• The FBM KLCI climbed 0.5% higher on Friday, alongside a stronger Ringgit after the U.S. Central Bank decided to maintain its three rate hikes for the year. The key index also rose 1.6% higher W.o.W. All the lower liners finished in the green, while the broader market advanced, with the exception of the construction (-0.1%) and industrial (-0.3%) sectors.

• Market breadth stayed favourable as advancers outpaced decliners on a ratio of 591-to-368 stocks. Traded volume jumped 46.4% to 4.98 bln shares, as foreign investors return to the emerging stock markets, after a less hawkish Federal Reserve monetary policy sent the Dollar lower.

• Key-index chart toppers include Public Bank (+30.0 sen), Petronas Dagangan (+22.0 sen), BAT (+20.0 sen), KLCC (+20.0 sen) and Axiata (+16.0 sen). Meanwhile, Aeon Credit Service (+70.0 sen), Allianz Malaysia (+28.0 sen), Nestle (+22.0 sen), United Plantations (+20.0) and Time Dotcom (+17.0 sen) led the broader market higher.

• On the other side of the trade, broader markets decliners were Rohas Tecnic (- 23.0 sen), Malpac (-11.0 sen), Far East Holdings (-10.0 sen), Knusford (-10.0 sen) and TAHPS Group (-10.0 sen). The five decliners on the Main Board were Hap Seng Consolidated (-18.0 sen), Misc (- 11.0 sen), IHH Healthcare (-9.0 sen), Maxis (-7.0 sen) and Genting Malaysia (- 6.0 sen).

• Key regional benchmark equities were mostly down, ahead of the scheduled meeting by finance leaders in the G-20 summit. The Nikkei (-0.4%) and the Shanghai Composite index (-1.0%) declined, as sentiment turned cautious amid fears of a global trade war. The Hang Seng, however, ended 0.1% higher, on the back of gains in telecommunication services (+1.9%) and information technology (+0.6%) sectors. Meanwhile, the majority of the ASEAN stockmarkets ended in positive territory on Friday’s close.

• U.S. stockmarkets finished broadly lower, dragged down by losses in the healthcare and financial sectors. Major banks like Goldman Sachs (-1.7%) and JPMorgan Chase & Co (-1.1%) pulled the Dow (- 0.1%) lower, while the S&P 500 also fell 0.1% although the majority of its sectors closed in green. The Nasdaq flatlined, closing slightly above the 5900.0 psychological mark.

• Earlier, European equities ended positively as investors await the G-20 meeting in Germany. The FTSE eked out a 0.1% gain, boosted by Admiral (+1.9%). Meanwhile, both the CAC (+0.3%) and the DAX (+0.1%) also finished on an upbeat tone, alongside a stronger Euro currency vs. the Greenback.

THE DAY AHEAD

• Friday’s continuing strong showing was a surprise as the recent gains already largely reflected the the Federal Reserve’s interest rate decision. Nevertheless, market sentiments are still staying broadly on the positive side given the return of foreign funds to emerging market equiites and this could keep the key index still on a elevated streak.

• Over the near term, however, we think the market is already overbought and a pullback is due to adjust from overbought that could lead the key index back to around the 1,730-1,740 levels.

• We also expect the consolidation to extend to the lower liners and broader market shares as these stocks also adjust from overbought.

COMPANY BRIEFS

• The Energy Commission (EC) has revoked its earlier approval for Malakoff Corporation Bhd to undertake a 50MWac large-scale solar photovoltaic plant following a change in the proposed location. EC had also rejected the relocation of the land site as this would delay the finalisation of the solar power purchase agreement as well as the project’s scheduled commercial operations as prescribed by the EC. Under the original plan, the commercial operation is scheduled to begin on 1st July 2018 for a 21-year term.

• Malakoff had also initially proposed to undertake the project in a 51:49 joint venture with DRB-Hicom Bhd’s indirect subsidiary, DRB-Hicom Environmental Services Sdn Bhd (DHES), but the latter subsequently withdrew from the consortium. (The Star Online)

• Vizione Holdings Bhd will build 410 units of flat under the People’s Housing Project (PPR) in Lahad Datu, Sabah, for RM63.7 mln. VCSB had received a subcontract from Permata Rebana Sdn Bhd to undertake main building and associated works for the project in Mukim Sapagaya. The construction was expected to begin in 1Q2017 and be completed in 26 months.

• The source of funding would be through proceeds from a rights issue and internally generated funds. Back in February 2017, Vizione announced that it had raised gross proceeds of about RM58.3 mln from its rights issue with free attached warrants, which would be used for construction projects. (The Star Online)

• Time dotCom Bhd is adding another 1.9% to its existing 37.0% stake in Thailand’s Symphony Communication Public Co Ltd for 73.4 mln baht (RM9.3 mln). Time dotCom previously bought its 37.0% shareholding for 1.47 bln baht (RM186.7 mln). It will acquire the additional 1.9% stake from Symphony Communication's Executive Vice President for finance and accounting, Dr Bussakorn Jaruwachirathanakul. (The Edge Daily)

• Tan Chong Motor Bhd wants to run 15 dealerships in Myanmar by 2022 from three currently. Tan Chong is eyeing over 20.0% of Myanmar’s new car market share and will set up two new dealerships per year in the nation. This came as the Myanmar government announced plans to reinforce a new car import policy this year to curb used-car imports. (The Edge Daily)

• UMW Oil & Gas Corp Bhd (UMWOG) has announced that the value of two jack-up drilling contracts it secured last week from Vestigo Petroleum Sdn Bhd and Petrofac Malaysia-PM304 Ltd are US$2.0 mln (RM8.9 mln) and US$5.4 mln respectively.

• Separately, the company has, via two separate letters to Hallmark Odyssey Sdn Bhd and Tetap Kuasa Sdn Bhd, mutually agreed to extend the due diligence deadline on Icon Offshore Bhd and Orkim Sdn Bhd to 19th April 2017. In January 2017, UMWOG announced it will be acquiring a 42.3% stake in Ekuiti Nasional Bhd (Ekuinas)-controlled Icon Offshore at 50.0 sen apiece or RM248.9 mln in total, as well as a 95.5% stake in Orkim at RM12.75 per share or for RM472.7 mln. (The Edge Daily)

• QL Resources Bhd plans to sell a 62.0% stake in QL KK Properties Sdn Bhd for RM11.8 mln cash as part of its strategic review to spin-off its property play and to focus on its core business. The stake in QLKK will be sold by QL Resources’ subsidiary, QL Feedingstuffs Sdn Bhd to a related party, Ruby Techniques Sdn Bhd. The proposal is expected to be completed within three months. (The Edge Daily)

• Gabungan AQRS Bhd is selling a 5.2 ac piece of land in Selangor’s Petaling district owned by its 52.0%-owned unit Prestige Field Development Sdn Bhd to Ara Indah Development Sdn Bhd for RM34.7 mln. Proceeds of the sale will be used for working capital for its RM1.70 bln orderbook and repayment of borrowings. The group is also looking to dispose of 19.1 ac. land in Dengkil, Selangor, which is expected to materialise by the end of 1Q2017. (The Edge Daily)  

Source: Mplus Research - 20 Mar 2017