Review & Outlook

Stocks ended higher on Wednesday, mirroring optimism from US and key regional markets following the U.S. presidential election results, with keen bargain hunting interest seen in the technology, construction and health care sectors. The FBM KLCI climbed up 13.47 points to settle at the day's high of 1,634.17, off an early low of 1,623.52, as gainers swarmed losers 849 to 352 on higher turnover of 3.4bn shares worth RM2.92bn.

The local market should remain upbeat, lifted by China's central bank plans to increase intensity of counter-cyclical monetary policy to address short-term economic challenges. Immediate index resistance is revised to the recent high of 1,648, with next upside hurdles seen at 1,660 and 1,675. Immediate support stays at the 1,600 psychological level, with next crucial support coming in at the 200-day moving average level of 1,593, and next at 1,575, the 76.4%FR level.

Supermax would need to overcome resistance at RM1.00 to enhance recovery upside towards RM1.09 and RM1.20 ahead, while stronger retracement support is found at the lower Bollinger band (80sen) followed by 75sen. Top Glove needs convincing breakout above RM1.20 to target RM1.30 and RM1.40 before profit-taking cap upside, while the 200-day moving average (98sen) and 90sen act as important chart supports.

News Bites

• Bank Negara Malaysia has kept the overnight policy rate unchanged at 3%, as widely expected, as it noted the continued expansion of the global economy and the sustained strength of domestic economic activities with inflation remaining "modest".

• The government has decided to implement a two-tier pricing mechanism for the targeted RON95 petrol subsidy, Economy Minister Rafizi Ramli told Parliament on Wednesday. The mechanism is currently still being refined.

• Pharmaniaga Bhd has revised its regularisation plan to address its Practice Note 17 status. The plan now includes a RM520mn capital reduction as well as a rights issue set to raise up to RM353.5mn.

• Security-based ICT provider Datasonic Group Bhd has proposed to undertake bonus issues of up to 1.55bn warrants on the basis of one warrant for every two shares held by shareholders.

• The Federal Court has dismissed a businesswoman's appeal against a Court of Appeal decision that overturned a High Court ruling awarding her RM200,000 in damages from CTOS Data Systems Sdn Bhd, a subsidiary of CTOS Digital Bhd.

• JAKS Resources Bhd has agreed to pay RM5.0mn, cash, within 12 months to Star Media Group Bhd to settle their legal dispute over the development of a parcel of land in Section 13, Petaling Jaya.

• Parkson Holdings Bhd's unit, Parkson Retail Group Ltd, has secured two major leases in China, totaling approximately RM358.8mn.

• Haily Group Bhd has secured a contract worth RM89.9mn from Mah Sing Group Bhd to build terrace homes for a housing project in Taman Tiara Indah, Johor Bharu, Johor, which pushes the value of its outstanding orders past RM1.0bn.

• Direct selling company DXN Holdings Bhd, which sells health and wellness products, said on Wednesday it plans to charter a Gulfstream G550 corporate jet from its major shareholder that will cost up to USD6.6mn (RM29.1mn) a year to expand its global business.

• Sarawak Consolidated Industries Bhd is acquiring four plots of land totaling 7.3 hectares in Bintulu, Sarawak from Wong Kwong Hie Enterprise Sdn Bhd and James Wong Hee Beng for RM18.4mn.

• Xin Synergy Group Bhd has entered into a conditional share sale and purchase agreement with Harvest Capital Development Sdn Bhd and Big Land Capital Sdn Bhd to acquire the entire equity interest in Johorbased developer Medini Marina Sdn Bhd for RM18.2mn.

• Binasat Communications Bhd has secured a contract worth RM13.3mn from Enertra Sdn Bhd to conduct civil works for the Amazon's KUL071 132 kilowatts high-voltage substation.

• Deleum Bhd's wholly-owned subsidiary Deleum Services Sdn Bhd has purchased an additional 16% stake in gas turbine supplier Turboservices Sdn Bhd from Solar Turbines International Co for RM7.3mn.

• Donald Trump was elected president, capping a remarkable comeback four years after he was voted out of the White House and ushering in a new American leadership likely to test democratic institutions at home and relations abroad.

• US mortgage rates continued to climb, putting a further damper on refinancing and homebuying activity. The contract rate on a 30-year mortgage increased eight bps to 6.81% in the week ended Nov 1, the highest since July.

• German factory orders surged 4.2% MoM in September, a positive signal for the industrial sector whose prolonged bout of weakness may be coming to an end.

Source: TA Research - 7 Nov 2024