Review & Outlook

Stocks fell into profit-taking consolidation mode on Wednesday, mirroring regional weakness which reflect investor disappointment over the lack of concrete stimulus plans from China. The FBM KLCI shed 9.34 points to end at 1,632.63, off an opening high of 1,643.80 and low of 1,629.81, as losers swarmed gainers 700 to 341 on cautious trade totaling 2.79bn shares worth RM3.17bn.

Local market sentiment should stay cautious as investors await the Budget 2025 proposal on Friday, with sectors speculated to benefit to attract trading interest. Immediate index resistance remains 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. Immediate support will be the recent correction low of 1,625, with 1,620 and then 1,600 acting as stronger supports.

Further decline on DNEX should attract buyers looking for rebound upside, with a climb above the 200-day ma (39sen) to enhance upside potential towards 42sen and the 23.6%FR (46sen) before pausing, while the lower Bollinger band (33sen) and Jan low (31sen) limit downside risk. Unisem will be good to bargain on weakness for recovery upside, with a breach above the 23.6%FR (RM3.25) to aim for the 38.2%FR (RM3.47) and 50%FR (RM3.64) ahead, and support at the 26/9/24 low (RM2.90) and RM2.70 capping downside.

News Bites

• Malaysia federal government's debt growth trend is expected to continue to decrease, ending 2024 at around 7.5% compared to 8.6% in 2023 and 10.2% in 2022, according to the Ministry of Finance.

• AirAsia X Bhd shareholders and proxies have voted 99.08% in favour of the proposed RM6.8bn acquisition of AirAsia's aviation business - AirAsia Bhd and AirAsia Aviation Group Ltd - from its sister company Capital A Bhd.

• LFE Corp Bhd has won a RM38.8mn subcontract from Gamuda Engineering Sdn Bhd for a hyperscale data centre in Elmina Business Park, Sungai Buloh.

• Crescendo Corp Bhd is buying SGR Land Development Sdn Bhd and taking on its six land purchase obligations in Johor for RM168.9mn.

• Fajarbaru Builder Group Bhd, which secured a contract in April for the first phase of WCT Holdings Bhd's AdisonWest project in Johor Bahru, has been awarded a second contract valued at RM246.1mn.

• Infoline Tec Group Bhd and Pappajack Bhd have received approval from the Securities Commission Malaysia to transfer their listings from the ACE Market to the Main Market of Bursa Malaysia.

• Econpile Holdings Bhd has secured a RM35.1mn contract to perform bored piling, earthworks, and sub-structure works for an apartment project in Kuala Lumpur.

• Aizo Group Bhd, formerly known as Minetech Resources Bhd, has signed an MOU with NetRunner Sdn Bhd to jointly establish a Tier 4 data centre hub in Sarawak.

• Radiant Globaltech Bhd has secured a RM25mn contract from an unnamed utility company for a hardware technical refresh project.

• Kawan Food Bhd announced on Wednesday the redesignation of its independent non-executive director Lim Hun Soon @ David Lim, as its non-independent and non-executive chairman, effective immediately.

• Securities in Pan Malaysia Holdings Bhd will be traded and quoted under its new name, Exsim Hospitality Bhd, effective 9am on Friday, Oct 18, 2024.

• LBS Bina Group Bhd officially launched its latest RM9.5bn GDV 315- acre township development named Rimbawan in Genting Highlands, Pahang on Tuesday.

• The Bank of Thailand voted 5-2 to cut the one-day repurchase rate by a quarter of a percentage point to 2.25% at Wednesday's meeting.

• The Philippine central bank cut its benchmark interest rate by 25 basis points to 6% for the second time this year, as slowing inflation gave it room for further easing.

• US mortgage rates rose sharply for a second straight week, reaching the highest level of 6.52% since early August while prompting steep declines in both home-purchase and refinance activity.

Source: TA Research - 17 Oct 2024