M+ Online Morning Market Buzz - 21 Jun 23

Dow Jones: 34,053.87 pts (-245.25pts, -0.72%)
⬆️ Resistance: 35300
⬇️ Support: 33200

FBM KLCI: 1,388.33 pts (+1.00pts, +0.07%)
⬆️ Resistance: 1420
⬇️ Support: 1350

HSI Index: 19,607.08 pts (-305.81pts, -1.54%)
⬆️ Resistance: 20600
⬇️ Support: 18900

Crude Palm Oil: RM3,738 (+RM11, +0.30%)
⬆️ Resistance: 3870
⬇️ Support: 3210

Brent Oil: $75.89 (-$0.20, -0.26%)
⬆️ Resistance: 78.70
⬇️ Support: 70.20

Gold: $1,936.42 (-$14.06, -0.72%)
⬆️ Resistance: 2020
⬇️ Support: 1890

M+ Online Technical Focus - 21 Jun 23
YTL Hospitality REIT: Recovery in tourism activities bodes well

Trading Catalyst
• Operates a wide portfolio of prime hotel properties partnering renowned international brands such as JW Marriott and Ritz-Carlton that are spread across Malaysia, Japan and Australia.
• Australia’s portfolio occupancy rate recovered to 78.7% in 2QFY23, while portion of the rental income for Malaysia and Japan properties that were deferred will be repaid progressively over 7 years.
• Recovery in tourism activities bodes well for YTLREIT, premised to the strategic hotels and resorts location.
• Technically, traders may anticipate for a potential breakout above RM0.945, targeting the next resistances at RM0.975-0.99, with long term target at RM1.05.

Technical View

(i) YTLREIT (S: RM0.905, R: RM0.975-0.99, LT TP: RM1.05, CL: RM0.90)

S: Support, R: Resistance, LT TP: Long term target price, CL: Cut loss

Source: Bloomberg, M+ Online

Market update: The FBM KLCI staged a marginal rebound on the local bourse after China’s interest rate cut to support economic growth. We believe the bargain hunting activities may sustain in the near term despite the pullback on Wall Street ahead of the US Federal Reserve Chair’s testimony to Congress as it is fairly oversold on the FBM KLCI. Nevertheless, the upside might be capped over the near term prior to the state elections that will be held in 3Q2023. Commodities wise, the Brent crude oil traded above USD75, while the CPO price remained resilient above RM3,700.

Sector focus: Given the firm crude oil and crude palm oil prices, we opine investors may focus on commodity-related sectors such as O&G and plantation stocks over the near term. We also expect some opportunities may emerge within the defensive characteristic sectors such as the telecommunication and utilities sectors following the significant selldown yesterday. Besides, we remain positive on consumer counters.

Stocks to watch:
REIT: YTLREIT, IGBREIT, SUNREIT
Financial Services: CIMB, MAYBANK, TUNEPRO
Property: OSK, IOIPG, ECOWLD
Technology: ECA, INFOM, GTRONIC
Others: L&PBHD, UCHITEC, YBS, RGB, OPTIMAX, SPTOTO

Source: M+ Online

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