TA Sector Research

Daily Market Commentary - 06 September 2023

Publish date: Wed, 06 Sep 2023, 09:57 AM

Review & Outlook

Property and construction stocks dragged the broader market lower on Tuesday, as overbought conditions led to profit-taking which pulled prices off recent highs. The FBM KLCI dipped 7.89 points to close at 1,454.83, off an opening high of 1,462.58 and low of 1,452.48, as losers swarmed gainers 689 to 309 on trade totaling 4.09bn shares worth RM2.39bn.

Stocks should stay range bound for profit-taking consolidation to neutralize overbought momentum on recent strong gainers, and pending fresh leads to sustain positive sentiment. Immediate index support cushioning downside will be at 1,440, then 1,433, with stronger subsequent support at 1420/ 1,400, while overhead resistance remains at 1,464/1,470, with next tougher resistance seen at the 1,490/1,500 level.

Maxis shares need breakout confirmation above the 76.4%FR (RM4.18) to enable re-test of the 16/6/23 high (RM4.50), with next major resistance seen at the 123.6%FP (RM4.91), and key retracement support at 50%FR (RM3.78) cushioning downside. TM should see profit-taking resistance at the 61.8%FR (RM5.36) and 76.4%FR (RM5.57) capping upside potential, while downside risk is restricted to the 23.6%FR (RM4.82).

News Bites

  • The Grab-led digital bank, GX Bank Bhd has completed an operational readiness review and has been approved to commence operations effective Sept 1, 2023, by the Minister of Finance and Bank Negara.
  • A group of shareholders of KNM Group Bhd, led by new substantial shareholder German billionaire Andreas Heeschen, has initiated a hostile takeover in the loss-making and cash-strapped engineering group.
  • Axiata Group Bhd and Indonesian conglomerate PT Sinar Mas Group have revived talks that could lead to a merger of their telecommunications operations in Indonesia, according to people familiar with the matter.
  • CapitaLand Malaysia Trust will see the disposal of 3 Damansara Office Tower, which it acquired in 2015, to Lagenda Properties Bhd for RM52mn.
  • Hartalega Holdings Bhd said global demand for rubber gloves may only recover in the second half of next year at the earliest, which is still bracing for industry-wide headwinds caused by an acute oversupply.
  • Malaysian Bulk Carriers Bhd is to sell its Alam Kekal bulk carrier to Japan-based specialty financing services provider and equipment leasing group Tokyo Century Corp, for JPY4.43bn.
  • PPB Group Bhd is cautious of potential renewal of geopolitical tension between Ukraine and Russia, along with unpredictable weather conditions that could choke grain and exert an impact on the performance of the group's grains and agribusiness segment for the rest of the year.
  • Dayang Enterprise Holdings Bhd's wholly-owned unit, Dayang Enterprise Sdn Bhd has received a one-year and four-month extension to the company's topside major maintenance services contract from Sarawak Shell Bhd and Sabah Shell Petroleum Co Ltd.
  • UEM Edgenta Bhd has allocated RM100mn for its 'Sustainable ZeroCapex Program" through wholly-owned Opus Consultants.
  • Bursa Securities quizzed Lion Industries Corp Bhd on the group's proposed RM92.0mn land disposal, specifically the rationale behind the estimated RM22.2mn in expenses and the basis for valuing two land parcels spanning 26.8 acres in Kawasan Perindustrian Olak Lempit, Banting.
  • Axis Real Estate Investment Trust is suing a former tenant at Axis Steel Centre @ SiLC in Nusajaya, Johor ? namely Yongnam Engineering Sdn Bhd ? to recover outstanding rental payments amounting to RM105.4mn.
  • Pavilion Real Estate Investment Trust has inked a memorandum of understanding with five renewable companies to explore the purchase of electricity generated by solar power plant for three malls.
  • Hextar Industries Bhd is to acquire a 100% equity interest in office supplies firm Pacific Office (M) Sdn Bhd for RM16.5mn.
  • China's Caixin/S&P Global services purchasing managers' index dropped to 51.8 in August from 54.1 in July, the lowest reading since December.
  • Orders for the US manufactured goods fell a sharp 2.1% in July.
  • Consumer expectations for euro-area inflation inched up to 3.4% in July.

Source: TA Research - 6 Sept 2023

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