• Following the renewed weakness in crude oil prices coupled with the soft economic data in China, the FBM KLCI (-0.5%) extended its losses after being traded in the negative territory for the entire trading session. The lower liners – the FBM Small Cap (-0.1%) and FBM ACE (- 0.2%), retreated, while the broader market ended in the red.

• Market breadth turned negative as decliners outpaced advancers on a ratio of 558-to-345 stocks. Traded volume, however, climbed 9.1% to 3.36 bln shares on the extended profit taking activities.

• Hong Leong Financial Group (-20.0 sen) topped the big board decliners list, followed by PPB Group (-18.0 sen), KLCC (-13.0 sen), Petronas Gas (-22.0 sen) and Public Bank (-12.0 sen). Amongst the biggest decliners on the broader market were Frasers & Neave (-22.0 sen), MPI (- 18.0 sen), Kimlun (-17.0 sen), and UMW (- 16.0 sen). JHM slipped 16.0 sen, snapping a streak of five days gains.

• Consumer products stocks like Carlsberg (+22.0 sen), Ajinomoto (+12.0 sen) and Tan Chong Motor Holdings (+12.0 sen) retain the top spot on the broader market advancers list, while Iskandar Waterfront City and Redtone climbed 12.0 sen each. Meanwhile, Hong Leong Bank (+6.0 sen), Hap Seng (+4.0 sen), Tenaga (+4.0 sen), CIMB (+1.0 sen) and Maxis (+1.0 sen) were the biggest gainers on the FBM KLCI.

• Japanese stockmarkets rebounded as the Nikkei gained 0.3% on weaker Japanese Yen against the Greenback. The Shanghai Composite and Hang Seng Index fell 0.7% and 1.2% respectively after China’s inflation rate rose 0.8% Y.o.Y in February 2017 – the slowest pace in two years. This offsets the stronger-than-expected Producer’s Price Index data that grew 7.8% Y.o.Y vs. economists’ forecast of 7.7% growth. ASEAN stockmarkets, meanwhile, closed mixed.

• U.S. stockmarkets recouped their intraday losses as the Dow (+0.01%) halted its three consecutive losing streaks ahead of the key unemployment data. On the broader market, the S&P 500 added 0.1%, led by gains in the energy sector (+0.6%), while the Nasdaq closed 0.02% higher.

• Earlier, European benchmark indices closed mostly higher as the CAC and DAX climbed 0.1% and 0.4% respectively after the European Central Bank kept its record low interest rate unchanged. The FTSE (- 0.3%), however, extended its losses for the sixth consecutive session on weakness in oil & gas and mining shares.

The Day Ahead

• With the profit taking activities emerged on the local bourse in tandem with the recent weakness in Wall Street coupled with the renewed volatility in crude oil prices, we think that the consolidation phase could persist. The earlier buying momentum appears to be tapering amid the lack of fresh catalysts and this is keeping a lid on the key index’s upsides, particularly to climb above the 1,730 resistance level.

• Consequently, we reckon that the 1,700- 1,710 levels could serve as the strong support for the time being. Bargain hunting could be thin as market players are likely to stay on the cautious side and any recovery could be limited to the 1,730 points level.

• Similarly, we think that the lower liners are likely to experience some choppiness undermined the negative market environment.

COMPANY BREIFS

• D&O Green Technologies Bhd said that although several parties have approached the company expressing interest in business opportunities as the semiconductor industry undergoes a consolidation process globally, there are only preliminary discussions and no deal has been reached currently.
• The group also said that it will make an immediate announcement to the public, upon any firm development. (The Edge Daily)

• Datasonic Group Bhd has secured a contract by the Ministry of Home Affairs to more supply passport polycarbonate data pages and personalisation services worth RM79.7 mln for the Immigration Department.

• The five-year contract worth RM284.7 mln awarded in 2013 for the supply of 10.0 mln polycarbonate passport data pages will end on 31st January, 2018.

• Including the latest award, the total quantity of passport polycarbonate data pages to be supplied along with personalisation services, has now increased to 12.8 mln, while the total contract value has risen to RM364.4 mln.

• Consequently, the contract is expected to contribute positively to the group’s FY18 earnings and net assets per share. (The Star Online)

• LBS Bina Group Bhd has proposed a renounceable rights issue in order to finance its property development projects and general working capital requirements.

• The cash call involves up to 150.6 mln redeemable convertible preference shares (RCPS) on the basis of one RCPS for every five LBS share. As at 26th February, 2017, its share capital was RM720.3 mln, comprising 650.9 mln shares.

• Assuming the indicative issue price of the RCPS is set at RM1.10 per share, the proposed exercise is expected to raise proceeds of up to RM165.7 mln. (The Star Online)

• Vizione Holdings Bhd has aborted the proposed joint-venture (JV) with Paragon Residencia Sdn Bhd to develop a residential project worth RM152.2 mln in gross development value in Seri Kembangan, Selangor, due to lower-thananticipated proceeds from a cash call that was concluded on 10th February, 2017.

• The group said that it could only allocate RM10.0 mln for the JV, from the actual proceeds raised, and not the RM24.9 mln it had expected to set aside if the maximum proceeds had been raised. The actual amount of the proceeds, however were undisclosed.

• According to Vizione’s abridged prospectus released on 9th January, 2017, the group has stated that it would participate in the proposed JV should the allocated amount for the JV be less than RM18.0 mln. (The Edge Daily)

• KESM Industries Bhd’s 2QFY17 net profit jumped 42.5% Y.o.Y to RM10.0 mln – led by higher demand for its burn-in and test services, while revenue grew 18.3% Y.o.Y to RM83.1 mln.

• Cumulative 1HFY17 net profit also increased to RM20.0 mln vs RM15.1 mln in the last corresponding period, alongside revenue which rose to RM163.2 mln, from RM140.4 mln previously. (The Edge Daily)

• Icon Offshore Bhd has clinched a longterm charter contract for its accommodation workboat Icon Valiant worth RM72.1 mln.

• The contract was awarded by SPHI Marine Sdn Bhd, a company operating in Brunei, for the chartering of its vessel to Zell Transportation Sdn Bhd.

• The 3-year contract commences on 1st March, 2017, with an option for extension of up to two years. (The Star Online)  

Source: Mplus Research - 10 Mar 2017