Review & Outlook

The prevailing negative technical momentum and trend indicators on the FBM KLCI following last week's mild recovery attempt from the recent profit-taking correction implies market undertone remains weak and cautious in the absence of fresh local upside catalysts. However, given investor interest on measures likely to be proposed for the keenly anticipated Budget 2025 this Friday, selected sectors seen to benefit should see revived buying interest. Meantime, the robust performance witnessed on Wall Street last Friday sparked by optimism over strong earnings from big banks and softer producer price inflation increasing soft landing potential for the US economy should spillover to boost local sentiment.

Immediate index support will be the recent correction low of 1,625, with 1,620 and then 1,600 acting as stronger supports. Immediate resistance is set at 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.

On stock picks for this week, key construction, telco, utility heavyweights and selected technology counters should attract buyers for recovery upside ahead, given the good upside potential following recent corrections.

News Bites

• Malaysia's industrial production index increased by 4.1% YoY in August 2024, propelled by the moderate growth in the manufacturing sector.

• The government will only implement the Goods and Services Tax if the minimum income threshold is at RM3,000-RM4,000, said Prime Minister Datuk Seri Anwar Ibrahim.

• Gadang Holdings Bhd has entered into a sale and purchase agreement with Opulent Abode Sdn Bhd to dispose of a piece of leasehold land in Sungai Buloh, Selangor for RM65.0mn.

• Maxis Bhd has signed a MoU with Melaka ICT Holdings to further develop connectivity infrastructure in Melaka.

• Kerjaya Prospek Group Bhd has filed a new lawsuit against Yong Tai Bhd and its chief executive officer Datuk Boo Kuang Loon over an alleged unpaid contract sum of RM105.1mn related to a construction project in Melaka.

• Steel Hawk Bhd has been awarded a term contract by Petronas Gas Bhd for operational "pigging" supply and services.

• Glostrext Bhd is diversifying into the provision of power system products with a proposed acquisition of 70.0% stake in Powertecs System Sdn Bhd for RM4.2mn in a cash and share deal.

• Fajarbaru Builder Group Bhd has entered into a share purchase agreement with Mayfair International Investments Pty Ltd to dispose of 44.4% stake in BFB Project Pty Ltd for AUD4.2mn.

• Pharmaniaga Bhd has secured funding from the government for research and development of vaccines through the National Vaccine Production Development and Strengthening Fund.

• Exsim Borneo Sdn Bhd and a person acting in concert have proposed to acquire a 70.0% stake in Sabah-based property developer WMG Holdings Bhd at 16.5sen/share and make a general offer for the remaining shares at the same price.

• PUC Bhd has proposed to dispose of more of its software and intellectual property rights for RM19.5mn in cash, as part of its strategy to streamline operations and focus on more viable and profitable ventures.

• Alliance Bank Malaysia Bhd has appointed Tan Sri Amirsham Abdul Aziz as its new chairman effective from Oct 10.

• Press Metal Aluminium Holdings Bhd's executive director Datuk Koon Poh Kong has offloaded 6.3mn shares, representing 0.1% in the aluminium company, for a total of RM32.0mn.

• Pertama Digital Bhd saw its non-independent and non-executive chairman Datuk Ahmad Nazri Abdullah reemerged as a substantial shareholder after raising his stake to 34.3mn shares or 7.8% in the company.

• Barakah Offshore Petroleum Bhd announced the resignation of its independent non-executive chairman Datuk Mohd Zaid Ibrahim after five years at the helm.

• Rexit Bhd has announced the resignation of its executive chairman, Datuk Seow Gim Shen, just six weeks after taking on the role due to personal commitments and the growth of his other new business ventures.

• China pledged on Saturday to "significantly increase" debt to revive its sputtering economy, but left investors guessing on the overall size of the stimulus package.

• China's consumer price index rose 0.4% YoY in September, the slowest in three months, against a 0.6% rise in August.

Source: TA Research - 14 Oct 2024