• The FBM KLCI clawed back a 0.1% gain in the eleventh hour, on the back of buying support in selected heavyweights. The FBM Ace (-0.1%) and the FBM Small Cap (-0.3%) declined, while the FBM Fledging flatlined. Meanwhile, the technology sector (+0.9%) led the broader market higher.

• Market breadth was subdued as losers overpowered advancers by a ratio of 446- to-331. Traded volumes also retreated 0.6% to 1.87 bln amid selling pressure in the lower liners.

• Significant Main Board winners were Kuala Lumpur Kepong (+10.0 sen), Genting Malaysia (+9.0 sen), IHH Healthcare (+7.0 sen), Hap Seng Consolidated (+4.0 sen) and Hong Leong Financial Group (+4.0 sen). Other frontrunners include Nestle (+58.0 sen), Shell Refining Co (+26.0 sen), United U-Li (+18.0 sen), Chin Teck Plantations (+9.0 sen) and MFCB (+9.0 sen).

• On the other side of the trade, Panasonic Manufacturing Malaysia (-40.0 sen), Aeon Credit Service (-36.0 sen), Sam Engineering & Equipment (-18.0 sen), Batu Kawan (-14.0 sen) and Apex Healthcare (-13.0 sen) declined. Keyindex underperformers were BAT (-18.0 sen) PBB Group (-16.0 sen) and Telekom Malaysia (-6.0 sen). Meanwhile, Maxis and RHB Bank gained 5.0 sen each.

• Japanese equities rallied amid a stronger Dollar, following the U.S. Federal Reserve’s hawkish stance on interest rates. The Nikkei rose 0.9%, with ten outof-eleven sectors in the green. On the contrary, the Hang Seng index and the Shanghai Composite index fell 0.2% and 0.4% respectively, weigh-down by energyrelated shares. ASEAN stockmarkets, meanwhile, rallied on Thursday’s close. ? U.S equities retreated as investors turn wary ahead of Donald Trump's Inauguration day. The Dow (-0.4%) fell for the fifth-straight day, pulled down by Exxon Mobil (-1.8%) and Merck & Co (- 1.4%). The S&P 500 finished down 0.4% as real estate counters led the index lower, while the Nasdaq ended 0.3%.

• European shares were dampened amid the European Central Bank's (ECB) decision to leave its monetary policy unchanged. The FTSE (-0.5%) was tepid, while the DAX finished flattish. The CAC also fell 0.3% - led by losses in Safran (- 5.4%) after it agreed to buy aircraft seat maker Zodiac for US$9.1 bln.

The Day Ahead

• Although the key index managed to close in the positive yesterday, market conditions are starting to look indifferent as overseas indices are also appearing to falter after their recent gains. This is leaving a fresh note of uncertainty among stocks on Bursa Malaysia as well and we think this could prompt investors to lockin their profits ahead of the Chinese New Year break next week.

• At the same time, conditions on Bursa Malaysia is also appearing toppish and a pullback could be imminent for the recent gains to be digested. Consequently, we think the pullback could leave the key index to target the near-term support at around the 1,650-1,660 levels, while the 1670 level remains the immediate upside resistance.

• We also think the lower liners and broader market shares could also see reduced followings amid the slightly overbought market conditions and profit taking activities are likely to escalate ahead of the Chinese New Year break at the end of next week.

Company Briefs

• MMC Corp Bhd is selling its 100.0% equity interest in MMC Oil & Gas Engineering Sdn Bhd, an engineering design consultancy licensed by Petroliam Nasional Bhd, for RM50.0 mln in cash to Melati Pertiwi Sdn Bhd. The proposed disposal will enable MMC group to streamline its business operations and focus on the core businesses, namely ports and logistics, energy and utilities, and engineering and construction.

• MMC Oil & Gas Engineering’s contributions to the group’s consolidated revenue and profit were minimal. The group is expected to make a one-off gain of RM16.5 mln from the proposed sale. The cash proceeds of RM50.0 mln from the disposal would be used to repay bank borrowings. The proposed disposal is expected to be completed by 1H2017. (The Star Online)

• THHE Destini Sdn Bhd, a joint venture between offshore oil and gas facility fabricator TH Heavy Engineering Bhd (THHE) and Destini Bhd, has been awarded a contract worth RM738.9 mln from the Malaysian Government to build three offshore patrol vessels, complete with fitting and accessories for the Malaysian Maritime Enforcement Agency.

