Review & Outlook

The local market fell into profit-taking correction mode on Wednesday, led by banking, property and utility heavyweights, with market sentimen dampened by the escalating tensions between Russia and Ukraine. The FBM KLCI lost 4.16 points to 1,598.18, off an high of 1,606.28 and low of 1,594.51, as losers beat gainers 546 to 457 on total turnover of 2.72bn shares worth RM2.44bn.

Persisting fears over geopolitical risk between Russia and the West and lack of positive catalysts in the local front should continue to dampen sentiment in the near term. Immediate index support remains at 1,588, the 38.2%FR of the 1,529 low (6 Aug) to 1,684 high (29 Aug) rally, with stronger key supports at 1,565, the 23.6%FR level, and then 1,550. Immediate resistance will be at 1,630, next 1,648, the 76.4%FR level, followed by the September peak of 1,675.

A confirmed breakout on SKP Resources above the upper Bollinger band (RM1.10) would enhance upside momentum for share price to target the 38.2%FR (RM1.23), with next significant hurdle being the 23.6%FR (RM1.37). Key support from the 06/08/24 low (95sen) and 76.4%FR (87sen) cushions downside risk. VSI needs breakout confirmation above the 76.4%FR (RM1.19) to boost upside momentum and target the 15/08/ 24 high (RM1.26), with stronger upside hurdle coming at the peak of 15/07/24 (RM1.33), while crucial supports from the 38.2FR% (95sen) and 23.6%FR (85sen) limit downside risk

News Bites

• Malaysia's manufacturing industry achieved capacity utilisation of 82.4% in the 3Q24, an increase of 3.0 percentage points from 3Q23, according to the Department of Statistics Malaysia.

• Malaysia on Wednesday said it has signed a pact with nine fellow Asean members to develop a carbon trading framework for the bloc.

• The Kuala Lumpur High Court has sided with Tokio Marine Life Insurance Malaysia Bhd in its dispute with RHB Bank Bhd over their bancassurance business, but also ordered it to respond to the best offer that RHB Bank receives within 14 days after receiving it from the bank.

• Eastern & Oriental Bhd has unveiled its masterplan for its Andaman Island development project, with a gross development value of RM60bn.

• Johor Corporation will be investing in a bearing manufacturing facility with Zhejiang Tianma Bearing Group Co Ltd's subsidiary, Tianma Precision Sdn Bhd, in the Tanjung Langsat Industrial Complex in Johor in a deal worth RM440mn.

• Amway (Malaysia) Holdings Bhd reported a 28.8% decline in net profit to RM32.9mn for 3QFY24 from RM46.2mn last year, as revenue fell 10.1% to RM299.8mn due to softer consumer demand for health and wellness products and home appliances.

• Petronas Chemicals Group Bhd posted a net loss of RM789.0mn for 3QFY24, reversing from a RM424.0mn net profit YoY, as forex losses tied to its investment in Pengerang Petrochemical Company Sdn Bhd impacted earnings.

• SD Guthrie Bhd, formerly Sime Darby Plantation Bhd, reported a 10% YoY increase in revenue to RM5.3bn for 3QFY24 but net profit dropped 37% YoY to RM766.0mn.

• Hextar Industries Bhd recorded a 12.6% drop in net profit to RM11.5mn for 3QFY24 from RM13.1mn a year earlier, affected by an impairment loss and higher administrative expenses.

• Sime Darby Property Bhd reported a 35% increase in revenue to RM3.3bn, while profit after tax and minority interest grew by 50% to RM413.8mn.

• Perdana Petroleum Bhd saw its net profit surged 232% YoY to RM75.8mn in the 3QFY2424 due to higher revenue from increased vessel utilisation.

• Sports Toto Bhd recorded a 31.3% drop in net profit to RM41.3mn for 1QFY25 compared to RM60.2mn a year ago, impacted by lower lottery sales, weaker sales performance, and forex losses.

• Hap Seng Plantations Holdings Bhd reported a 46.5% YoY rise in net profit to RM55.4mn for 3QFY24, supported by higher ASP and sales volume of palm products, while revenue grew 7.7% to RM177.2mn.

• MyEG Services Bhd posted a 62.6% YoY rise in net profit to RM195.1mn for 3QFY24, while revenue grew 27.8% to RM248.1mn, driven by Web 3.0 application service fees on its Zetrix blockchain platform, Zetrix token sales, and a fair value gain on its investment in HeiTech Padu Bhd.

• The People's Bank of China left its one-year and five-year loan prime rate unchanged at 3.10% and 3.6%, respectively as it monitors the impact of recent policy adjustments.

Source: TA Research - 21 Nov 2024