• Tracking the general negative sentiments on Asian stockmarkets, as well as the lack of fresh buying-interest catalysts, the FBM KLCI fell 0.4% for the secondstraight day. The lower liners also tanked – dragged down by the FBM Small Cap (- 0.6%), the FBM Fledging (-0.5%) and the FBM Ace (-1.5%) indices. Meanwhile, majority of the broader market sectors closed in the red, with the exception of the plantations sector (+0.1%).

• Market breadth was insipid as underperformers dominated the winners by more than two-fold. Traded volumes narrowed by 8.9% to 1.1 bln shares as investors took a breather from the market, ahead of the U.S. GDP data report.

• More than half key index stocks retreated – including BAT (-18.0 sen), MISC (-17.0 sen), Hong Leong Financial Group (-16.0 sen), Genting (-14.0 sen) and Maybank (- 11.0 sen). Broader market losers include consumer products-related shares like Dutch Lady (-42.0 sen), Nestle (-32.0 sen) and Apollo Food (-15.0). Meanwhile, other decliners were Teck Guan Perdana (-50.0 sen) and Lafarge Malaysia (-15.0 sen).

• Notable gainers included Malaysian Pacific Industries (+19.0 sen), Hai-O (+17.0 sen), Multi-Usage Holdings (+15.0 sen), Ipmuda (+14.0 sen) and Bursa Malaysia (+10.0 sen). Plantations-related shares like Kuala Lumpur Kepong (+8.0 sen) and Hap Seng Consolidated (+2.0 sen) led the Main Board higher, followed by Maxis (+6.0 sen), Petronas Dagangan (+4.0 sen) and CIMB (+3.0 sen).

• Key regional benchmark stockmarkets finished mostly lower amid the lack of interest ahead of the Christmas break. The Nikkei fell 0.1%, weighed down by losses in Olympus (-5.1%) and Kawasaki Kisen (-3.2%), while the Hang Seng Index retraced 0.8%. The Shanghai Composite Index, however, clawed back minor gains (+0.1%) after trading mostly in the negative territory during the day. Meanwhile, most ASEAN stockmarkets were painted in red on Thursday’s close.

• Wall Street retreated despite posting better-than-expected U.S. GDP data, following losses in Apple after Nokia filed several lawsuits against the former for patent infringement. The Dow lost 0.1% to 19,918.9 points after failing to breach the 20,000 resistance level in the previous sessions, while the S&P 500 and the Nasdaq pulled back by 0.2% and 0.4% respectively.

• European shares closed broadly higher, amid thin trading before the Christmas weekend. The FTSE added 0.3% - led by gains in the consumer discretionary and healthcare related counters, while the CAC (+0.02%) flatlined. The DAX went against the general positive tone to close 0.1% lower at 11,456.1 points.

The Day Ahead

• We expect investor interest to remain on the thin side ahead of the long weekend and the continuing lack of interest will leave the Malaysian stockmarket on the mixed-to-lower path over the near term.

• This also means that the key index may retest the 1,620 level once again after it failed to climb back above the 1,630 resistance two days ago.

• We also think that the lower liners and broader market shares will endure choppy and lackluster trading interest amid the lack of fresh leads that will also accelerate the unwinding of profitable positions.

Company Briefs

• Malaysia Airports Holdings Bhd (MAHB) has filed for arbitration against three consulting firms that were involved in the KLIA2 development project, seeking claims totalling as much as RM298.0 mln plus interest. MAHB had issued notices of arbitration to KLIA Consultancy Services Sdn Bhd (KLIACS), Straits Consulting Engineers Sdn Bhd (SCE) and HSS Engineers Bhd's associate, HSS Integrated Sdn Bhd (HSSI) regarding their alleged “breaches of obligations”.

• For KLIACS, the obligations were covered under a project management consultancy agreement signed in December 2010, while the obligations for the other two were spelled out in Memoranda of Agreement inked in April 2010. The other two consultants, meanwhile, were hired to provide civil and structural consultancy services for the proposed development of the LCCT and associated services at the KL International Airport.

