• The FBM KLCI (+0.3%) started off 2Q2017 on a firm footing after the key index halted a streak of three consecutive sessions of losses, in line with gains across major key regional indices. The lower liners also advanced, while the Industrial Products (-0.1%) and Plantations (-0.1%) sub-sectors underperformed the positive broader market.

• Market breadth turned positive as advancers outnumbered decliners on a ratio of 499-to-430 stocks. Traded volumes added 3.5% to 3.24 bln shares amid the improved market sentiment.

• More than half-of-the key index constituents advanced, led by BAT (+54.0 sen), followed by Hong Leong Financial Group (+38.0 sen), AmBank (+20.0 sen), Genting Malaysia (+11.0 sen) and Hap Seng (+11.0 sen). Significant advancers on the broader market were KESM Industries (+40.0 sen), United Plantations (+40.0 sen), JHM Consolidated (+37.0 sen) and Mieco Chipboard (+21.0 sen). Eco World International gained 8.0 sen on its debut on Bursa Malaysia.

• In contrast, Panasonic (-50.0 sen), Malaysian Pacific Industries (-12.0 sen), Time DotCom (-10.0 sen), Kumpulan H&L High-Tech (-9.5 sen) and SAM Engineering & Equipment (-8.0 sen) topped the broader market losers list. Key decliners on the FBM KLCI were Petronas Dagangan (-10.0 sen), Axiata (- 9.0 sen), Petronas Chemicals (-6.0 sen), PPB Group (-4.0 sen) and KLCC (-3.0 sen).

• Key Asian stockmarkets advanced as the Nikkei rose 0.4% on strong economic data as business confidence rose. The Hang Seng gained by 0.6%, shored up by energy and infrastructure stocks, while the Shanghai Composite was closed for the Tomb-sweeping Day holiday. ASEAN stockmarkets, meanwhile, closed mostly higher.

• Wall Street edged lower overnight as the Dow fell 0.1%, but managed to trim most of its intraday losses on weak automotive sales data. Similarly, the S&P 500 declined 0.2% with eight sectors falling into the red, while the Nasdaq closed 0.3% lower.

• Earlier, European benchmark indices – the FTSE (-0.6%), CAC (-0.7%) and DAX (- 0.5%), all closed lower on fresh terror alert after an explosion in the St Petersburg subway. Adding to the weakness was U.K.’s Purchasing Managers Index that fell to 54.2 in March – the weakest reading in eight months.

The Day Ahead

• The key index has seemingly found support at the 1,740 level after rebounding yesterday, which leads us to believe that it will continue to serve as the key near term support for the time being. However, significant upsides will continue to be elusive, in our view, as there needs to be stronger catalysts to lift the key index convincingly above the 1,750 level.

• As it is, stock and market valuations are already elevated, above their historical averages and this could continue limit the upsides for longer. Therefore, we think the FBM KLCI will continue to veer within the above levels for the time being.

• Although the key index is staying rangebound, the lower liners and broader market shares should continue to see rotational plays which will help to sustain the market’s breadth and dep on 30th June, 2017. The 51.0% remaining stake in the JV company is held by PTSC.

• The group does not foresee a significant financial impact to PTSC Asia Pacific and Yinson will continue to work together with PTSC on future developments during the transition period. (The Star Online)

• GHL Systems Bhd (GHL) is offering AliPay payment acceptance services to Malaysian in-store merchants, as well as online ones starting from April 2017. The service will start with physical merchants before end-April, before being extended to e-commerce merchants.

• AliPay is one of the largest mobile and online payment platforms globally with over 400 million users, which is part of the Alibaba Group.

• The partnership marks the second Asean country after Thailand where GHL has tied up with AliPay to offer an alternative payment option to merchants. (The Star Online)

• CCM Duopharma Biotech Bhd (CCMD) is partnering India’s Natco Pharma Limited (Natco) and Biocon Limited (Biocon) to jointly offer affordable cancer and insulin therapies in Malaysia.

• CCMD, a subsidiary of Chemical Company of Malaysia Bhd (CCM), has entered into a partnership with Natco to build Malaysia’s first High Active Potent Ingredient Drug (HAPI) manufacturing facility to produce generic oncology medicines.

• The project has been proposed for the Entry Point Project under the National Key Economic Areas by government delivery unit, PEMANDU and CCMD has earmarked a total investment of RM34.0 mln for the 15-year project.

• Separately, CCMD has also been approved by Biocon to be the reseller of human insulin in Malaysia following the award of a RM300.0 mln contract under the Ministry of Health’s Off Take programme.

• The contract to supply human insulin to all government hospitals and clinics is for a period of three years until 1st December, 2019. (The Edge Daily)

• Kelington Group Bhd has clinched two new contracts in China from a global multinational corporation (MNC) semiconductor manufacturer worth RM19.3 mln. The contracts are for the installation of an ultra-high purity gas delivery system, which is set to commence immediately and end in December 2017.

• The group has secured up to RM76.1 mln worth of new orders in 1Q2017, bringing its cumulative outstanding orderbook total to RM239.3 mln. (The Edge Daily)

• MMC Corporation Bhd will purchase the remaining 51.0% shareholding in Penang Port Sdn Bhd (PPSB) from Seaport Terminal (Johore) Sdn Bhd (STJSB), for a cash consideration of RM220.0 mln.

• The proposed acquisition will allow MMC Corp to gain full control of PPSB and be in a position to determine its future strategic direction. STJSB is a whollysubsidiary of Indra City Sdn Bhd, which is controlled by Tan Sri Syed Mohktar AlBukhary. (The Star Online)

• Marine transportation support services provider, Alam Maritim Resources Bhd has secured a RM26.1 mln contract to supply a 40-tonne utility boat for the Terengganu Crude Oil Terminal Operation in Kerteh, Malaysia.

• The project was awarded by Petronas Maritime Services Sdn Bhd, a subsidiary of MISC Bhd and is valid for four years and 211 days, subject to a one-year optional extension. (The Star Online)  

Source: Mplus Research - 4 Apr 2017