• 
• Despite a choppy trading session, the FBM KLCI managed to eke out some gains to extend its positive run for the second time as institutional investors were seen bargain hunting on selected index-linked heavyweights. Nevertheless, sectors on the broader market ended mostly negative, with the exception of Industrial (+0.9%), Trading/Services (+0.2%) and Plantations (+0.2%) indices, as profit taking activities were prevalent.
• Consequently, market breadth was overwhelmingly negative with losers outpacing gainers on a ratio of 719-to- 214 stocks. Traded volumes, however, extended its decline by 19.2% to 1.56 bln shares on the muted sentiments.
• MISC (+26.0 sen) led the heavyweights gainers on the FBM KLCI, followed by Tenaga (+14.0 sen), Hong Leong Bank (+10.0 sen), Genting (+6.0 sen) and Westports (+8.0 sen). On the broader market, the other major advancers were Panasonic (+30.0 sen), Shangri La (+22.0 sen), NCB (+12.0 sen), Enra (+15.0 sen) and Kawan (+13.0 sen).
• In contrast, some of the key decliners of the day include Aeon Credit (-20.0 sen), Prestariang (-18.0 sen), KESM (-15.0 sen), TAS (-13.5 sen) and MPI (-13.0 sen). Nearly half of the index-linked heavyweights fell - UMW (-13.0 sen), RHB Capital (-12.0 sen), CIMB (-8.0 sen) and Axiata (-6.0 sen) were among the main losers.
• The Shanghai Composite plunged by more than 6.0% yesterday to mark its first largest one-day percentage loss since the Chinese government removed the circuit breaker mechanism on 8th January, 2016. Other major regional indices like the Hang Seng and Nikkei Index also followed suit amid the drop in crude oil prices. ASEAN indices, meanwhile, closed mostly lower.
• U.S. stockmarkets rebounded overnight on the back of a rebound in crude oil prices. Gains on the broader market was led by energy and telecom sector. Separately, consumer confidence in January came in better-than-expected vs. December 2015.
• Most European equities also ended in the positive territory as the FTSE rose 0.6%, while the DAX and CAC closed 0.6% and 0.9% higher respectively. Some of the stocks in focus were Royal Bank of Scotland Plc, Royal Philips NV and Easyjet Plc.

THE DAY AHEAD

• After defying the weak regional stockmarkets yesterday, we think stocks on the FBM KLCI will continue to head higher over the near term amid the continuing bargain hunting activities on selected index linked stocks. The buying will also be partly prompted by the recovery among the key global stock indices overnight.
• On the upside, the 1,630 level is the immediate resistance, followed by the psychological 1,650 level. Although we think the FBM KLCI is poised to extend its uptrend with the continuing technical rebound, the overall market sentiments remains frail due to the lack of positive catalyst and increasing concerns over the state of the country’s economic prognosis that is necessitating a revision to Budget 2016 to be announced on Thursday.
• Therefore, it appears that the current recovery is merely to adjust from oversold and the downside risk remains heightened.

COMPANY BRIEFS

• Information and communications technology (ICT) distributor, ECS ICT Bhd is entering the wearable technologies market after securing the rights to distribute several smartwatches from renowned global brands, namely Apple Watch, Motorola Moto 360 and ASUS ZenWatch 2.
• The wearables segment has significant growth potential and the group will be able to provide its principals market penetration quickly, since Malaysians are receptive to these new devices. (The Edge Daily)
• Astral Asia Bhd, which saw its share price jump 25.0% to a four-year high of RM1.50, has announced a proposed bonus issue which involve 539.9 mln new shares of 20.0 sen each to reward its shareholders and a plan to revalue the company's property assets.
• This proposed bonus issue would be on the basis of nine bonus shares-for-every two existing shares held and will be effected by the capitalisation of reserves from the company's share premium, capital reserve and available-for-sale fair value reserve arising from the valuation exercise to be carried out. The entitlement date for the bonus issue will be determined and announced at a later date. (The Edge Daily)
• CWorks System Bhd has proposed to undertake a private placement to raise up to RM5.0 mln, based on an indicative issue of 41.0 sen per placement share, to be used to develop a new software system for stock maintenance.
• The proposed private placement will involve the issuance of up to 12.1 mln shares, or 10.0% of the existing issued share capital, at an issue price to be fixed and announced later. The group expects to complete the corporate exercise in 2Q2016. (The Edge Daily)
• Selangor Dredging Bhd's wholly owned unit, SDB Properties Sdn Bhd has entered into an agreement with Alam Palma Development Sdn Bhd to buy two parcels of agriculture land, located in Ulu Klang for RM67.5 mln in cash.
• The purchase price will be funded by bank borrowings and the RM450 mln gross development value project will be funded by a combination of internally generated funds and/or bank borrowings. (The Edge Daily)
• IGB Real Estate Investment Trust’s (REIT) 4Q2015 distributable income slipped 6.3% Y.o.Y to RM61.2 mln, largely on higher borrowings costs. Revenue for the quarter, however, rose 1.5% Y.o.Y to RM121.4 mln.
• For 2015, cumulative distributable income gained 8.3% Y.o.Y to RM291.0 mln. Revenue for the year added 5.9% Y.o.Y to RM489.2 mln. The company has announced a distribution per unit of 3.7 sen for 2H2015, payable on 29th February 2016. (The EdgeDaily)
• Ho Hup Construction Co Bhd plans to raise up to RM136.2 mln by issuing Rights shares and Redeemable Preference Shares (RPS) to finance its construction and property development projects on hand.
• Ho Hup said it would issue up to 85.1 mln rights shares on the basis of one rights share-for-every five existing shares held in the company. It will also issue up to 85.1 mln RPS at the same ratio.
• Each rights share or preference share subscribed would be entitled to one free detachable warrant (Warrants B and Warrants C respectively). Meanwhile, the redeemable shares would also come with a five-year tenure and a cumulative gross preferential dividend of 5.0% per annum on the issue price to be paid semi-annually on 30th June and 31st December. The corporate exercise is expected to be completed in the 2Q2016. (The Star Online)
• Karex Holdings Sdn Bhd, a wholly-owned subsidiary of Karex Bhd, has signed an asset purchase agreement to purchase certain assets from US-based TheyFit LLC worth US$1.3 mln (RM5.6 mln).
• Under the agreement, Karex will acquire certain assets comprising the intellectual property including the TheyFit trademark for the condoms manufactured, all approvals to carry on its business including the Food and Drug Administration (FDA) approvals, the websites, the distribution agreement, business information, and inventory. FitKit is a patented measurement kit which allows consumers to customize their size of condoms. (Bernama)

Source: M+ Online Research - 27 Jan 2016