Review & Outlook

The local market drifted lower for a third straight session on Wednesday, led by sell-offs in the healthcare sector after the government stated it is considering implementing the diagnosis-related group (DRG) system to limit private healthcare treatment charges. The FBM KLCI lost 5.77 points to close at 1,603.20, off an early high of 1,605.01 and low of 1,598.93, as losers swarmed gainers 652 to 419 on lower turnover of 2.59bn shares worth RM2.46bn.

The overnight rally on Wall Street should cushion the lacklustre local market today, but undertone remains cautious as investors await cues on China's economic policies and growth targets for next year from its Central Economic Work Conference. Immediate index resistance remains at 1,628, next 1,648, followed by the September peak of 1,675. Immediate support stays 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.

Any further dip in Velesto would be attractive for bargain hunting for potential rebound towards the 50%FR (19sen), with next hurdle seen at the 61.8%FR (22sen) and 76.4%FR (25sen). Key support levels are at the 23.6%FR (13sen) and 10sen. Meanwhile, a confirmed breakout on Wasco above the 61.8%FR (RM1.19) would enhance upside momentum for share price to target the 76.4%FR (RM1.35), with next significant hurdle being the 11/07/24 high (RM1.45). Key retracement support from the 50%FR (RM1.05) and 38.2%FR (92sen) limit downside risk.

News Bites

• Malaysia's wholesale and retail trade accelerated and rose 5.5% in October from a year earlier amid strong consumer spending during the festive season.

• Malaysia's approved investments rose by almost 11% YoY to RM254.7bn in the first nine months of 2024.

• Malaysia is on track to achieve high-income nation status between 2027 and 2029 and the 13th Malaysia Plan would be geared towards achieving this target, says Economy Minister Rafizi Ramli.

• The Ministry of Energy Transition and Water Transformation sees electricity supply demand for data centres in Malaysia increasing to 20.9GW by 2040.

• Axiata Group Bhd has signed a definitive agreement with Sinar Mas to proceed with the proposed merger of PT XL Axiata Tbk and two other companies in Indonesia for a total purchase consideration of Rp11.9trn (RM3.3bn).

• Mara Inc, the strategic investment arm of Mara Corp, and Privasia Technology Bhd are collaborating to develop a 10MW data centre in Bagan Datuk, Perak.

• MyEG Services Bhd's Zetrix blockchain platform has partnered with Astron-Xinghuo BIF to provide Chinese nationals and businesses with digital IDs and registration services for verification abroad.

• After two months of maintenance shutdown, Petron Malaysia Refining & Marketing Bhd announced that its Port Dickson refinery has resumed operations in full.

• AE Multi Holdings Bhd has proposed a RM156mn share capital reduction to offset accumulated losses, aiming to enhance its ability to declare future dividends and support growth.

• Solid Automotive Bhd is acquiring a piece of freehold agricultural land measuring 4.687 acres in Klang, Selangor, from Top Glove Corp Bhd for RM15.9mn.

• Camaroe Bhd, principally involved in the farming and processing of prawns, is seeking to list on the ACE Market of Bursa Malaysia.

• Astro Malaysia Holdings Bhd made a net profit of RM46.9mn for its 3QFY25 as opposed to a net loss of RM47.1mn incurred in 3QFY24 due to lower net financing costs.

• Eco World International Bhd has declared a final dividend of five sen per share for its FY2024 to be paid in January next year, as it managed to reduce its losses for the 4QFY24 to RM12.2mn from RM37.7mn in 4QFY23.

• Asia Development Banks sees Developing Asia, excluding Japan, Australia and New Zealand, growing 4.9% this year and 4.8% next year, slightly lower than its forecasts of 5.0% and 4.9% in September.

• The US consumer price index rose 2.7% YoY in November after increasing 2.6% in October.

• The Organization of Petroleum Exporting Countries chopped projections for consumption growth in 2024 by 210,000 barrels a day to 1.6mn barrels a day, a cut of 27% since July, according to its monthly report.

Source: TA Research - 12 Dec 2024