Review & Outlook

The local market fell into correction mode on Wednesday, as traders reduced market exposure after Iran retaliated with missiles against Israel for the incursion into Lebanon soil, increasing the risk for huge escalation of the war in the Middle East region. The FBM KLCI shed 17.08 points, or 1.03% to close at 1,639.31, off an early high of 1,647.30 and low of 1,633.08, as losers swarmed gainers 874 to 270 on higher turnover of 3.86bn shares worth RM2.72bn.

Stocks should extend correction mode in the immediate term, as escalating geopolitical tensions play out and widen the conflict in the Middle East region, which will overshadow recent optimism over the strong ringgit and foreign fund inflows. Immediate index support remains at the recent correction low of 1,633, with 1,620 and then 1,600 acting as stronger supports. Immediate resistance is revised lower to 1,660, followed by the recent highs of 1,675 and 1,684, and then 1,695, the Dec 2020 high, as tougher resistance levels.

Supermax need breakout confirmation above the 200-day ma (88sen) to boost upside momentum towards RM1.00 and RM1.10, while downside risk is restricted by the lower Bollinger band (75sen). Meantime, Top Glove will need to sustain above RM1.10 to improve recovery upside towards the recent peaks of RM1.21 and RM1.31 ahead, with the 200-day moving average (96sen) and lower Bollinger band (86sen) acting as important chart supports.

News Bites

• Sunway Bhd plans to buy a 17.58-acre (7.11-hectare) prime land in Taman Taynton, Kuala Lumpur, for RM320mn, earmarking it for mixeduse development.

• Samaiden Group Bhd has bagged a RM39.2mn contract to undertake a 10-megawatt LSS PV power plant in Bahau, Negeri Sembilan, in a related-party transaction.

• Econpile Holdings Bhd has secured two contracts from Sg Besi Construction Sdn Bhd, totalling RM33.3mn, to carry out piling and substructure works for residential and office buildings in Kuala Lumpur.

• Sin-Kung Logistics Bhd is diversifying into private jet charter and air freight cargo services with the acquisition of loss-making Prima Air Sdn Bhd for RM20.7mn cash.

• Jentayu Sustainables Berhad and its subsidiary Oriole Power Sdn Bhd have signed a Project Development Collaboration Agreement with Sumitomo Corporation for the 162-megawatt Project Oriole, a run-ofriver hydropower plant in Sipitang, Sabah.

• Google held a groundbreaking ceremony on Tuesday at The St Regis Kuala Lumpur to commence the construction of its first data centre in Malaysia at Sime Darby Property Bhd's Elmina Business Park in the City of Elmina township, Selangor.

• KIP Real Estate Investment Trust has secured shareholders' approval to acquire the DPulze Shopping Centre in Cyberjaya for RM320mn.

• Sunsuria Bhd has revoked its proposed RM800,000 acquisition of an 80% stake in Mayer Land Sdn Bhd, which have allowed Sunsuria to participate in Mayer Land's two Rumah Selangorku projects and a mixed development in Penang.

• MMAG Holdings Bhd has been classified as a Guidance Note 3 company after its external auditor, Grant Thornton Malaysia PLT, flagged material uncertainty in the company's audited financial statements for the FY23 that would affect its ability to continue as a going concern.

• Bank Islam Malaysia Bhd has issued the second tranche amounting to RM250mn under its RM5bn sukuk wakalah programme.

• Japan's new Prime Minister Shigeru Ishiba said the economy isn't ready yet for further interest-rate hikes, in comments that jolted the yen.

• ADP said private sector employment in the US climbed by 143,000 jobs in September after rising by an upwardly revised 103,000 jobs in August.

• France, Greece, Italy and Poland will vote on Friday for tariffs of up to 45% on imports of electric vehicles made in China, sources said, enough to get the European Union proposal passed.

• The European Commission moved to postpone a landmark law to tackle global deforestation by 12 months, submitting to immense pressure from commodity-producing countries and industry.

• The Organization of the Petroleum Exporting Countries and its allies made no changes to plans to start gradually reviving oil production towards year end, despite signs of an impending surplus.

Source: TA Research - 3 Oct 2024