• Despite hovering mostly in the positive territory, the eleventh hour selling pressure sent the FBM KLCI (-0.1%) lower for the fourth straight session, in tandem the negative performance across global stockmarkets. The lower liners – the FBM Small Cap (-0.9%), FBM Fledgling (-0.4%) and FBM ACE (-0.6%), also extended their losses, while the Industrial (+0.3%), Consumer Products (+0.04%) and Plantations (+0.4%) outperformed the negative broader market.

• Market breadth stayed negative as decliners outnumbered advancers on a ratio of 586-to-363 stocks. Traded volumes, however, added 7.4% to 3.97 bln on escalating selling activities among the lower liners.

• Banking heavyweights like RHB Bank (- 16.0 sen), AmBank (-15.0 sen) Hong Leong Bank (-10.0 sen) fell, while Genting and Westports declined 17.0 sen and 8.0 sen respectively. Notable decliners on the broader market include KESM Industries (-32.0 sen), Dutch Lady (-22.0 sen), Ann Joo (-20.0 sen), Lafarge (-20.0 sen) and TAHPS Group (-20.0 sen).

• Among the biggest gainers on the boarder market were United Plantations (+34.0 sen), Sui Wah (+19.0 sen), GD Express (+12.0 sen) and Tasco (+11.0 sen). Superlon jumped 17.0 sen after reporting a strong set of quarterly earnings. BAT (+82.0 sen) topped the FBM KLCI advancers list, followed by KLK (+22.0 sen), PPB Group (+8.0 sen), Genting Malaysia (+8.0 sen) and Petronas Chemicals (+6.0 sen).

• Japanese equities tanked as the Nikkei (- 1.4%) erased all its previous session’s gains to close below the 19,000 psychological level after the Japanese Yen rose to its highest level since November 2016 against the Greenback. The Shanghai Composite slipped 0.1%, while the Hang Seng declined 0.7% on weakness in property shares. ASEAN stockmarkets, meanwhile, ended mostly lower.

• U.S. stockmarkets extended their losses as investors assess the impact of health bill vote rejection to could lead to further scrutiny of other President Donald Trump’s agendas. The Dow fell 0.2% to record its eight straight day of losing streak, albeit it managed to trim most of its intraday losses. Similarly, the S&P 500 closed 0.1% lower, dragged down by weakness in the telecommunications (- 0.7%) sector.

• Key European stockmarkets - the FTSE (- 0.6%), CAC (-0.1%) and DAX (-0.6%) all ended lower. Notable decliners were banking shares like Lloyds Banking Group PLC (-1.6%), UG Group AG (-0.6%) and Societe Generale (-0.4%). Meanwhile, Germany’s Ifo Business Climate rose to 112.3 in February 2017 – above economists’ forecast of 111.

The Day Ahead

• There is no change to our view and we think the intermediate market environment will remain broadly mixedto-lower in tandem with the rising uncertainties in overseas indices.

• As it is, the recent gains have more than reflected the mildly positive economic environment and have left stock valuations stretched, thus providing few fresh impetuses for further market gains.

• We also think that the consolidation on Bursa Malaysia is likely to persist after the key index failed to clear the 1,750 resistance level, which is proving to be a formidable level to clear. At the same time, the downside pressure is also light for now, thereby limiting the selling and we expect the key index to linger within the 1,740 and 1,750 levels for the time being.

Company Briefs

• CIMB Group Holdings Bhd is targeting to launch its planned 50:50 strategic partnership in the stockbroking business with China Galaxy International Financial Holdings Ltd (CGIF) officially by 2Q2017. The latter’s parent company, China Galaxy Securities Co Ltd had passed the resolutions related to the proposed partnership through the Shanghai Stock Exchange and the Stock Exchange of Hong Kong on 24th March, 2017.

• According to a heads of terms signed in October, CIMB and China Galaxy Securities would explore a strategic partnership in the stockbroking business comprising institutional and retail brokerage, equities research, and associated securities businesses, as well as to identify further areas of cooperation in markets where they operate. (The Star Online)

• IHH Healthcare Bhd's indirect unit, M&P Investments Pte Ltd has secured a business licence for the incorporation of a 60.0%-owned subsidiary in Nanjing, China.

