• The FBM KLCI closed another 0.3% higher yesterday, after rebounding from the red in the eleventh hour amid buying-support in selected heavyweights. The lower liners continued its upward trajectory, with the FBM Small Cap (+0.5%) at its helm, while the plantations (-0.04%) sector underperformed its peers.

• Market breadth remained positive as advancers edged decliners on a ratio of 496-to-477 stocks. Traded volume s, however, slumped 23.9% to 4.58 bln shares on the back of profit-taking activities after the recent rally in the local bourse.

• Significant key-index winners were Petronas-affiliated companies like Petronas Chemicals (+13.0 sen) and Petronas Gas (+8.0 sen), followed by Genting Malaysia (+14.0 sen), Westports Holdings (+11.0 sen) and Maybank (+10.0 sen). Meanwhile, broader market gainers include F&B giants like Nestle (+RM3.22), Fraser & Neave (+70.0 sen) and Dutch Lady (+38.0 sen). Other winners were Kumpulan Perangsang Selangor (+32.0 sen) and George Kent (+36.0 sen) after the latter reported outstanding quarterly earnings.

• On the flip side, Batu Kawan (-12.0 sen), Heng Yuan Refining Company (-12.0 sen), Sam Engineering & Equipment (-11.0 sen), Iskandar Waterfront City (-9.0 sen) and Oriental Interest (-9.0 sen) underperformed. Meanwhile, bankingstocks like Public Bank (-6.0 sen) and Ambank (-4.0 sen) led the Main Board lower, followed by IHH Healthcare (-4.0 sen), Genting (-3.0 sen) and KLCC (-3.0 sen).

• Asian stockmarkets closed mixed yesterday, amid the lack of fresh catalysts to spur trading interest. The Nikkei dropped 0.3%, with only three-ofeleven counters in the green. Meanwhile, the Shanghai Composite index (+0.3%) extended its gains for the second-straight day while the Hang Seng finished 0.4% higher, as investors looked to strong quarterly corporate earnings. ASEAN stockmarkets also closed mixed on Tuesday’s close.

• U.S. stockmarkets posted sharp declines amid wavering confidence in Donald Trump’s political agenda, weakening Dollar and lower government bond yields. The Dow (-1.1%) retreated as financials and materials-related counters tanked, while the S&P 500 plunged 1.2% - it’s biggest slide since October 2016. The Nasdaq was also down by 1.8%, closing slightly below the 5800 psychological mark.

• Earlier, U.K. stocks declined as higherthan-expected inflation stoked fears of an increase in interest rated by the Bank of England. The FTSE lost 0.7%, dragged down by losses in materials-related stocks amid a stronger Pound. The CAC, meanwhile, shed 0.2%, to 5002.4 points and the DAX narrowed 0.8% on the back of losses in steel maker, Thyssenkrupp (- 2.5%) as metal prices fell.

The Day Ahead

• We continue to think that the market is overbought after its streak of gains that has stretched for five sessions and the key index climbing over 2.0%. Hence, we believe that a consolidation is already overdue and with overseas markets taking a beating overnight, we think that stocks on Bursa Malaysia could also endure a pullback over the near term.

• We also note that the pullback is healthy as it would allow the market to take a breather and for the gains to be digested after the recent strong runup. For now, we expect the 1,750 level to provide the near term support, but if it gives way, the next support is at the 1,740 level. Meanwhile, the main resistance is at 1,770 level.

• We also think that the consolidation spell will extend to the lower liners and broader market shares which will also be deemed healthy for their recent gains to be digested.

Company Briefs

• Yong Tai Bhd has inked agreements for the development of two separate property projects in Malacca with a combined gross development value (GDV) of RM2.30 bln. It acquired two pieces of land in the state totalling 4.9 ha. by purchasing 100.0% equity interest in Laila Development Sdn Bhd (LDSB), the landowner, for RM35.0 mln. Yong Tai’s unit, YTB Impression Sdn Bhd also signed an agreement with JM Bestari Land Sdn Bhd (JMBL) to jointly develop the land that was in the process of being acquired by JMBL from Chief Minister of Malacca (Inc).

