• Despite a volatile intraday session, the FBM KLCI (+0.1%) eked-out marginal gains yesterday on the back of buying support on selected heavyweights in the eleventh hour. The majority of the lower liners advanced, with the exception of the FBM Ace (-0.1%). The broader market also closed mostly on a positive tone – led by the Consumer Products sector.

• Market breadth, however, was negative as decliners edged the winners on a ratio of 469-to-418. Traded volumes, however, rose 5.5% to 2.3 bln shares on the back of increased foreign buying interest.

• Key index constituents that rallied on Wednesday were BAT (+RM1.0), Genting (+17.0 sen), MISC Bhd (+8.0 sen), Maybank (+5.0 sen) and Tenaga Nasional (+4.0 sen). Broader market advancers, meanwhile, include Panasonic Manufacturing Malaysia (+58.0 sen), Time dotcom (+18.0 sen), Harrisons (+15.0 sen), Bintulu Port Holdings (+12.0 sen) and Rex Industry (+12.0 sen).

• Meanwhile, plantation-related counters like United Plantations (-46.0 sen), BLD Plantation (12.0 sen) and Chin Teck Plantations (-12.0 sen) weigh on the broader market, alongside Hai-O Enterprise (-14.0 sen) and Lafarge Malaysia (-14.0 sen). Blue chip decliners were Petronas Dagangan (-12.0 sen), Sime Darby (-11.0 sen), Hong Leong Bank (-10.0 sen), Kuala Lumpur Kepong (-10.0 sen) and IHH Healthcare (-5.0 sen).

• Japanese equities advanced, taking cue from the bullish sentiment in the U.S. due to Janet Yellen’s upbeat assessment of the U.S. economy. The Nikkei (+1.0%) closed in green, despite coming down from its intraday high – after Toshiba revealed a US$6.3 bln loss in its U.S. nuclear unit. The Hang Seng Index (+1.2%) also finished on a firm note, although the Shanghai Composite index (- 0.2%) declined slightly on Wednesday’s closing bell. Meanwhile, the majority of ASEAN stockmarkets rallied amid the generally positive mood in global stockmarkets.

• Wall Street advanced to yet another new high as traders continued to bank on Donald Trump’s pro-growth policies. The Dow expanded 0.5%, boosted by Procter & Gamble (+3.7%) and Pfizer (+2.3%), while the S&P 500 advanced 0.5% – led by gains in the financial sector. The Nasdaq also notched a 0.6% gain as healthcarerelated counters rallied.

• Earlier, key benchmark European stockmarkets finished in the positive territory after the Federal Reserve Chairperson signalled a possible rate hike next month. The FTSE rallied 0.5% to close slightly above the 7,300.0 psychological level, while the DAX (+0.2%) advanced – led by gains in banking giants like Commerzbank (+2.2%) and Deutsche Bank (+2.0%). The CAC followed the general upbeat sentiment and gained 0.6% to 4,924.9 points.

The Day Ahead

• We see yesterday’s choppy trend continuing over the near term as the bouts of profit taking and rotational interest will continue to permeate the market over the near term. Although the generally mixed market environment may continue to dominate, the FBM KLCI is still poised for further upsides in tandem with the positive global stockmarket environment that will continue to provide a spillover effect to Malaysian stocks.

• At the same time, interest in Malaysian equities remain heightened and this will provide further catalyst for stocks to sustain their near term ascend, in our view.

• On the upside, the 1,710 level remains the near term resistance, followed by the 1,720 level. The 1,700 points level is still the main resistance for now.

Company Briefs

• CCM Duopharma Biotech Bhd (CCMDB) and PanGen Biotech, Inc. have completed their clinical trials for the biosimilar erythropoietin or EPO product which can be used in kidney dialysis. The product, PDA10 is expected to be launched in the Malaysia market upon receiving the marketing authorisation from National Pharmaceutical Regulatory Agency. (The Star Online)

• Heineken Malaysia Bhd’s 4Q2016 net profit stood at RM104.7 mln on the back of revenue of RM577.5 mln. There were no comparative figures for the preceding corresponding periods as the company had recently announced the change of its financial year end from 30th June to 31st December. A final single tier dividend of 60 sen per was declared. (The Star Online)

• Boustead Plantations Bhd’s 4Q2016 net profit stood at RM50.3 mln vs. a net loss of RM975,000 in the previous corresponding quarter on gains from disposal of lands and a subsidiary, as well as higher palm product prices. Revenue for the quarter rose 20.4% Y.o.Y to RM196.7 mln.