• The licence issued to M&P Investments by the Chinese authorities for the incorporation of ParkwayHealth Zifeng Nanjing OBGYN Hospital Co Ltd is valid until 20th March, 2037.

• Jiangsu Zifeng Healthcare Co Ltd owns the remaining 40.0% shareholding in ParkwayHealth Zifeng Nanjing and the company will be mainly involved in the management and operation of medical and health related facilities and services. (The Edge Daily)

• Petronas Carigali Sdn Bhd (PCSB) has awarded Perdana Petroleum Bhd a threeyear umbrella contract for the provision of spot charter marine vessel service from 15th March 2017 until 14th March 2020.The contract also comes with a two-year extension option.

• The project includes the provision of anchor handling tug or supply vessel bollard pull (both below and over 100 metric tonnes), workboat as well as workbarge, while the contract's total value will depend on the actual number of days the vessels are on hire throughout the contract period. (The Edge Daily)

• Teck Guan Perdana Bhd's 4Q2017 net profit more than doubled to RM1.3 mln, from RM637,000 last year – led by improved palm oil price and volume, while revenue also rose more than twofold to RM87.8 mln, from RM41.8 mln in 4Q2016.

• In 2016, Teck Guan's net profit rose 44.4% Y.o.Y to RM12.0 mln, compared to RM8.3 mln in the previous corresponding year, while full year revenue stood at RM377.3 mln, up 79.2% Y.o.Y from RM210.6 mln a year ago. (The Edge Daily)

• MyNews.com chain operator Bison Consolidated Bhd's 1QFY17 net profit rose 10.2% Y.o.Y to RM6.4 mln, from RM5.8 mln in 1QFY16, in-tandem with higher revenue which gained 23.5% Y.o.Y to RM76.2 mln, from RM61.7 mln. The improved revenue was contributed by sales from new stores, improved merchandise mix and promotional activities.

• Merchandise sales grew by 21.0% to RM65.3 mln, while complementary income jumped 37.0% to RM10.9 mln in the 1QFY16. Meanwhile, operating expenses grew 27.0% to RM19.1 mln, from RM15.1 mln quarter under review. (The Edge Daily)

• Scomi Group Bhd has signed a power purchase agreement (PPA) with Tenaga Nasional Bhd (TNB) to develop a 30MW ac large-scale solar photovoltaic (PV) power plant in Bandar Sungai Petani, Kedah, on a build-own-operate basis. Scomi’s 30.0%-owned special purpose vehicle, Strong Elegance Sdn Bhd is expected to undertake the construction of the plant. Meanwhile, the remaining stakeholding in Strong Elegance is held by Synergy Generated Sdn Bhd (40%) and Lembaga Tabung Angkata Tentera (30%).

• The PPA, which is slated for commencement on the 31st December 2018 is valid for a period of 21 years from the commercial operation date in accordance with the agreed terms and conditions. (The Edge Daily)

• Top Glove Corp Bhd is partnering Japanese firm Fimatec Ltd, to venture into the manufacturing of rubber reinforcing agent. The 70:30 JV aims to reduce the overall glove production cost, improve glove quality and production efficiency through the supply of good and consistent quality of rubber reinforcing agent.

• A JV company, TG FMT Sdn Bhd, will commence operations by the 1Q2018 and Top Glove will subscribe up to RM4.2 mln of the JV’s paid-up capital, and Fimatec will subscribe for up to RM1.8 mln. Both parties' subscriptions will be executed in stages. (The Star Online)

• BCB Bhd is purchasing six adjoining plots of agriculture land, measuring a combined 18.9 ha. in Batu Pahat, Johor for RM34.6 mln. The acquisition will facilitate the development of a residential project (with an estimated GDV of RM360.0 mln) comprising of 400 residential units which includes bungalows, semi-Ds and terrace houses.

• The property developer is buying the freehold plots from two Singaporeans and will finance the purchase by a combination of internal funds and borrowings. (The Edge Daily)  

Source: Mplus Research - 28 Mar 2017