• For the LDSB land, Yong Tai is eyeing a mixed development with an estimated total GDV of RM1.10 bln comprising a hotel, serviced apartments and retail units. The development plan would span five years. For the JMBL land, no indicative size and value of the project was mentioned. YTB Impression, however, has agreed to pay JMBL for the benefit and in full discharge of all entitlement of JMBL, a sum equal to 21.0% of the GDV of the joint-venture development. (The Star Online)

• Group Managing Director Darmendran a/l Kunaretnam’s plan to take over canned food and drink manufacturer Rex Industry Bhd has fallen through as his RM1.65- per-share offer attracted only 5,525 shares, or 0.01% of the issued share capital.

• The conditional mandatory takeover offer was triggered earlier in February 2017 after Darmendran and Daiman Taipan acquired a total of 4.5 mln additional shares in the company from the open market for RM7.4 mln. The acquisition increased Darmendran’s control in Rex Industry to 33.7%, which required him to extend an offer for the rest of the company’s shares. (The Star Online)

• Alam Maritim Resources Bhd has landed a RM99.0 mln contract to provide subsea inspection, maintenance and repair services to an independent oil and gas exploration and production company. The contract spans for the primary period of two years with an extension option of a year. (The Star Online)

• Ranhill Holdings Bhd warns that its wholly-owned unit, Ranhill Water Technologies Sdn Bhd (RWT) may face legal action in relation to alleged breach of contracts over failing to construct a water treatment plant in Sepang, Selangor, for WRP Asia Pacific Sdn Bhd. RWT secured two contracts from WRP in August 2015 and December 2015 to build the plant, but has stated its intention to terminate the contracts on numerous occasions due to WRP's long delay and failure to obtain regulatory approval. (The Edge Daily)

• Redtone International Bhd's 3QFY17 net loss halved to RM3.6 mln, from RM7.2 mln in the previous corresponding quarter, in the absence of goodwill impairment and losses from discontinued operations. Revenue for the quarter, however, slipped 3.2% Y.o.Y to RM37.4 mln.

• For 8MFY17, cumulative net loss stood at RM7.4 mln on the back of revenue of RM115.1 mln. There were no comparative figures as it had changed its financial year end from 31st May 2017 to 30th April 2017. (The Edge Daily)

• Mulpha International Bhd has announced a 10-to-1 share consolidation plan to improve its capital structure and reduce the trading volatility of its shares. The share consolidation plan will see its share capital reduced to 319.6 mln shares from 3.20 bln shares currently. (The Edge Daily)

• Datuk Seri Shazalli Ramly was officially named as the new Group Chief Executive Officer (CEO) of Telekom Malaysia Bhd (TM), with Datuk Bazlan Osman as Deputy CEO. Shazalli will replace the current CEO Tan Sri Zamzamzairani Mohd Isa who is retiring on 30th April 2017. Shazalli will assume his new position on 1st May 2017 and Bazlan on 1st April 2017. (The Edge Daily)

• UMW Holdings Bhd's property unit, UMW Land Sdn Bhd and the Malaysian Investment Development Authority plan to team up to develop a 348.3 ha. land in Serendah, Selangor, into a high-value manufacturing park focused on aerospace and smart manufacturing. The companies signed a Memorandum of Understanding to explore areas of collaboration and cooperation on the industrial development on UMW Land's site.

• The park, located next to an automotive manufacturing facility, would also have commercial and residential developments on the northern part of the site. The mixed development project would feature UMW Aerospace Sdn Bhd's production facility of aero-engine fan cases for Rolls-Royce Plc. (The Edge Daily)

• T7 Global Bhd's wholly-owned subsidiary, T7 Aero Sdn Bhd has signed a Heads of Agreement (HoA) with MARA Aerospace & Technologies Sdn Bhd to collaborate on aerospace-related training programmes. The HoA encompassed human capital development for metal work and highvalue manufacturing activities in the aerospace and other high-technology industries in Malaysia. (The Edge Daily)  

Source: Mplus Research - 22 Mar 2017