• The FBM KLCI (-0.1%) failed to close higher yesterday, despite paring some of its earlier losses on the back of sellingpressure in plantations and banking heavyweights. The majority of the lower liners advanced, however, with the exception of the FBM ACE (-0.2%) index, while the broader market recovered with six out-of-ten sectors closing in the green.

• Market breadth was muted as gainers beat decliners marginally, on a ratio of 465-to-420 stocks. Traded volumes fell 5.2% to 3.22 bln shares, as investors stayed on the sidelines following the negative sentiments that spilled over from the regional equities.

• Banking-stocks like Ambank (-6.0 sen) and Maybank (-5.0 sen) declined, followed by BAT (-44.0 sen), Genting Malaysia (-15.0 sen) and Sime Darby (- 10.0 sen). Meanwhile, broader market underperformers include Allianz (-28.0 sen), Batu Kawan (-16.0 sen), Aeon Credit Service (-14.0 sen), Malaysia Airports Holdings (-10.0 sen) and QL Resources (- 10.0 sen).

• On the other side of the trade, F&B giants like Dutch Lady (+42.0 sen) and Nestle (+38.0 sen) led the broader market higher, alongside Panasonic (+40.0 sen), MSM Malaysia Holdings (+28.0 sen) and United Malacca (+23.0 sen). Key-index constituents like PPB Group (+48.0 sen), Hong Leong Financial Group (+6.0 sen), Petronas Dagangan (+4.0 sen) CIMB (+3.0 sen) and Hap Seng Consolidated (+3.0 sen) topped the outperformers list.

• Key regional benchmark stockmarkets were splashed in red, amid rising global political uncertainties as the U.K started the legal process of its divorce from the European Union. The Nikkei (-0.8%) retreated, weighed down by a stronger Yen vs. the Greenback. The Hang Seng closed 0.5% lower, while the Shanghai Composite skidded 1.0% - led by liquidity concerns in the Chinese markets and dampened property sector. Most ASEAN stockmarkets were swimming in the red at Thursday’s close.

• U.S. equities ended positively overnight, boosted by gains in financial shares amid a stronger recovery in the U.S. economy. The Dow notched a 0.3% gain as American Express (+1.2%) and Goldman Sachs (+1.2%) topped the blue-chip gauge, while the S&P 500 (+0.3%) rallied with seven-of-eleven sub-sectors in green. Meanwhile, tech-heavy Nasdaq also ended 0.3% higher, after extending its gains for the fifth consecutive session.

• Earlier, key European equities finished higher after lower-than-expected inflation data from Germany dampened prospects of an interest rate hike by the central bank. The FTSE (-0.1%), however, bucked the general trend to close in red, following a series of broker downgrades and a recovery in the Pound. The CAC rose 0.4%, lifted by gains in commodity stocks, while the DAX ended up 0.4% to 12,256.4 points.

The Day Ahead

• Once again the FBM KLCI defied expectations to close in the negative zone amid a more cautious market environment after the strong recent gains. This is also seeing the 1,750 level serving as a strong resistance for the market to clear and it appears that stronger catalysts are required to lift the key index above the aforesaid resistance.

• Nevertheless, we think there should be some near term push on the back of the window dressing activities to mark the end of 1Q2017, which is already seen as highly positive as it has gained more than 6.0% YTD. The mild gains should see the FBM KLCI retesting the 1,750 level.

• The rotational play among the lower liners and broader market shares is not ebbing and this should help to keep market breadth and depth at a reasonable level for the foreseeable future.

Company Briefs

• Yinson Holdings Bhd’s 4QFY17 net profit rose marginally by 2.0% Y.o.Y to RM51.2 mln, from RM50.1 mln last year –mainly on higher revenue, albeit partly offset by a spike in operating expenses. Revenue for the quarter jumped 60.0% Y.o.Y to RM185.5 mln vs. RM116.2 mln in the previous corresponding quarter.

• Full year net profit, however, dropped 12.0% Y.o.Y to RM197.1 mln, from RM224.7 mln in FY16, dragged down by forex losses, higher impairment loss on receivables and lower contribution from joint-ventures, although revenue expanded 28.0% Y.o.Y to RM543.3 mln, compared to RM424.4 mln last year. The group expects the oil and gas (O&G) sector to remain dampened moving forward amid challenging global economic environment and high crude oil inventories.

