KUALA LUMPUR (Jan 10): The FBM KLCI could struggle to advance on Friday as liquidation activities may persist, despite the uptrend at most global markets.
Global equities, commodities and growth-linked currencies rose on Thursday as stronger-than-expected Chinese trade data added to growing confidence about a pickup in global economic activity, according to Reuters.
However, gains in Europe's equity markets were limited as investors waited to hear what European Central Bank president Mario Draghi would say about the outlook for the recession-hit euro area after the bank's policy meeting later in the day, it said.
Maybank Investment Bank Bhd head of retail research and chief chartist Lee Cheng Hooi in a special report for The Edge Financial Daily said that after the rebound from the late September low of 1,595.85 points, the FBM KLCI had peaked at 1,679.37 on Oct 29, 2012.
He said a break of the critical 1,669 short-term support level on Nov 2 led to a plunge towards a temporary low of 1,590.67 on Nov 28. "From that 1,590.67 low, the index scaled up towards a fresh all-time high of 1,699.68 on Jan 4, 2013. Thus, the weaker support levels are seen at the 1,632, 1,679 and 1,682 levels, while the resistance levels of 1,684, 1,690 and 1,699 will offer heavy liquidation activities," said Lee.
Among the stocks that could be in focus on Bursa Malaysia are Hock Seng Lee Bhd (HSL), Tiong Nam Logistics Holdings Bhd, Patimas Computers Bhd, Top Glove Corp Bhd and Advance Synergy Bhd.
HSL has secured an infrastructure project worth RM48.86 million at the Samalaju Industrial Park in Bintulu. In a filing on Thursday, the company said it had received a letter of acceptance from Lembaga Kemajuan Bintulu on Jan 9 for the project.
Tiong Nam and Patimas were issued an unusual market activity query by Bursa Malaysia over the trading of their shares. At time of writing, Tiong Nam, in its response to the exchange, said it was not aware of the reason for the unusual market activity.
Meanwhile, Maybank IB's Lee said its featured chart sell for the week was Top Glove, as the glovemaker was expected to experience slower earnings growth momentum going forward due to its higher earnings base. Furthermore, there will be a minimum wage hike of around 29% starting from January 2013, he said.
"Glovemakers like Top Glove (which rely more on manual labour) have been on a labour reduction drive, incurring capex of RM70 million to RM80 million to improve automation levels as they plan to cut their unskilled workforce (involved in stripping, counting and stacking) by as much as 30% in 2013. In general, labour accounts for 8% to 9% of the glovemakers’ production costs," he said.
Finally, Advance Synergy Bhd’s unit Antara Holiday Villas Sdn Bhd (AHV) has entered a joint venture with TH Hotel & Residence Sdn Bhd (THHR) to jointly manage a hotel in Terengganu. In a filing with Bursa, it said AHV would hold a 70% stake in the JV while the remaining 30% would be held by THHR.