• The FBM KLCI (+0.1%) edged marginally higher yesterday as the key index retested 1,730 resistance level before profit taking activities sent the key index closing at 1,728.66 points. The lower liners – the FBM Small Cap (+0.5%), FBM Fledgling (+0.6%) and FBM ACE (+0.4%), all extended their gains, while the Industrial (-0.3%) sector underperformed the positive broader market.

• Market breadth stayed positive as advancers outnumbered decliners on a ratio of 586-to-320 stocks. Traded volume grew 12.4% to 3.39 bln shares on rotational play amongst the lower liners.

• KLK (+20.0 sen) led the key index advancers lists followed by Hong Leong Bank (+14.0 sen), PPB Group (+14.0 sen), IOI Corporation (+11.0 sen) and Telekom (+10.0 sen). Notable gainers on the broader market include Aeon Credit (+32.0 sen), Dutch Lady (+30.0 sen), Lafarge (+22.0 sen) and UMW (+16.0 sen). Hovid jumped 3.5 sen after one of its manufacturing licenses was reissued by the National Pharmaceutical Control Bureau.

• Amongst the biggest decliners on the broader market were HCK (-25.0 sen), Panasonic (-20.0 sen), Carlsberg (-12.0 sen), MBM Resources (-12.0 sen) and Teo Guan Lee (-11.0 sen). Meanwhile, Key decliners on the big board were BAT (- 30.0 sen), Petronas Gas (-22.0 sen), Genting Malaysia (-8.0 sen), Petronas Dagangan (-6.0 sen) and Sime Darby (-3.0 sen).

• Japanese equities fell for the third straight session as the Nikkei declined 0.2% due to the weakness in financial shares coupled with the appreciation of Japanese Yen against the Greenback. The Shanghai Composite extended its gains by 0.3%, boosted by the technology shares, while the Hang Seng Index added 0.4%. ASEAN stockmarkets, meanwhile, closed mostly higher.
   
• U.S. stockmarkets extended their losses as Dow fell 0.1% overnight after investors adopt a cautious stance in anticipation of a potential interest rate hike next week. On the broader market, the S&P 500 slipped 0.3%, dragged down by the weakness in healthcare sector (-0.5%), while the Nasdaq closed 0.3% lower.
   
• European benchmark indices also closed mostly lower as the FTSE and CAC fell 0.2% and 0.4% respectively ahead of the European Central Bank monetary policy meeting. The DAX however, managed to record 0.1% gain despite its manufacturing orders fell 7.4% M.o.M in January 2017.

THE DAY AHEAD

• The Malaysian stockmarket stayed firm yesterday despite the increasingly toppish market environment as rotational plays is still ongoing with market participants moving to laggards. This trend appears to be taking hold and is likely to continue over the near term as the key index attempts to fortify its position above the 1,700 points level.

• Consequently, we think the key index could revert to a sideway trend for the near term as the FBM KLCI is expected to linger within the 1,720 and 1,730 levels as it attempts to build up a firmer base. The base building efforts will be helped by the strong market following that has seen the daily traded volumes hovering above the 3.0 bln shares mark for the past week, which is encouraging as it indicates that there is strong interest in the market.

• Similarly, we see the rotational play among the lower liners and broader market shares to persist longer as retail clients continue to make a beeline into the stockmarket.

COMPANY BRIEFS

• TIME dotCom Bhd has proposed to purchase a 37.0% equity stake in Symphony Communication Public Company Ltd (SYMC) for THB1.47 bln (RM186.7 mln), into which it intends to pump in at least another RM47.0 mln on completion of the proposed acquisition.

• The conditional partial voluntary tender offer for the Thai-listed fixed line telecommunications operator translates to an acquisition price of THB12.2 per share, slightly higher than SYMC’s closing price of THB11.90 on the Thai Exchange.

• TIME is also proposing that SYMC undertake a rights offering to raise issue of about THB1.0 bln to finance SYMC’s current and future growth. The group is committed to take up its pro rata portion in accordance with its stake, with the option of increasing its stake to the maximum of 49.0% limit for foreign shareholding in SYMC. (The Star Online)

• Hap Seng Consolidated Bhd is planning to sell its wholly-owned transportation and logistics services arm, Hap Seng Logistics Sdn Bhd to Hong Kong-based LSH Logistics Ltd (LSHL) for RM75.0 mln cash. The proceeds will be used to reduce the group's borrowings and fund working capital. The original cost of investment in Hap Seng Logistics totalled some RM250.0 mln.

• The proposed disposal is deemed a related party transaction as Tan Sri Lau Cho Kun is a major shareholder of LSHL with a 37.7% stake. He is also a 56.0% major shareholder and director of Gek Poh (Holdings) Sdn Bhd, which holds a 61.4% stake in Hap Seng Consolidated. (The Edge Daily)
   
• Tenaga Nasional Bhd has inked a largescale solar power purchase agreement (PPA) with Gading Kencana Development Sdn Bhd for a 30 MWac plant in Bidor, Perak. Under the contract, Gading Kencana will design, construct, own, operate and maintain the solar photovoltaic energy generating facility.
   
• The PPA’s commercial operation date begin from 28th June, 2018 and governs the obligations of the parties to sell and purchase the energy generated by the facility for a period of 21 years from the commercial operation date. (The Star Online)

• RHB Group founder, Tan Sri Abdul Rashid Hussain is planning to take up a 6.4% shareholding in Priceworth International Bhd via the subscription of the company’s special issuance of new shares.

• To facilitate the equity participation, Priceworth raised the quantum of its planned special issuance of shares to 215.6 mln new shares (from 141.3 mln shares) to allow it to raise up to RM21.2 mln from third party investors.

• Meanwhile, Tan Sri Abdul Rashid’s wife, Puan Sri Emilahani Yang Mohd Yatim will also take up 3.6% equity interest in Priceworth. Maha Gayabina Sdn Bhd will end up with 20.0%. Priceworth has signed a conditional share subscription agreement with the trio on the 7th March, 2017.

• The special issuance is to raise capital to fund Priceworth's RM260.0 mln acquisition of a 100-year concession right to carry out harvesting, forest management and rehabilitation, and industrial tree planting within a 101,161- ha. forest reserve area in Trus Madi, Sabah. (The Star Online)

• Mesiniaga Bhd has announced that it could face a potential liability of RM8.2 mln, including court-awarded costs, if it loses the court case with Amanah Raya Bhd.

• To recap, the group was sued by the latter over a dispute on the obligations of a contract executed by both parties on 23th April, 2015 relating to the implementation of Amanahraya Integrated System with integration of solution. (The Edge Daily)

• The Employee Provident Fund (EPF) has continued to reduce its shareholding in Bursa Malaysia Bhd, after selling another 500,000 shares on 3th March, 2017, leaving it with just 26.6 mln shares (or 5.0% stake).

• EPF has been selling shares in Bursa Malaysia since early December last year, when EPF sold 6.5 mln Bursa shares (or 1.2% stake) that month. From January till now, it has offloaded another 6.94 mln shares (or 1.3%). (The Edge Daily)

• Palette Multimedia Bhd has signed a RM4.1 mln contract with Trade House Atlantis Ltd and CJSC Gollard for the sale of server and hardware related products.Palette said the deployment of server and hardware related products is expected to be completed within the next three months. (The Edge Daily)

Source: Mplus Research - 8 Mar 2017