• The FBM KLCI lost 0.3% after lingering in the negative territory for most of the day, dragged down by the weak sentiment in the key regional stockmarkets. The lower liners, however, beat the general trend to close higher with the FBM Ace (+0.6%) at its helm. The broader market was splashed in red at yesterday’s closing bell.

• Market breadth was negative as losers outweighed winners on a ratio of 480-to- 395 stocks. Traded volume slumped 16.1% to 3.29 bln shares on the back of profit-taking activities in banking heavyweights.

• Key decliners on the FBM KLCI were Petronas Dagangan (-42.0 sen), BAT (- 40.0 sen), Maybank (-10.0 sen), CIMB (- 6.0 sen) and Maxis (-6.0 sen). Amongst the biggest decliners on the broader market were Allianz (-20.0 sen), Aeon Credit (-18.0 sen), Fraser & Neave (-12.0 sen), Latitude Tree (-11.0 sen) and Carlsberg (-10.0 sen).

• Far East Holdings (+30.0 sen) took the top spot on the broader market advancers list, followed by Perusahaan Sadur Timah Malaysia (+22.0 sen), United Plantations (+20.0 sen), Ajinomoto (+16.0 sen) and SGCM (+15.0 sen). Meanwhile, IHH Healthcare (+7.0 sen), Hong Leong Bank (+6.0 sen), IJM (+5.0 sen), PPB Group (+4.0 sen) and Genting (+2.0 sen) topped the key index winners list.

• Asian equities were sluggish on Wednesday’s close as traders stayed on the sidelines, ahead of the U.S. interest rate decision and U.K. employment data. Meanwhile, Toshiba (-12.2%) weighed on the Nikkei (-0.2%) amid a potential delisting after the Japanese conglomerate delayed its quarterly earnings report. The Hang Seng also fell 0.2% to 23,792.9 points, although the Shanghai Composite index (+0.1%) ended marginally higher as the market awaits the scheduled talks between China and U.S. next month. Meanwhile, the majority of the ASEAN stockmarkets finished lower yesterday.

• Wall Street rallied overnight, following a widely expected interest rate hike by the Federal Reserve for the second time in three months. The Dow jumped 0.5% after the Fed announced its plans to maintain three rate increases this year, cooling speculations of a more aggressive monetary stance. The S&P 500 also soared 0.8%, backed by the recovery in energy stocks while the Nasdaq (+0.7%) closed marginally above the 5,900.0 psychological level.

• Earlier, European stockmarkets notched modest gains, buoyed by improvements in the crude oil prices ahead of the Dutch election results. The FTSE rose 0.2% after unemployment rate drop to a record low of 4.7%. Meanwhile, both the CAC (+0.2%) and the DAX (+0.2%) also finished on an upbeat tone as investors await the Federal Reserve’s monetary policy.

The Day Ahead

• With the Federal Reserve adopting a dovish view on future interest rate hikes, we think stocks on Bursa Malaysia will resume its near term uptrend in tandem with the positive performance on many global indices. The Fed’s view that the U.S. economy is gaining traction will also help to shore up market confidence going forward and the positive view should also permeate to Bursa Malaysia stocks for longer.

• We think the key index will retest the 1,720 level and the hurdle should be easily cleared and the FBM KLCI will make another charge at the 1,730 resistance.

• We also think the positive market undertone will renew retail players’ interest on the lower liners and broader market shares and their sustained interest will help to keep both market breadth and depth on a high.

Company Briefs

• My EG Services Bhd (MyEG) is making its first overseas foray after forming a partnership to develop and implement electronic government (e-government) service projects in the Philippines with IPay Commerce Ventures, Inc (IPCVI), a payment processing provider and a direct agent of Western Union in the Philippines.

• MyEG will have a 40.0% stake in the JV company and will invest up to US$2.0 mln (RM8.9 mln) in three tranches subject to certain milestones being achieved by the JV company. IPCVI will contribute US$400,000 (RM1.8 mln) to the venture. (The Star Online)

• Kuala Lumpur City Hall (DBKL) has appointed Ekovest Bhd’s unit as the design and build contractor for the proposed “Blue River Project” in the vicinity of the River of Life Precinct 7 – Masjid Jamek Kuala Lumpur zone.

• Ekovest estimates the project’s total contract value at RM79.0 mln, subject to finalisation of its price, specification and terms to be negotiated between DBKL and ERCSB.