• The delivery is within 42 months and would commence from the return of the letter of award and submission of performance bond and corporate guarantee to the Government. (The Star Online)

• Axis Real Estate Investment Trust (REIT) expects its total assets under management (AUM) to grow by more than 10.0% for its financial year ending 31st December 2017, contributed by the completion of Phase 1 of Axis PDI Centre and a few more acquisitions the trust is eyeing.

• The REIT’s AUM stood at RM2.19 bln as at end-2016 and the completion of the first phase of the Axis PDI Centre to increase its AUM to approximately RM2.40 bln.

• Axis REIT is also targeting to complete the acquisition of Kerry Warehouse in Pasir Gudang, Johor within 1Q2017 and is also aiming to acquire four more assets in Selangor, Pahang and Johor, with a combined asset value of RM400.0 mln. (The Edge Daily)

• Fraser & Neave Holdings Bhd (F&N) is focusing on growing its exports and to expand the soft drink and dairy product manufacturer's business. Exports represent a crucial pillar for the company and it is transforming its Malaysian operations to increase its market presence. F&N is transforming its decades-old route-to-market strategy into a combined route-to-market approach to ensure greater efficiency. (The Edge Daily)

• Ekovest Bhd’s shareholders unanimously approved the proposed disposal of the 40.0% equity interest held in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) to the Employees Provident Fund Board (EPF) for a total cash consideration of RM1.13 bln and the proposed share split in the company during the Extraordinary General Meeting (EGM) held on 19th January 2017.

• The proposed share split involves the subdivision of every two existing ordinary shares of RM0.50 each into five ordinary shares of RM0.20 each in Ekovest.

• With the disposal, a special dividend of 25 sen per share will be distributed to shareholders of Ekovest, while the remainder will be used for repayment of borrowings, exit payment, working capital and expenses for the corporate exercise. (The Edge Daily)

• Pavilion Real Estate Investment Trust (REIT) 4Q2016 net property income grew 4.1% Y.o.Y to RM77.0 mln, due to higher topline grow from its rental income from two new properties. Revenue for the quarter rose 13.5% to RM117.5 mln.

• For 2016, cumulative net property income gained 8.0% Y.o.Y to RM314.8 mln. Revenue for the year added 10.1% Y.o.Y to RM291.5 mln. A 4.08 sen distributable income, payable on 28th February 2016 was announced. (The Edge Daily)

• Ajiya Bhd’s 4QFY16 net profit rose 64.0% to RM7.1 mln due to higher operating profit. Revenue for the quarter fell 7.0% Y.o.Y to RM100.5 mln, mainly due to weaker market conditions.

• For FY16, cumulative net profit declined 14.7% Y.o.Y to RM18.7 mln. Revenue for the year slipped 7.3% Y.o.Y to RM395.3 mln. (The Edge Daily)

• UMW Oil & Gas Bhd (UMWOG) has started the consolidation among local oil and gas (O&G) players with its planned demerger from UMW Holdings Bhd (UMWH). UMWOG will in turn acquire the O&G assets of Ekuiti Nasional Bhd (Ekuinas) valued at RM721.6 mln.

• UMWH demerger with the listed O&G unit will be through a proposed 'distribution in specie' of its 55.7% stake in UMWOG back to all entitled shareholders.

• Subsequently, the group plans to progressively exit its 12 non-listed O&G assets by end FY2018 and focus on its core businesses instead. (The Edge Daily)
   
• Loss-making print and packaging solutions provider, Versatile Creative Bhd’s appointment as the main contractor to build a halal vaccine plant, pharmaceutical plant and research centre in Bandar Enstek, Negeri Sembilan, has been terminated.

• The termination of the RM308.5 mln project was made by Oriental Mace Sdn Bhd as Versatile Creative did not officially accept the offer and did not embark on the project. Hence, Oriental Mace could not grant further extension of time to complete the feasibility study. (The Edge Daily)  

Source: Mplus Research - 20 Jan 2017