Review & Outlook

The local market continued trading sideways on Tuesday, with investors still digesting the Budget 2025 contents while mild bargain hunting interest highlight construction stocks. The FBM KLCI shed 3.14 points to close at 1,642.54, off an early low of 1,642.35 and high of 1,648.31, as losers edged gainers 509 to 460 on lower turnover of 2.67bn shares worth RM2.49bn.

Market sentiment will likely stay cautious, with uncertainties lingering over the upcoming key general elections in Japan and the US keeping investors sidelined. 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.

Any further weakness in Bumi Armada should attract bargain hunters looking for rebound upside towards the 61.8%FR (57sen) with stronger resistance coming from the 76.4%FR (63sen) and 07/02/23 high (73sen) ahead, and chart support coming from the 23.6%FR (42sen). Meanwhile, Dialog is attractive to bargain for oversold rebound to the 61.8%FR (RM2.28), with next resistance coming from the 76.4%FR (RM2.43), while key support from the lower Bollinger band (RM2.08) and 38.2%FR (RM2.04) cushion downside risk.

News Bites

• Malaysia's international reserves stood at US$119.6 bn as at Oct 15, 2024, sufficient to finance 4.8 months of imports of goods and services, and is 0.9 times the total short-term external debt.

• Gamuda Bhd and its joint-venture partners have been awarded a RM4.3bn main design and build contract by the Department of Rapid Transit Systems, New Taipei City Government, to deliver the Xizhi Donghu Mass Rapid Transit in Taiwan.

• Bahvest Resources Bhd has entered into an exclusive prospecting and contract of works agreement with Aurelius Borneo Mining Sdn Bhd, which is involved in gold mining.

• Teo Seng Capital Bhd has proposed a one-for-one bonus issue of up to 300mn shares to reward shareholders.

• Loss-making Green Ocean Corp Bhd has proposed to undertake a RM92.5mn share capital reduction to wipe out the food and beverage distributor's accumulated losses.

• HSS Engineers Bhd's wholly-owned subsidiary HSS Engineering Sdn Bhd has entered into a joint venture and shareholders' agreement with OPUS International (M) Bhd to provide engineering and technical services.

• Contract manufacturer Ge-Shen Corp Bhd has obtained shareholders' approval to buy a 40% stake in electronic manufacturing services firm Local Assembly Sdn Bhd for RM48mn cash.

• Willowglen MSC Bhd's wholly-owned subsidiary Wollowglen Services Pte Ltd has secured a contract of about RM16.4mn from Kandenko Co Ltd Singapore for the supply and installation of hardware and software for the security system for electrical facilities.

• Globetronics Technology Bhd said its CEO Heng Charng Yee and executive director Kang Wei Luen have resigned from their positions.

• Midvest Asia Sdn Bhd has ceased to be a substantial shareholder of Wasco Bhd, formerly known as Wah Seong Corp Bhd, after disposing of a 2.6% stake in the energy infrastructure group.

• Sabah beverage manufacturer Life Water Bhd plans to use the proceeds of its upcoming listing on the Main Market of Bursa Malaysia to expand into Sarawak and Brunei.

• The Biden administration finalised rules for a 25% tax credit for semiconductor manufacturing projects, expanding eligibility for what is likely to be the largest incentive programme from the 2022 Chips and Science Act.

• The International Monetary Fund projects the global economic growth at 3.2% in 2025, unchanged from 3.2% in 2024 but one-tenth of a percentage point lower than its forecast in July, while medium-term growth is expected to fade to a "mediocre" 3.1% in five years.

Source: TA Research - 23 Oct 2024