Review & Outlook

Last week's gains lifted short-term technical momentum into more positive territory, implying near-term upside bias for the index. However, lacking strong follow-through buying momentum and market breadth, on top of negative longer-term trend indicators suggest that selling and profit-taking interest will likely restrict upside potential. Meantime, investors likely will avoid making significant trades over this week as they anticipate the potential direction of US interest rates with the Federal Open Market Committee's upcoming meeting due to take place December 17th through 18th.

As for the index, immediate chart resistance remains at the overhead 100- day moving average at 1,629, next will be at 1,648, the 76.4%FR level, followed by the September peak of 1,675. Immediate support stays at 1,588, which is the 38.2%FR of the rally from 1,529 low (6 Aug) to 1,684 high (29 Aug), with next crucial support at 1,565, the 23.6%FR level, followed by the key 1,550 support.

On stock picks for this week, selective oil & gas and pharmaceutical related players should see returning bargain hunting interest, given their recent profit-taking corrections, while sharp rallies on key rubber glove players should encourage more selling and profit-taking to check their extreme overbought technical conditions.

News Bites

• The Council of Palm Oil Producing Countries forecasts palm oil prices could range between RM4,000 and RM5,000 per tonne in 2025, driven by stagnating production in key markets, particularly Indonesia and Malaysia.

• ITMAX System Bhd is partnering with Aim-Force Sdn Bhd to jointly develop smart parking enforcement solutions and enterprise mobility software and technologies for various projects.

• Tanco Holdings Bhd announced that its 79%-owned subsidiary, Midports Holdings Sdn Bhd, is exploring a potential collaboration with Hong Kong-listed Cosco Shipping Ports Ltd for the operation and management of MHSB's proposed "smart AI container port project" in Port Dickson, Negeri Sembilan.

• Eastern & Oriental Bhd and Japan-based real estate developer Mitsui Fudosan Group, has topped out its RM900.0mn Conlay serviced apartment in Kuala Lumpur on 6 December 2024.

• Inta Bina Group Bhd is buying a 2.72-acre freehold land in Bukit Jelutong, Selangor, for RM23.0mn cash from QL Resources Bhd's wholly-owned QL Agrifoods Sdn Bhd.

• Crescendo Corporation Bhd is disposing of a 7.43 hectare five plots of vacant land in Johor Baru for RM120.1mn to Data Cloud Innovation Sdn Bhd for the development of data centres in Johor.

• OSK Holdings Bhd's property arm, OSK Property Holdings Bhd, plans to expand its activities in Kedah with the acquisition of five parcels of plantation land totalling 330.5 acres (133.8 hectares) for RM72.0mn.

• SNS Network Technology Bhd has signed a three-year memorandum of understanding with Mimos Bhd to enhance software testing processes and drive innovation in artificial intelligence.

• Cypark Resources Bhd is partnering with the Terengganu state government to develop a 500 MW large hybrid hydro floating solar plant at Tasik Kenyir.

• The Employees Provident Fund has emerged as a substantial shareholder in KIP Real Estate Investment Trust for the first time, after acquiring a 6.1% stake in the REIT, comprising 48.5mn units.

• Kawan Food Bhd is venturing into the supply and distribution of information technology equipment via a joint venture with several individuals, including its founder cum major shareholder, and its current chairman.

• FSBM Holdings Bhd has collaborated with Synergies Intelligent Systems, Inc to jointly explore and develop the Malaysian and Southeast Asia market for consumer-to-manufacturer services for customised machining parts.

• Colform Group Bhd, a Sabah-based steel and building material specialist, has inked an underwriting agreement with Mercury Securities Sdn Bhd in conjunction with its upcoming on the ACE Market of Bursa Malaysia.

• Aluminium products manufacturer Winstar Capital Bhd's initial public offering has attracted RM413.0mn worth of interest from retail investors, nearly 21 times the RM19.8mn that it was looking to raise from the issuance of new shares via its listing.

• Made in China goods will be listed at prices 20% lower than actual sales figure when they're considered alongside products made abroad, according to a draft rule published by China's Ministry of Finance.

• The US non-farm payrolls increased by 227,000 jobs last month after rising by an upwardly revised 36,000 in October.

Source: TA Research - 9 Dec 2024