Review & Outlook

Last Friday's profit-taking dip on the FBM KLCI was likely sparked by traders reducing exposure on Malaysia, in favour of rallying North Asian markets triggered by the recent spate of significant stimulus measures from China to boost its floundering domestic economy. As a consequence of the fall, short-term technical momentum has somewhat deteriorated, implying further near-term correction potential. Nonetheless, bargain hunting interest should increase on any weakness given the underlying optimism over sustained ringgit strength amid expectation for further interest rate cuts by key global central bankers, which would continue to attract foreign fund inflows.

Immediate index resistance will be at the recent high of 1,675, with the next high of 1,684, then 1,695, the Dec 2020 high, as tougher resistance levels. Immediate support is retained at 1,650, with the recent correction low of 1,633, and 1,620 and then 1,600 acting as stronger supports.

On stock picks for this week, key banking, telco and rubber glove counters should again attract bargain hunters for recovery upside, following recent profit-taking corrections as longer-term upside potential remain bright.

News Bites

• Barisan Nasional, a key ally of PM Datuk Seri Anwar, won 79% of the votes in a straight fight against the Perikatan Nasional opposition pact in Mahkota constituency in Johor.

• Gamuda Bhd has bagged a A$243.0mn construction contract for the design and construction of the Boulder Creek Wind Farm in Queensland, Australia.

• Sarawak has raised its stake in Affin Bank Bhd to 31.3% after concluding a sales and purchase agreement with Lembaga Tabung Angkatan Tentera and Boustead Holdings Bhd.

• The toll collection for Section 1 of the West Coast Expressway, which connects the Banting Interchange to the South Klang Valley Expressway Interchange, will commence today, according to WCE Holdings Bhd.

• Citaglobal Bhd has entered into a binding term sheet with Germany's LAWI Engineering GmbH to collaborate exclusively on providing advanced waste-to-energy technology and engineering solutions for waste management projects identified by Citaglobal and its affiliates.

• PT Resources Holdings Bhd's partnership with China's Ocean Exchange (Fujian) Foreign Trade Services Co Ltd to develop the Malaysia East Coast International Supply Chain Intelligent Park in Kuantan, Pahang has fallen through.

• Signature International Bhd plans to transfer its ownership in the 2 subsidiaries it wants to spin off for a listing into a newly formed entity, Signature Alliance Group Bhd, and then offer 26% of the latter's enlarged share base to the public via an initial public offering.

• HeiTech Padu Bhd is acquiring a 30% stake in a privately held company, Souqa Fintech Sdn Bhd, for RM16.2mn.

• Powerwell Holdings Bhd has secured a RM13.3mn contract to supply low-voltage switchboards for data centre projects in Indonesia.

• Bintai Kinden Corporation Bhd is doubling down on its construction division as part of its proposed regularisation plan to uplift the company from its Practice Note 17 status.

• Talam Transform Bhd has proposed to consolidate every 5 existing shares held by its shareholders into 1 share, with the entitlement date to be determined later.

• Propel Global Bhd has proposed to acquire an additional 39% stake in Best Wide Engineering (M) Sdn Bhd for RM6.2mm.

• Metro Healthcare Bhd has signed an underwriting agreement with MIDF Amanah Investment Bank Bhd for its listing transfer from the LEAP Market to the ACE Market of Bursa Malaysia.

• OB Holdings Bhd plans to raise RM28.8mn through its initial public offering upon listing on Bursa Malaysia's ACE Market on 29 October 2024.

• KHPT Holdings Bhd announced that the 20.1mn shares made available to the Malaysian public in its IPO have been oversubscribed by 124.1 times.

• Crescendo Corporation Bhd 2QFY25 net profit surged more than 30- fold YoY to RM140.8mn boosted by its data centre-linked land sales in Nusa Cemerlang Industrial Park, Johor.

• Kim Loong Resources Bhd 2QFY25 net profit fell 8.9% YoY to RM39.5mn, no thanks to lower earnings contribution by its palm oil milling operations due to lower crude palm oil extraction rates.

• Industrial profits at large Chinese companies decreased 17.8% year-onyear in August, after a 4.1% gain in July.

• The US core personal consumption index advanced 2.7% YoY in August after climbing 2.6% YoY in July.

Source: TA Research - 30 Sept 2024