TA Sector Research

Daily Market Commentary - 17 August 2023

Publish date: Thu, 17 Aug 2023, 06:06 PM

Review & Outlook

Construction, property and utility stocks continued to firm up Wednesday, as investors remained optimistic the current unity government will be able to rollout key infrastructure projects to boost domestic economic growth. The FBM KLCI added 3.23 points to end at 1,463.51, off an opening low of 1,458.37 and high of 1,464.27, as gainers edged losers 495 to 468 on steady turnover totalling 3.62bn shares worth RM2.21bn.

Given the resilient uptrend on the local stock market despite external worries over China's property and economic growth and threat of further US interest rate hikes, specific stocks in the construction, property, utility and oil & gas sectors should continue to shine and out-perform the broader market. As for the FBM KLCI, it will need to sustain strength above the 1,464 immediate resistance and 1,470 to aim for the 1,490/1,500 hurdle next. Immediate support cushioning downside is upgraded to 1,450, with the recent low of 1,433, then 1420/1,400 acting as stronger support platforms.

DNEX continues base building with downside risk limited to strong chart supports at 41sen and the 30/5/23 low (37sen), pending renewed buying momentum which is crucial to overcome overhead resistance from the 100-day ma (50sen), 200-day ma (55sen) and the 76.4%FR (59sen). Hibiscus will need breakout confirmation above the 200-day ma (99sen) to aim for the 38.2%FR (RM1.03) and 50%FR (RM1.11) ahead, while the 50-day ma (91sen) and lower Bollinger band (90sen) limit downside risk.

News Bites

  • IHH Healthcare Bhd said its unit in Turkiye, Acibadem International Healthcare GmbH was placed under member's voluntary liquidation as part of streamlining exercise, and will have no operational impact on IHH Group.
  • Malaysia Airports Holdings Bhd's wholly-owned subsidiary, Malaysia Airports (Sepang) Sdn Bhd, has terminated Pestech Technology Sdn Bhd's contract to supply, design and build an automated people mover or aerotrain at the Kuala Lumpur International Airport.
  • Scientex Bhd plans to establish electric vehicle charging stations at selected locations within its housing developments in Malaysia.
  • Hextar Technologies Bhd has agreed to terminate the deal to sell two parcels of land measuring a total of 235,213 sq ft, located in Pasir Gudang and Klang, to SWS Capital Bhd for RM23.7mn.
  • Velesto Energy Bhd's subsidiaries were awarded a USD6.1mn contract for the group's jack-up rig Velesto Naga 2 from Jadestone Energy (Malaysia) Pte Ltd and another on-demand job to provide Gait 6 hydraulic workover unit for ExxonMobil Exploration and Production Malaysia Inc.
  • Bursa Malaysia Securities Bhd has rejected Awanbiru Technology Bhd's application for an extension of time to submit its regularisation plan, leaving the latter with a possible delisting of its securities.
  • HSS Engineers Bhd is tendering for RM415mn worth of projects in the rail, road and water sectors, according to executive vice chairman Tan Sri Kuna Sittampalam.
  • LFE Corp Bhd's unit signed a deal on Wednesday to jointly develop a housing project on 175 hecatres land in Gurun, Kedah.
  • PWF Corp Bhd has proposed a bonus issue of up to 74.5mn shares on the basis of one bonus share for every three existing shares.
  • Seacera Group Bhd will no longer be a Practice Note 17 company from today.
  • The Eversendai Corp Bhd has secured RM188mn worth of new projects by its subsidiaries in the Kingdom of Saudi Arabia and India for structural steel works scope.
  • Country Heights Holdings Bhd, the property developer founded by tycoon Tan Sri Lee Kim Yew, has defaulted on the payment of Islamic term financing facilities totalling RM89.7mn provided by MBSB Bank Bhd.
  • Serba Dinamik Bhd may be delisted from the Main Market of Bursa Malaysia on Aug 28, as Bursa Securities has rejected the troubled oil and gas company's application for more time to submit its regularisation plan.
  • Fitch Ratings Ltd. said it may reconsider China's A+ sovereign credit score, adding to the growing pessimism toward the nation's financial markets.
  • China's new home prices in 70 cities, excluding state-subsidised housing, fell 0.23% last month from June, when they slipped 0.06%.
  • Federal Reserve officials at their policy meeting in July largely remained concerned that inflation would fail to recede and that further interestrate increases would be needed.
  • Eurozone economic growth eased to 0.6% YoY in 2Q23 from 1.1% YoY in 1Q23.

Source: TA Research - 17 Aug 2023

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