Review & Outlook

As short and medium-term momentum and trend indicators on the FBM KLCI are issuing conflicting technical signals following last week's choppy trading sessions, more consolidation is expected for this shorter four-day trading week. Nevertheless, given the weak selling momentum following the recent profit-taking corrections, more keen bargain hunting interest should emerge from sidelined investors who are willing to commit fresh funds for recovery gains ahead. Meantime, investors will be keenly awaiting decision from the US central bank monetary policy meeting mid-week for a highly anticipated 25 basis point interest rate cut before increasing commitments.

Immediate index support remains the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports. Immediate resistance is set at 1,670, with the recent high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels.

On stock picks for this coming week, lower liner construction and oil & gas counters which have suffered sharp profit-taking corrections should begin to attract bargain hunters again, given their much cheaper entry levels for rebound upside ahead.

News Bites

• Forest City's special financial zone will be launched this Friday, with various incentives and packages to stimulate investment, growth and economic activities in Johor.

• The Employees Provident Fund and Lembaga Tabung Haji are no longer substantial shareholders of Globetronics Technology Bhd following the company's announcement of the voluntary resignation of its external auditor, KPMG PLT.

• PGF Capital Bhd has proposed to buy a piece of freehold land measuring 96,720 square metres in Kulim, Kedah for RM40mn.

• Pansar Bhd has secured a RM777.11mn road construction contract for Phase 2 of the Sabah-Sarawak Link Road project.

• Nextgreen Global Bhd announced that Tan Sri See Hong Cheen has secured 22.7mn NGGB shares, arising from a private placement exercise.

• Seal Incorporated Bhd's associate company, MSR Green Energy Sdn Bhd, has received a letter of award from Sabah Electricity Sdn Bhd for a battery energy storage system construction project valued at RM645mn.

• Tex Cycle Technology (M) Bhd's subsidiary, Tex Evolusi Waste Management Sdn Bhd, has received Environmental Impact Assessment approval from the Department of Environment for Sabah's first integrated off-site scheduled waste storage and recovery facility at Sipitang Oil and Gas industrial Park.

• HeiTech Padu Bhd has won a RM133.73mn contract from the Road Transport Department Malaysia

• Hong Leong Bank Bhd has enabled its HLB DuitNow QR merchants to accept Weixin Pay via its HLB DuitNow QR.

• MMAG Holdings Bhd is acquiring Velocity Capital Partner Bhd's 8.91% stake in its 86.09%-owned loss-making subsidiary, Line Clear Express Sdn Bhd, for RM13.75mn, cash.

• PMB Technology Bhd, which will raise the annual installed capacity of its metallic silicon output by 50% when its new Phase 3 plant in Samalaju Industrial Park in Bintulu starts commercial production soon, is poised to boost the supply of the strategic raw material to the expanding global solar industry.

• Cosmos Technology International Bhd is selling its entire equity interest in MCI Etech Sdn Bhd to Loyal Fame Sdn Bhd for RM12.31mn, cash.

• NTPM Holdings Bhd would capitalise on the growing demand for ecofriendly products by providing briefings for customers that promote the group's green-featured products with recycled and low-carbon contents.

• Chinese President Xi Jinping called on government officials at all levels to achieve the country's annual growth target of around 5% but couched it in less forceful terms than usual.

• New home prices in China were down 5.3% YoY in August, the fastest pace since May 2015, compared with a 4.9% slide in July, according to Reuters calculations based on National Bureau of Statistics data.

• The University of Michigan said its consumer sentiment index rose to 69.0 in September from 67.9 in August, while economists had expected the index to inch up to 68.0.

• The European Central Bank is open to considering an interest-rate cut in October if the economy suffers a major setback.

Source: TA Research - 17 Sept 2024