• For 2016, cumulative net profit surged 189.8% Y.o.Y to RM227.8. Revenue for the year climbed 15.1% Y.o.Y to RM707.9 mln. A fourth interim dividend of 3.5 sen per share, payable on 16th March 2017 was declared. (The Edge Daily)

• Berjaya Land Bhd (BLand) will be selling its entire 70.0% stake in Long Beach Resort Phu Quoc in Vietnam to Sulyna Hospitality Hotel Restaurant Travel Service Co Ltd for VND333.25 bln (RM65.3 mln) in cash. The remaining 30% stake is still held by Le Thi Chi Private Enterprise (25%) and Long Beach J.S. Co (5%).

• The disposal provides an opportunity for the group to realise its investment in Berjaya Long Beach Ltd Liability Co (BLong Beach) — the operator of the resort cum spa hotel. The sale will result in a RM17.2 mln gain, based on the unaudited carrying value as at 31st January 2017. BLand plans to use the proceeds for working capital of the group. The proposed disposal is expected to be completed by early 2018. (The Edge Daily)

• Gas Malaysia Bhd’s 4Q2016 net profit soared 405.0% Y.o.Y to RM51.9 mln, on higher volume of gas sold, tolling fees and assets contributed by customers. Revenue for the quarter, however, declined 10.3% Y.o.Y to RM1.05 bln.

• For 2016, cumulative net profit grew 55.6% Y.o.Y to RM165.1 mln. Revenue for the year climbed 11.9% Y.o.Y to RM4.05 bln. A second interim dividend of four sen per share, payable on 20th March 2017 was declared. (The Edge Daily)

• RCE Capital Bhd's 3QFY17 net profit gained 67.5% Y.o.Y to RM21.8 mln, on higher interest and fee income - driven by continuous growth in its consumer financing segment. Revenue for the quarter added 39.5% Y.o.Y to RM58.0 mln.

• For 9MFY17, cumulative net profit climbed 76.7% Y.o.Y to RM57.7 mln. Revenue for the period grew 40.7% Y.o.Y to RM166.1 mln. (The Edge Daily)

• Wah Seong Corp Bhd (Wasco) has acquired a Germany-based pipe coating firm, Mutares Holding-16 AG, for €19.5 mln (RM91.5 mln), to gain access to the latter's plant for pipe coating for the Nord Stream 2 Project in the Baltic Sea.

• The acquisition will enable Wasco Coatings Germany to use the existing plant and machinery in Mukran, Germany, to perform its pipe coating activities for the Nord Stream 2 Project. (The Edge Daily)

• Wong Engineering Corp Bhd plans to develop new sources of revenue by diversifying into construction, property development and trading of construction materials.

• To faciliate the proposed diversification, two new subsidiaries have been incorporated, namely WEC Construction Sdn Bhd and WEC Development Sdn Bhd, to undertake the group’s construction and property development projects respectively.

• The board anticipates that the construction and property development projects, as well as the trading of construction materials, may contribute more than 25.0% of the group’s net profit in the future. (The Edge Daily)

• Dagang NeXchange Bhd's (DNeX) indirect subsidiary, MyCall Gateway Sdn Bhd, has been appointed the service provider for the eWork Permit System. The appointment was made by Bukti Megah Sdn Bhd, which operates the onestop centre for recruitment and management of foreign workers under the purview of the home ministry.

• The contract will see DNeX providing consultancy, advice and services as the technology partner and solution provider for the eWork Permit System, for the rehiring programme of illegal foreign workers without permits from 15 countries and Bukti Megah will pay a service fee of RM30.00 to DNeX for each transaction of the eWork Permit. (The Edge Daily)  

Source: Mplus Research - 16 Feb 2017