 4 of the 6 investors expected to subscribe to its private placement of over 598.0mn shares have withdrawn from the exercise.

• WTEC Group Bhd, a foam and fabric products maker, filed for an initial public offering on the ACE Market to raise funds for acquisition of a new, larger factory in Selangor.

• Binastra Corporation Bhd 2QFY24 net profit rose 171.4% YoY to RM22.9mn, as higher construction work activities and commencement of 5 new projects during the period led to its revenue surging 157.5% YoY to RM230.9mn.

• Po Huat Resources Holdings Berhad 3QFY24 net profit dropped 62.8% YoY to RM3.0mn while quarterly revenue dipped marginally by 2.1% YoY to RM105.1mn.

• The corporate goods price index, which measures the price companies charge each other for their goods and services, rose 2.5% in August from a year earlier, Bank of Japan data showed, slowing from a 3.0% gain in July.

• Initial claims for state unemployment benefits in the US rose 2,000 to a seasonally adjusted 230,000 for the week ended Sept 7.

• The European Central Bank cut interest rates again by 25 basis points to 3.50% in a widely telegraphed move on Thursday as inflation slows and economic growth falters but provided almost no clues to its next step.

• Global oil demand growth is "slowing sharply" as China's economy cools, pushing prices to a three-year low, the International Energy Agency said.

Source: TA Research - 13 Sept 2024