• The group has declared a final single-tier dividend of two sen a share, payable on a date to be decided later. This brings its total payout for FY17 to 16.6 sen, from two sen in FY16. (The Edge Daily)

• Cypark Resources Bhd’s 1QFY17 net profit rose 11.1% Y.o.Y to RM11.3 mln, from RM10.2 mln in the same period last year, in-tandem with higher revenue, which was up by 8.3% to RM78.5 mln. The stronger earnings were attributed to improved performance from the environmental engineering division.

• Berjaya Corp Bhd (BCorp) posted a 44.7% Y.o.Y jump in its 3QFY17 net profit to RM22.9 mln, from RM15.8 mln in the same period last year, due to lower tax charges, while revenue grew 2.5% Y.o.Y to RM2.22 bln, from RM2.17 bln previously.

• However, cumulative 9MFY17 net profit declined 29.6% Y.o.Y to RM136.7 mln, in comparison to RM194.2 mln recorded for 9MFY16, mainly due to lower share of contribution from Berjaya Auto Bhd after the group disposed of its 21.9% equity stake in the latter last April. (The Star Online)

• Daya Materials Bhd is disposing its offshore subsea construction vessel Siem Daya 1 (SD1) together with subsidiary, Daya Global 1 Pte Ltd for US$100.0 mln (RM442.6 mln) to Siem OCV Ptd Ltd as part of its debt restructuring exercise and is expected to receive US$82.7 mln in cash.

• The group has also signed a debtstructuring agreement with Siem Offshore Rederi AS (SORA), which will see part of its debts (RM76.3 mln) written off, leaving a total of RM83.1 mln in bonds to be paid to SORA’s shareholders, Siem Industries and Canyon Offshore Inc.

• Following the aforementioned proposals, Daya Materials expects its borrowings to be reduced by approximately RM406.9 mln, alongside lower interests and vesselrelated operating expenses and depreciation. (Bernama)

• Sedania Innovator Bhd has plans to diversify into financial technology (fintech) services, following its planned acquisition of Sedania As Salam Capital Sdn Bhd (SASC) for RM12.0 mln, from Sedania Corp Sdn Bhd (SCSB). The proposed diversification could contribute to 25.0% or more of its future net profit.

• SASC operates As-SidqTM — a Tawarruq commodity trading system that utilises prepaid telecommunication airtime credit as a traded commodity. The acquisition includes a net profit guarantee by SCSB of at least RM1.5 mln for FY17 and FY18. (The Edge Daily)

• Yong Tai Bhd’s largest shareholder, Hong Kong-listed Impression Culture Asia Ltd, has reduced its controlling stake in the company to 28.7% following the disposal of 25.0 mln shares (or 5.8% shareholding) in off-market trades on 27th March 2017.

• The sale at RM1.10 per share was made in two separate transactions to Yong Tai’s CEO, Datuk Wira Boo Kuang Loon and Executive Director Dato Sri Lee Ee Hoe. Datuk Wira Boo bought 12.2 million shares, increasing his stake by 2.8% to 13.5%, while the latter increased his total interest to 8.6% after acquiring 12.8 mln shares (or 2.9%).

• Sapura Resources Bhd slid into the red with a 4Q2017 net loss of RM2.1 mln vs. a net profit of RM3.3 mln in the same quarter last year, due to lower associates’ contribution following the disposals of its three education businesses August last year. Quarterly revenue also shed 18.0% Y.o.Y to RM13.0 mln, from RM15.9 mln a year earlier.

• The group’s 2017 net profit, however jumped to RM100.7 mln, compared to RM2.7 mln previously, boosted by a oneoff gain (approximately RM98.9 mln) on the disposals mentioned, while revenue hiked by 5.5% Yo.Y to RM50.6 mln, from RM47.9 mln last year. ? Following the divestment of its education business, future prospects of the group will be mainly be driven by two core segments - property and aviation segment. (The Edge Daily)  

Source: Mplus Research - 31 Mar 2017