• Tracking the bullish sentiment on the regional stockmarkets, the FBM KLCI (+0.7%) extended its gains for the second-straight day. The FBM Ace (+1.2%), the FBM Fledgling (+0.7%) and the FBM Small Cap (0.6%) all rallied. Meanwhile, the broader market also finished in the positive territory, with the exception of the Mining sector (-0.8%).

• Market breadth was upbeat as winners outpaced the decliners on a ratio of 522- to-378. Traded volumes, however, declined 7.9% to 2.48 bln shares on the back of mild profit-taking activities after the recent rally.

• Main Board outperformers include BAT (+RM1.58), Petronas Dagangan (+24.0 sen), Hong Leong Financial Group (+22.0 sen), Tenaga Nasional (+16.0 sen) and Public Bank (+12.0 sen). Other advancers were Far East Holdings (+30.0 sen), Magni-Tech Industries (+17.0 sen), Knusford (+15.0 sen), Jcb Next (+13.0 sen) and Petron Malaysia Refining & Marketing (+13.0 sen).

• On the other side of the trade, consumer giants like Nestle (-42.0 sen) and Fraser & Neave (-18.0 sen) declined, followed by KESM Industries (-20.0 sen), Malaysian Pacific Industries (-14.0 sen) and Southern Acids (-12.0 sen). Meanwhile, key-index constituents losers were RHB Bank (-4.0 sen) IHH Healthcare (-2.0 sen), Astro (-1.0 sen), KLCC Property & REITs (- 1.0 sen) and Westports (-1.0 sen).

• Chinese equities advanced – buoyed by stronger-than-expected corporate earnings and positive economic data. The Shanghai Composite Index rallied 0.6% with all of its sectors closing in the green, while the Nikkei was up by 0.4% after the meeting between Donald Trump and Japan’s Prime Minister Shinzo Abe ended amicably. The Hang Seng index (+0.6%) also rallied, alongside other ASEAN stockmarkets.

• Major US stockmarkets rallied overnight, amid a stronger Dollar on optimism of an improving U.S. economy under the Trump administration. The Dow soared 0.7%, with all of its sectors advancing except the telecommunication services (-0.9%) sector. The S&P 500 (+0.5%) extended its gains for the fifth consecutive day –led by gains in financials-related stocks, while the Nasdaq (+0.5%) closed slightly above the 5760.0 psychological level.

• U.K. equities strengthened amid a recovery in global economic growth and gains in commodity companies. The FTSE rose 0.3% as miners rallied – led by Anglo American (+4.2%) and Rio Tinto (+3.0%). Meanwhile, the CAC jumped 1.2%, with the DAX expanding 0.9%, boosted by Volkswagen (+2.3%), EON (+1.8%) and Deutsche Bank (+1.8%).

The Day Ahead

• There remains no change to our near term view as we continue to think that the positive market undertone will continue to lift stocks on Bursa Malaysia. Much of the upbeat sentiment emanates from the continuing uptrend in most key global stock indices amid the pick-up in economic activities and prospects of improving corporate earnings performance.

• This has also allowed the FBM KLCI to clear a significant technical hurdle (1,700 points) and the positivity is expected to strengthen further over the near term, in our view.

• Consequently, we expect the key index to track higher and to target the 1,720 level next as both market breadth and depth are displaying renewed vigor that will be crucial in helping to lift markets.

Company Briefs

• Kawan Food Bhd’s Chairman, Gan Thiam Chai bought 3.0 mln shares on 13th February 2017 which saw its share price climbing to a fresh 52-week high of RM4.00. Gan bought the shares, representing a 1.1% stake in the company at RM3.36 each in an off-market deal, which was 59 sen below the previous day's close. Kawan Food shares rose to an intra-day high of RM4.00 before ending the day at RM3.97, up two sen. (The Star Online)

• DBE Gurney Resources Bhd will open two new HARUMi fast food restaurants in Sabah in 2017 as part of its plan to expand the local fried chicken brand across Southeast Asia, Taiwan and China. Apart from restaurant formats, the group will open 19 kiosks and two food trucks in the state. This is part of its expansion plan to establish 3,000 kiosks, 300 food trucks and 30 HARUMi restaurants across Malaysia by 2018.

