• Despite hovering mostly in the negative territory, last-minute buying support from selective index heavyweights sent the FBM KLCI 0.1% higher yesterday. The lower liners – the FBM Small Cap (+0.9%), FBM Fledgling (+0.7%) and FBM ACE (+1.4%), all advanced, while the Industrial (-0.1%) and Consumer Products (-0.1%) sectors underperformed in the mostly positive broader market.

• Market breadth remained positive as advancers outpaced decliners on a ratio of 533-to-384 stocks. Traded volumes climbed 22.8% to 3.97 bln shares on rotational play amongst the lower liners.

• Hong Leong Bank (+24.0 sen) topped the big board advancers list, followed by KLK (+22.0 sen), Petronas Dagangan (+12.0 sen), Petronas Chemicals (+11.0 sen) and Westports (+10.0 sen). GHL System (+34.0 sen) hit limit up after partnering with AliPay payment acceptance services, while other notable gainers of the day include KESM Industries (+28.0 sen), George Kent (+28.0 sen), CAB Cakaran (+20.0 sen) and JHM Consolidated (+18.0 sen).

• Among the biggest decliners on the broader market were United Plantations (-40.0 sen), Frasers & Neave (-32.0 sen), MSM (-14.0 sen), Chin Teck Plantations (- 11.0 sen) and Pentamaster (-11.0 sen). Meanwhile, Hap Seng (-10.0 sen), Maxis (-4.0 sen), Genting Malaysia (-4.0 sen), Tenaga (-2.0 sen) and Petronas Gas (-2.0 sen) were the key index’s biggest decliners.

• Japanese equities retreated yesterday as the Nikkei (-0.9%) erased all its previous session gains to close at its lowest level in ten weeks on the appreciation of Japanese Yen against the Greenback. Both the Hang Seng and the Shanghai Composite were closed for the Tombsweeping Day holiday and will only resume trading today. ASEAN stockmarkets, meanwhile, closed mixed.

• U.S. stockmarkets rebounded overnight, lifted by gains in energy shares after crude oil prices rallied on expectations over a drawdown in weekly inventories. The Dow added 0.2%, while the S&P 500 gained 0.1%. Meanwhile, factory orders for February 2017 rose 1.0% Y.o.Y - in line with economists’ estimates.

• Earlier, European benchmark indices – the FTSE (+0.5%), CAC (+0.3%) and DAX (+0.2%), all ended higher, lifted by mining and oil & gas shares like BP PLC (+1.7%), Royal Dutch Shell PLC (+1.0%), Fresnillo PLC (+2.8%) and Randgold Resources Ltd (+1.6%). Eurozone’s retail sales rose 0.7% Y.o.Y in February 2017, beating economists’ forecasts of a 0.5% Y.o.Y growth.

The Day Ahead

• The rangebound trend appears to take hold for now and we think the trend is likely to persist over the near term as market players continue to take shortterm positions and undertake rotational plays. This is likely to keep market breadth and depth on a firm level and will at the very least provide ample market support for the key index to stay firmly above the 1,730 level for now.

• The positive closing in key global stock indices overnight, coupled with the recovering oil prices could tip the key index higher for the day. Still, we think the upsides could be measured amid the elevated stock and market valuations, hence we expect the FBM KLCI to linger within the 1,740 and 1,750 levels over the near term.

• As usual, the rotational plays among the lower liners and broader market shares will continue with retail players still largely in a trading mode.

Company Briefs

• Mudajaya Group Bhd’s 26.0%-owned associate company, RKM Powergen Pvt Ltd has begun selling 200 megawatt (MW) of electricity to several power distribution companies in Uttar Pradesh from 3th April 2017. The electricity sale is in accordance to the power purchase agreement that the company had inked with Uttar Pradesh Power Corp Ltd in March last year.

• Meanwhile, the balance 150MW of electricity will only be sold based on approval from Uttar Pradesh Power, subsequent to the completion of Champa-Kurukshetra 800 kV HCDC pole and 765 kV Jaipur-Bhiwani transmission line which was commissioned on 27th March 2017.

• To recap, Mudajaya had signed an agreement in 2007, with RK Powergen Pvt Ltd — the 74.0%-owner of RKM Powergen — to develop four units of 360MW coal-fired thermal power plant in India.

