• Despite the weakness on Wall Street overnight, coupled with weaker crude oil prices, the eleventh hour buying support amongst selective index heavyweights sent the FBM KLCI 0.3% higher yesterday. The lower liners also trended mostly higher as the FBM Fledgling and FBM ACE added 0.2% and 1.8% respectively, while Industrial Products (-0.3%) sector underperformed positive the broader market.

• Market breadth turned positive as gainers pipped losers on a ratio of 414-to-368 stocks. Traded volumes jumped 48.7% to 2.68 bln shares on rotational play amongst the lower liners.

• On the big board, BAT (+86.0 sen), PPB Group (+30.0 sen), Maxis (+17.0 sen), Hong Leong Financial Group (+14.0 sen) and Hap Seng (+15.0 sen) were amongst the biggest advancers. Significant gainers on the broader market were Panasonic (+42.0 sen), LPI Capital (+24.0 sen), Aeon Credit (+20.0 sen) and Lafarge (+19.0 sen). HLT Global jumped 9.5 sen on its debut on Bursa Malaysia.

• Amongst the biggest decliners on the broader market include Shell (-12.0 sen), TAHPS Group (-10.0 sen), Advanced Packaging (-9.0 sen) and Pharmaniaga (- 9.0 sen). Hovid slumped 4.5 sen after its manufacturing licenses were revoked by the Health Ministry. Meanwhile, Petronas Gas (-42.0 sen), Tenaga (-12.0 sen), Petronas Chemicals (-3.0 sen), Astro (-2.0 sen) and YTL (-1.0 sen) topped the big board decliners list.

• Japanese equities ended lower yesterday as the Nikkei fell 0.8% on weakness in banking and insurance stocks. The Shanghai Composite declined 0.2% after the inflation rate in December 2016 eased to 2.1%, but the Hang Seng Index added 0.8% to close at one-month high after commodity prices rallied. ASEAN stockmarkets, meanwhile, ended mixed. ? U.S. stockmarkets extended their losses overnight as the Dow erased all its intraday gains to close 0.2% lower overnight ahead of the President-elect’s news conference. On the broader market, the S&P 500 closed unchanged after giving up all its intraday gains, curbed by the weakness in the real estate sector (- 1.3%).

• Key European benchmark indices, however, closed mostly higher – the FTSE (+0.5%), CAC (+0.01%) and DAX (+0.1%), all advanced. The former hit a new intraday high of 7,284.7 pts, buoyed by gains in mining stocks coupled with the weakness in British Pound against the US Dollar.

The Day Ahead

• The underlining buying interest among Bursa Malaysia stocks remained firm despite the weakness on overseas markets as institutional investors choose to chase up index linked stocks, continuing the trend that started late last year.

• The sustained gains are leaving the market undertone on the positive side and with market breadth continuing to display strength, the upsides are expected to sustain over the near term, despite the technical indicators approaching overbought. Any consolidation is expected to be mild and short as there is still latent buying interest.

• On the upside, the key index could target the 1,680 level, while the 1,650 level remains the key support for now. We are also encouraged by the strong following on the lower liners and broader market shares of late and we anticipate this trend to continue over the near term as the rotational play looks to continue amid the calmer market conditions.

Company Briefs

• Omesti Bhd will continue its partnership with global digital court recording systems provider,Justice AV Solutions (JAVS), which forms an integral component of its eCOURTS platform.

• As a JAVS authorised dealer, Omesti offers JAVS Premier, Select and Core Lines to its customers in Asia and has been given exclusive distribution rights in 10 countries, including Malaysia, Thailand, Laos, Cambodia, Vietnam, Indonesia, Philippines, Brunei, East Timor and Sri Lanka. (The Edge Daily)

• Tasco Bhd will venture into cold chain logistics after signing a sale and purchase agreement with Chang Kok Fai and Chan Sun Cheong to buy Gold Cold Transport Sdn Bhd for up to RM188.0 mln.

• The group has financed the initial deposit of for the purchase of about RM3.7 mln via internal funds and will pay the remainder via borrowings and/or advances from its holding company Yusen Logistics Co Ltd, although the exact quantum has not been determined.

• Tasco said its venture into cold chain logistics is a natural step forward given the group's involvement in traditional ambient warehousing and its vast experience in fast moving consumer goods and retail industries. (The Star Online)

• IFCA MSC Bhd has been issued an Unusual Market Activity (UMA) query by Bursa Malaysia after its share price rose sharply by 34.6% on 10th January.

• Prior to the sharp increase yesterday, the counter has been on a declining trend since late September and hit an intra-day low of 23.0 sen on 30th November 2016. (The Edge Daily)
   
• Muhibbah Engineering (M) Bhd’s 49.0%- owned unit, Muhibbah Engineering Middle East LLC has clinched a contract worth Qatari Riyal 356.7 mln (RM438.1 mln) for the construction of roads and infrastructure works at Um Alhoul Economic Zone (QEZ-3) Phase 2.1 (Portion 2A, Marine Cluster), Qatar from the Economic Zones Company of Qatar (MANATEQ)
   
• The project will begin immediately and is slated for completion by 2Q2018. (The Star Online)
   
• Paramount Corp Bhd has requested the suspension of its share trading activities today, ahead of a material announcement. The announcement was made after The Edge Weekly reported that Paramount could be selling its education arm's assets to a private real estate investment trust (REIT) as part of its asset-light strategy.

• It was also revealed that the private REIT has obtained a local pension fund as its cornerstone investor. (The Star Online)

• Versatile Creative Bhd has inked a Memorandum of Understanding (MoU) with Double Action Ventures Sdn Bhd for the development of medium-cost apartments on a 3.2 ac. piece of alienated land in Johor Bahru. The gross development value of the project is estimated to be around RM110.0 mln.

• Moving forward, the group expects a definitive agreement between the parties to be drawn up within the next four months subject to the commercial viability of the project. (The Edge Daily)

• Malaysia Airports Holdings Bhd’s (MAHB) and Telekom Malaysia Bhd have entered into a MoU for the development of integrated telecommunications, ICT and smart services for the KLIA Aeropolis project.

• Both parties will be working together to strengthen the existing telecommunication and ICT infrastructure at KLIA Aeropolis and also explore ways to incorporate smart services through the provisioning of Internet of Things (IoT) enabled smart services. (The Edge Daily)  

Source: Mplus Research - 11 Jan 2017