• HARUMi was launched in October 2016 and has since grown to 200 kiosks and express outlets, three food trucks and three restaurants across Peninsular Malaysia. At the same time, DBE Gurney plans to set up new HARUMi restaurants in Taiwan and Chongqing, China, in 2Q2017. (The Edge Daily)

• IOI Properties Group Bhd is looking to launch property projects worth an estimated gross development value (GDV) of RM2.00 bln-RM2.50 bln in 2017 from on-going projects in Singapore, the Klang Valley, Johor and Xiamen (China). Sales contributions are now evenly spread between local and overseas markets, which are well-diversified and bodes well for the property developer as the local property market is still slowing down. (The Edge Daily)

• CSC Steel Holdings Bhd's 4Q2016 net profit sank 78.3% Y.o.Y to RM6.2 mln due to a substantial rise in production cost that was exacerbated by the rapid weakening of the Ringgit against the Greenback. Revenue for the quarter, however, grew 18.3% Y.o.Y to RM286.9 mln.

• For 2016, cumulative net profit added 25.8% Y.o.Y to RM68.7 mln. Revenue for the period rose marginally by 1.9% Y.o.Y to RM1.04 bln. A final dividend of 10 sen per share, together with a four sen special dividend was declared. (The Edge Daily)

• Ekovest Bhd has completed the sale of a 40.0% stake in the Duta-Ulu Kelang Expressway (DUKE) concession to the Employees Provident Fund Board (EPF), and will be paying a 25 sen special dividend to shareholders. Its’ shares will trade ex-dividend on 23rd February 2017, with the payout slated for 8th March 2017.

• Ekovest previously announced it was disposing of its 40.0% equity interest held in Konsortium Lebuhraya Utara-Timur (KL) Sdn Bhd (Kesturi) to the EPF for RM1.13 bln. Kesturi is the concessionaire for DUKE, a 34-km highway comprising two phases, with a concession period of 54 years. The remainder of the disposal proceeds will be used for repayment of borrowings, exit payment, working capital and expenses for the corporate exercise. (The Edge Daily)

• The Corporate Debt Restructuring Committee (CDRC) will no longer assist in the mediation between troubled steelmaker Kinsteel Bhd and its 28.4% associate Perwaja Holdings Bhd and their lenders.

• Moving forward, Kinsteel and Perwaja will negotiate a resolution of its debts directly with the lenders. The board is currently deliberating on the next course of action. (The Edge Daily)

• The seizure of PDZ Holdings Bhd's vessel PDZ Mewah will result in losses of RM90,000 to RM100,000 per month for the group. PDZ attributed the losses to the additional costs arising from purchasing slots from third party vessels.

• PDZ’s solicitors stated that they are of the view that the group has a strong arguable case to challenge the seizure and set aside the claims. (The Edge Daily)

• Multi Sports Holdings Ltd, which is going to miss another fiscal reporting due date on 14th February 2017, has received details of alleged unreported transactions and litigation involving its operating unit in China, Jinjiang Baixing Shoe Materials Ltd and the company's senior management.

• As such, the company is unable to release its outstanding annual report for the financial year ended 31st December 2015 and both quarterly results for 2Q2016 and 3Q2016. (The Edge Daily)

• Dagang NeXchange Bhd (DNeX) has been appointed as the exclusive project consultant for the road charge vehicle entry permit (RC VEP) system for the Thailand-Malaysia border and other borders with Thailand. DNeX’s 51.0%- owned subsidiary, DNeX RFID Sdn Bhd has accepted a letter of award dated 9th February 2017 from Tiffa Edi Services Co Ltd for the appointment, which entails the provision of consultancy, advice and services as the technology partner and solution provider for the project. (The Edge Daily)  

Source: Mplus Research - 14 Feb 2017