Review & Outlook

The local market stayed mostly range bound on Wednesday, with rubber glove stocks giving up some of the recent sharp gains fuelled by hopes for strong export demand due to the steep US tariff hikes on China's products. The FBM KLCI slipped 3.69 points to close at 1,660.59, off an opening high of 1,664.78 and low of 1,654, as losers beat gainers 526 to 442 on reduced turnover totalling 2.29bn shares worth RM2.75bn.

The local market should remain in consolidation mode with downside bias given the lack of positive catalyst on the local front, while investors digest the Federal Reserve's decision to lower interest rates by a half percentage point. Immediate index resistance remains at 1,670, with the recent high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support will be at the recent correction low of 1,633, with 1,620 and 1,600 acting as stronger supports.

MRCB will need to climb above the 76.4%FR (63sen) to fuel further upside momentum towards 70sen and the 20/5/24 high (74sen), while downside risk should be contained by the lower Bollinger band (50sen) and 38.2%FR (46sen). SunCon need breakout confirmation above the 123.6%FP (RM4.54) to enhance recovery potential towards the 138.2%FP (RM4.87) and 150%FP (RM5.14) going forward, while the 100-day ma (RM3.88) and lower Bollinger band (RM3.73) limit downside risk.

News Bites

• WCT Holdings Bhd has proposed to dispose of three retail properties for RM2.4bn to a newly established real estate investment trust named Paradigm REIT, which will be listed on the Main Market of Bursa Malaysia.

• Bursa Malaysia has approved Capital A Bhd's EGM circular detailing the proposed disposal of its aviation business to sister company AirAsia X Bhd and an EGM will be held within the next three weeks for shareholders to vote on the proposal.

• Press Metal Aluminium Holdings Bhd said it has teamed up with three Indonesian companies to operate an alumina refinery plant in West Kalimantan, Indonesia.

• YBS International Bhd has proposed to acquire 100% equity in precision manufacturing services units from Allied Technologies Holdings Pte Ltd for a total indicative consideration price of USD38.0mn.

• MY E.G. Services Bhd has increased its stake to 14.9% in HeiTech Padu Bhd following news that HTPADU has once again become a leading contender for the multi-billion ringgit National Integrated Immigration System project.

• Barakah Offshore Petroleum Bhd said it is in preliminary talks with a potential buyer from an Indonesian firm for its Kota Laksamana 101 barge.

• Niche Capital Emas Holdings Bhd said it has received approval from the Kelantan Department of Mineral and Geoscience to commence hard rock mining operations on a 547-hectare site in Tanah Merah district.

• Sarawak Consolidated Industries Bhd said it is buying a vacant leasehold land measuring 2.5 hectares in Bintulu for RM9.2mn to undertake a housing project.

• Securemetric Bhd has been awarded a contract valued at RM14.4mn to provide subscription and support and maintenance services for public key infrastructure, hardware security module, SigningCloud and electronic Know Your Customer.

• Pekat Group Bhd has accepted a RM115.0mn contract from MF Solar Tronoh Sdn Bhd to undertake engineering, procurement, construction and commissioning works for a 30.0MW AC solar photovoltaic plant for the corporate green power programme at Belanja in Kinta, Perak.

• TSR Capital Bhd has accepted a letter of acceptance from Sime Darby Property Bhd for a construction earthworks job at Elmina Business Park 2, Gombak, Selangor worth RM75.0mn.

• Kimlun Corporation Bhd has accepted the award of a construction contract from Tanah Sutera Development Sdn Bhd for a residential development in Johor Bahru for a total sum of RM128.1mn.

• Solar District Cooling Group Bhd has accepted two contracts from Mitrajaya Corp Sdn Bhd valued at a combined RM8.1mn for works for an 11-storey hospital in Section 14, Shah Alam.

• Haily Group Bhd has accepted a letter of award from Meridin East Sdn Bhd for the construction and completion of 393 units of terrace houses and 2 substations at Taman Bestari Perdana Johor Baru, Johor, worth RM75.9mn.

• Crest Group Bhd, en route to its listing on the ACE Market of Bursa Malaysia, aims to raise RM45.8mn from its IPO. The IPO is priced at 35.0sen/share, and the listing is scheduled for Oct 9, 2024.

• The Federal Reserve lowered its benchmark interest rate by a half percentage point to between 4.75% and 5.00% yesterday, an aggressive start to a policy shift aimed at bolstering the US labour market.

Source: TA Research - 19 Sept 2024