• On the sums sought, MAHB was claiming against KLIACS to be wholly or partly liable for its losses and damages, estimated to be RM148.9 mln as at October 2016. It is seeking an estimated RM84.3 mln from SCE as at October 2016 and an estimated RM64.6 mln from HSSI as at May 2016. KLIA2 was initially planned for completion in 2011 but the deadlines were extended several times. Operations eventually began in May 2014. (The Star Online)

• Boustead Plantations Bhd (BPB) expects to realise an estimated gain of RM527.3 mln from the sale of a 677.8 ha. freehold land in North Seberang Prai to SP Setia Bhd’s unit Setia Recreation Sdn Bhd for RM620.1 mln cash.

• This represented an upfront gain of RM777,907 per ha., which would increase BPB’s shareholders value by about 33 sen per share. The sale consideration represents a premium of RM7.1 mln or 1.2% over the market value of the lands of RM613.0 mln or RM8.4 psf accorded by an independent valuer.

• Part of the proceeds amounting to RM287.0 mln will be used to repay bank borrowings, thus reducing the group’s gearing ratio from 0.4x to 0.2x. The remainder will be funded for strategic investments and expansion in new plantation land banks at lower costs when available. (The Star Online)

• Kuala Lumpur Kepong Bhd's 740 pence (RM40.93) per share offer for MP Evans Group Plc shares has lapsed as the group only received valid acceptances for 7.4 mln shares, representing 13.2% of the issued ordinary share capital of the London Stock Exchange (LSE)-listed plantation group.

• The board of MP Evans had earlier spurned KLK’s earlier offer of 640 pence per share on 25th October 2016. (The Edge Daily)

• Managepay Systems Bhd has signed a Memorandum of Understanding (MOU) with Hong Kong-listed Credit China FinTech Holdings Ltd to collaborate on fintech solution, services and business know-how.

• The MOU is focused on online peer-topeer (P2P) financing and online micro loan, mobile and integrated point of sale (POS), and e-Money and e-Wallet businesses, including collaboration on MasterCard payment card issuance or acquisition, money remittance between Malaysia and Myanmar and China. (The Edge Daily)

• Poh Huat Resources Holdings Bhd’s 4QFY16 net profit grew 25.9% Y.o.Y to RM19.1 mln, supported by better profit margins and the strengthening of the U.S. Dollar against the Ringgit. Revenue for the quarter rose 8.0% Y.o.Y to RM152.1 mln.

• For 4QFY16, cumulative net profit added 20.1% Y.o.Y to RM47.1 mln. Revenue for the year increased 17.9% Y.o.Y to RM535.2 mln. (The Edge Daily)

• Shell Refining Co (Federation of Malaya) Bhd (SRC) has named Chinese national Wang Youde as its Non-Independent and Non-Executive Chairman following the completion of the sale of Shell Overseas Holdings Ltd’s 51.0% stake in SRC to Malaysia Hengyuan International Ltd (MHIL). Wang, who is the Chairman and General Manager of Shandong Hengyuan Petrochemical, replaces Datuk Iain John Lo, who is resigning after serving in the post since July 2012.

• At the same time, Martinus Joseph Marinus Aloysius Stalsis replacing Amir Hamzah Abu Bakar as SRC's Managing Director, while Chinese nationals Sun Jianyun and Wang Zongquan have also been appointed as Non-Independent and Non-Executive Directors of SRC. The Chinese-backed firm is launching an unconditional mandatory offer to acquire the remaining 49.0% stake in SRC at RM1.92 per share. (The Edge Daily)

• Aeon Credit Service (M) Bhd’s 3QFY17 net profit climbed 25.7% Y.o.Y to RM67.1 mln, on higher revenue and other operating income. Revenue for the quarter rose 14.1% Y.o.Y to RM280.4 mln.

• For 9MFY17, cumulative net profit grew 15.5% Y.o.Y to RM185.0 mln. Revenue for the period rose 14.7% Y.o.Y to RM811.1 mln. (The Edge Daily)

• The Employees Provident Fund (EPF) no longer owns any stake in Felda Global Ventures Holdings Bhd (FGV) as it sought to reassure members that the EPF practises high standards of corporate governance in its investments, with robust policies on risk control and asset allocation.
   
• The fund also confirmed that the RM6.5 bln loan taken by Felda Holdings Bhd is not in default. (The Edge Daily)  

Source: Mplus Research - 23 Dec 2016