• Ekovest Bhd holds a 60.0% stake in the joint-venture company that was appointed in 2011 as the project delivery partner for the River of Life project by the Government. Malaysian Resources Corp Bhd (MRCB) holds the remaining 40.0%. (The Star Online)

• TSR Capital Bhd has landed a RM119.7 mln contract to build a stretch of road linked to the Kuantan Port City, Pahang, as well as other related works. The contract was awarded by the East Coast Economic Region Development Council (ECERDC) and the jobscope entails the construction of part of the Port Link Road plus a toll plaza, trumpet interchange, and inner road and drainage diversion works under phase 2 of the Malaysia-China Kuantan Industrial Park (MCKIP).

• The project would have a construction period of 130 weeks starting from the date of site possession. (The Star Online)

• SCGM Bhd’s 3QFY17 net profit fell marginally by 1.0% Y.o.Y to RM7.0 mln, due to higher cost of production resulting from an increase in resin price, higher depreciation and higher electricity consumption. Revenue for the quarter, however, rose 23.4% Y.o.Y to RM46.0 mln.

• For 9MFY17, cumulative net profit grew 7.1% Y.o.Y to RM17.9 mln. Revenue for the period expanded 24.6% Y.o.Y to RM125.9 mln. A third interim single tier dividend of two sen per share, payable on 14th April 2017 was declared. (The Edge Daily)

• Scomi Group Bhd is forming a joint venture company with a solar power firm,Synergy Generated Sdn Bhd to bid for engineering, procurement and construction (EPC) contracts in the renewable energy sector, particularly for solar photovoltaic farms.

• The group will be the majority shareholder of this JV company with 51.0% interest, while Synergy Generated will hold the remaining 49.0%. (The Edge Daily)

• Berjaya Food Bhd’s (BFood) 3QFY17 net profit fell 36.8% Y.o.Y to RM4.7 mln, mainly due to losses incurred by Kenny Rogers Roasters chain operation as a result of weak consumer sentiment in Malaysia as well as higher write down of fixed assets arising from the closure of certain non-performing restaurants. Revenue for the quarter, however, climbed 11.0% Y.o.Y to RM163.5 mln.

• For 9MFY17, cumulative net profit fell 25.4% Y.o.Y to RM14.7 mln. Revenue for the period, however, rose 9.4% Y.o.Y to RM454.0 mln. A third interim dividend of one sen per share, payable on 28th April 2017, was declared. (The Edge Daily)

• Digistar Corporation Bhd has entered into an exclusive partnership with U.S.- based technology provider React Mobile Ltd to offer a newly developed and comprehensive security solution called Panther Mobile in the Southeast Asia market.

• The company has also entered into collaboration with Celcom Axiata Bhd to connect the company's Panther911 Central Monitoring Station (CMS) via Celcom's M2M network platform. At the same time, Celcom appointed Digistar as a partner to market Celcom's postpaid and prepaid plans as a value-added service on top of the Panther Mobile security device to deliver real-time security services nationwide. (The Edge Daily)

• Vizione Holdings Bhd Executive Director, Datuk Chai Woon Chet has resigned after just two years in the post, citing his intention to pursue other interests. Chai was appointed to the company's board of directors on 5th March 2014 and was re-designated as an Executive Director on 29th May 2015. Chai is also the Group Managing Director of XOX Bhd and Anzo Holdings Bhd and sits on the board of various other listed and private companies. (The Edge Daily)

• The validity of the letter of award to the Gamuda Bhd-led consortium chosen as project delivery partner for the RM46.0 bln Penang Transport Master Plan has been extended until 31st August 2017.

• This is second extension of the LOA by the Penang government after the previous one, announced on 29th July 2016, expired on 28th February 2017. Gamuda holds a 60.0% stake in the consortium known as SRS Consortium. Its partners are Ideal Property Development Sdn Bhd and Loh Phoy Yen Holdings Sdn Bhd, which both of which own 20.0% stakes each. (The Edge Daily)

• Trive Property Group Bhd is teaming up with China's Hubei Guang Bo New Energy Co Ltd to produce and market power generation systems. Trive has entered into a Memorandum of Understanding (MoU) with Guang Bo to collaborate in the areas of research and development, production, assembly, distribution and marketing of power generation systems including the offgrid/grid-connected wind power generation system and the wind-solar complementary power generation system.

• Under the MoU, the two companies will work together to promote and sell final products to the local market and export the balance to Organisation for Economic Co-operation and Development (OECD) and non-OECD countries. (The Edge Daily)

• Malakoff Corp Bhd’s wholly-owned subsidiary, Tanjung Bin Energy Sdn Bhd has issued RM800.0 mln worth of Sukuk Wakalah.

• Proceeds from the sukuk will be used for redemption of its outstanding junior term loan facility, totalling RM1.29 bln. The loan was in pursuant to the turnkey contract entered into in 2012 between Tanjung Bin Energy and Tanjung Bin Energy Issuer Bhd. (The Edge Daily)  

Source: Mplus Research - 16 Mar 2017