Review & Outlook

Following last week's mild recovery, short-term technical momentum indicators on the FBM KLCI turned positive, signaling further nearterm upside bias potential, but weak trend indicators and cautious market undertone suggest further consolidation as investors digest measures announced in Budget 2025. Sectors deemed to benefit from the measures announced should see increased buying interest, while the broader market extends consolidation.

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.

On stock picks for this week, key construction, oil & gas, gaming and utility heavyweights should attract buyers for recovery upside following recent corrections.

News Bites

• The Malaysian government has revised the 2024 expenditure 3.47% higher to RM407.5bn from the initial allocation of RM393.8bn, while allocating another RM421bn for Budget 2025.

• The Ministry of Finance projects the Malaysian economy to grow between 4.8% to 5.3% in 2024 and 4.5% and 5.5% in 2025.

• Malaysia's monthly minimum wage will be raised to RM1,700 from RM1,500, effective from Feb 1 next year,

• Malaysia's September exports hit RM124.01bn, down 3.9% from a month ago and slightly lower from September 2023.

• Malaysia will implement a two-tiered pricing system for RON95 petrol subsidies starting mid-2025 that will affect foreigners and top 15% of Malaysians.

• CIB Concrete Manufacturing Sdn Bhd, a wholly owned subsidiary of Sarawak Consolidated Industries Bhd, has accepted Islamic banking facilities totalling RM48.0mn from Affin Islamic Bank Bhd.

• HeiTech Padu Bhd has secured a contract worth RM892.2mn for the Malaysian Immigration Department's National Integrated Immigration System.

• Exsim Hospitality Bhd's, previously known as Pan Malaysia Holdings Bhd, wholly owned subsidiary Exsim Concepto Sdn Bhd has won a sub-contract work package for RM60.0mn.

• Sorento Capital Bhd's IPO saw strong demand, with the 43mn shares available to the public being oversubscribed by 39 times at an offer price of 37 sen per share.

• Sabah-based major road infrastructure construction firm Azam Jaya Bhd, is planning to raise RM61.5mn from its IPO.

• OB Holdings Bhd, slated for listing on the Ace Market of Bursa Malaysia on Oct 29, announced that the 19.58mn new shares it offered to the Malaysian public under its IPO have been oversubscribed by 109.5 times.

• EUPE Corporation Berhad's pre-tax profit rose by RM5.9mn or 38.8% to RM21.1mn in 2QFY25, up from RM15.2mn in 1QFY25.

• China's economy grew 4.6% in July-September, touch above a 4.5% forecast in a Reuters poll but below the 4.7% pace in the second quarter.

Source: TA Research - 21 Oct 2024