• Separately, the group has also secured a RM58.3 mln contract to build part of Line Three of the Light Rail Transit (LRT 3) from Prasarana Malaysia. The deal is for Package PC2 of the LRT 3 line from Bandar Utama in Petaling Jaya to Johan Setia and is expected to commence from the 2Q2017 for completion in end-2019. (The Star Online)

• Voir Holdings Bhd is proposing to raise between RM7.9 mln and RM11.5 mln via a private placement to fund its construction projects and for working capital.

• The bulk of the proceeds (between RM5.1 mln to RM7.6 mln) will be used to finance its RM25.4 mln, 1,000-unit apartment development under the Program Perumahan Rakyat apartment in Kota Setar, Kelantan.

• Although the issue price and potential investors have yet to be determined, the proposed private placement will involve the issuance of up to 19.2 mln shares, representing 10.0% of the group's issued share capital. Subsequently, the group's share capital will be enlarged to between RM73.9 mln and RM107.52 mln, from RM66.0 mln currently. (The Edge Daily)

• Suria Capital Holdings Bhd has signed a Memorandum of Understanding (MoU) with Taiwan International Ports Corp Ltd to explore the opportunities for business cooperation between them.

• One of the programmes identified for collaboration is implementing growth strategies for substantially enhancing bilateral ports operation performance. The three-year MoU is effective from 13th April 2017. (The Edge Daily)

• Construction and property developer Malaysian Resources Corp Bhd (MRCB) has entered into a non-binding Memorandum of Understanding (MoU) with Adani Realty, a unit of the Adani Group to develop multiple convention centres in India.

• Adani Realty is involved in the development of residential, commercial and social club projects and would complement MRCB's strong expertise in transit-oriented developments to leverage on the tremendous opportunities in India. The six-month MoU may be terminated at any time by mutual consent. (The Edge Daily)

• Metal roofing and safety glass maker Ajiya Bhd saw a deviation of over 22.0% (RM4.2 mln) between its unaudited and audited profit after taxation and minority interest (PATAMI) for the financial year ended 30th November 2016.

• Ajiya posted a PATAMI of RM18.7 mln in the unaudited financial statements for FY16, compared with a Patami of RM14.5 mln in the audited one.

• The variance was mainly due to dividend to minority shareholders of a subsidiary company amounting to RM2.9 mln, which was not added to the amount attributable to minority interest at group level.

• The group also did not take into account additional bad debts, foreign exchange loss and other administrative expenses amounting to RM1.0 mln in the unaudited financial statement. (The Edge Daily)

• Icon Offshore Bhd has secured an RM8.0 mln contract to provide a platform supply vessel to Halliburton Energy Services (M) Sdn Bhd for up to nine months. (The Star Online)

• Sasbadi Holdings Bhd has clinched three contracts from the Ministry of Education to publish and supply Mathematics, Arts Education and Chinese Language textbooks for a collective value of RM6.8 mln.

• The textbooks will be supplied to Year 2 students at Chinese national-type primary schools throughout the country for about three years, starting from 31st March 2017 until 31st December 2019.

• The contracts to supply mathematics and art education is worth RM3.0 mln and RM763,070 respectively and will be supplied by Sasbadi’s wholly-owned unit Sasbadi Sdn Bhd.

• Meanwhile, the Chinese Language texbook contract worth RM3.1 mln will be supplied by The Malay Press, in which Sasbadi has a 70.0% indirect stake. (The Edge Daily)

• NetX Holdings Bhd‘s wholly-owned subsidiary, Ariantec Sdn Bhd has inked a licensing agreement with Payallz International Ltd to license four electronic payment products that will be based on a 50:50 revenue-sharing model.

• The four products to be licensed are AllZ mPOS, AllZ+, AllZ 360° and AllZ Wallet, all of which are housed under Ariantec.

• Payallz had signed a partnership with Cambodia’s Hello Digital Co Ltd on 4th April, 2017 to provide technology resolutions and digital marketing services, which will include of AllZ mPOS, AllZ+, AllZ 360° and AllZ Wallet into their portfolio of products. (The Edge Daily)  

Source: Mplus Research - 5 Apr 2017