• The FBM KLCI (-0.1%) retreated yesterday after trading in the negative territory for the entire trading session, bucking the positive developments across key regional indices. The lower liners – the FBM Small Cap (+1.3%), FBM Fledgling (+0.9%) and FBM ACE (+0.6%), however, all extend their gains, while the broader market closed mixed.

• Market breadth stayed positive as advancers outstripped decliners on a ratio of 612-to-353 stocks. Traded volumes added 11.7% to 4.44 bln shares as trading interests veered towards the lower liners.

• Key losers on the FBM KLCI were KLK (- 30.0 sen), Hong Leong Bank (-26.0 sen), Genting (-14.0 sen), Petronas Gas (-6.0 sen) and BAT (-6.0 sen). Consumer products giants like Dutch Lady (-58.0 sen) and Panasonic (-20.0 sen) fell, while other notable decliners on the broader market were TAHPS Group (-30.0 sen), Aeon Credit (-16.0 sen) and Genting Plantations (-16.0 sen).

• On the flipside, significant gains on the broader marker include Ajinomoto (+52.0 sen), JHM Consolidated (+43.0 sen), Success Transformer (+39.0 sen) and Kawan Food (+38.0 sen). Serba Dinamik jumped 15.0 sen after bagging five contracts collectively worth RM469.0 mln. Meanwhile, Petronas Dagangan (+8.0 sen), Hap Seng (+7.0 sen), Axiata (+5.0 sen), IOI Corporation (+2.0 sen) and Tenaga (+2.0 sen) were the big board gainers.

• Asia benchmark indices advanced as the Nikkei climbed 0.3% after the rally in Japanese Yen takes a breather. The Shanghai Composite jumped 1.5% as construction shares rallied after the government announced plans to build Xiongan New Area, mirroring the Shenzhen special economic zone, while the Hang Seng Index gained 0.6%. ASEAN stockmarkets, meanwhile, closed mixed.

• Despite the stronger-than-expected jobs data, late selling pressure sent U.S. stockmarkets lower overnight. The Dow declined 0.2% after the Federal Reserve plans to reduce US$4.5 trl worth of bonds from its balance sheet in 2017, while the S&P 500 fell 0.3% with nine out of the eleven main sectors in the red.

• European benchmark indices also ended mostly lower as the CAC and DAX declined 0.2% and 0.5% respectively ahead of the U.S. Federal Reserve interest-rate meeting. The FTSE, however, added 0.1%, lifted by stronger-thanexpected Markit Services PMI data that rose to 55 in March 2017.

The Day Ahead

• The FBM KLCI is seemingly trapped within a rangebound trend as it finds it hard to break-away from the 1,740-1,750 levels and it also appears that stronger catalysts are required to push the key index out of its sideway trend.

• With the market still devoid of significant catalysts for now, we expect the sideway trend to continue over the near term and the FBM KLCI’s direction would largely be independent on the performance of regional and key global indices.

• Despite the key index’s sideway trend, however, the broad market undertone is still healthy and this is reflected in the encouraging market breadth and depth of late. Therefore, we expect the rotational plays and trading activities on the lower liners and broader market shares to continue over the near term with retail players still showing strong market interest.

Company Briefs

• OSK Holdings Bhd is partnering the Employees Provident Fund (EPF) to develop a five-ac. mixed-use development in Melbourne, Australia, with an expected gross development value (GDV) of some A$2.8 bln.

• The EPF will acquire a 49.0% equity interest in Yarra Park City Pty Ltd (YPC) for A$154.0 mln, which holds the development rights for the Melbourne Square project located in Southbank, Melbourne. OSK will hold the remaining 51.0% equity stake in YPC. (The Star Online)

• Serba Dinamik Holdings Bhd has secured five contracts totaling RM469.0 mln which will enhance its position among the top providers of maintenance, repair and overhaul services domestically and internationally.

• The first deal include a four-year contract valued at RM65.0 mln from Shell MDS (M) Sdn Bhd to provide mechanical maintenance and project services, while a second deal involves a one-year contract worth RM45.0 mln by Petronas Carigali Sdn Bhd to provide maintenance services for weir gas compressors.

• The group also bagged a three-year contract from Muhammed Jabar Trading and Contracting to provide turbomachinery maintenance and engineering support services for a contract value of RM332.0 mln, as well as a three-year contract from Petrofac (Malaysia PM304) Ltd to provide condition-based monitoring with a value of RM2.0 mln. ? The last contract worth RM25.0 mln is for a one-year project by Petronas Floating LNG1 (L) Ltd to provide manpower, workshop facilities and equipment for rotating equipment overhaul and repair work. (The Star Online)

• LBS Bina Group Bhd has proposed a special dividend of two sen per share, payable on 30th June, 2017.

• The dividend will be funded from the receipt of the third tranche of the promissory note payment worth HK$200.0 mln. Further, the group is also expected to pay a special dividend of six sen per share for FY17, once it has received the fourth tranche of the promissory notes payment amounting HK$200.0 mln. (The Edge Daily)

• AEON Co (M) Bhd has aborted a proposed acquisition for a piece of 20-ac. land in Batu Pahat, Johor, which was slated for the development of a shopping centre.

• The proposal in 2014 to buy the freehold plot from Genting Property Sdn Bhd for RM34.9 mln has fallen through, due to the failure to satisfy to the conditions precedent to the sale. Subsequently, AEON said it would seek a refund of RM13.9 mln it had paid to Genting Property for the land purchase. (The Star Online)

• WCT Holdings Bhd has clinched a RM185.9 mln contract from Prasarana Malaysia Bhd for work packages related to construction of the Light Rail Transit Line 3 from Bandar Utama to Johan Setia.

• The deal includes the construction of the Johan Setia Depot and other associated construction works related to the 37kmlong LRT3, which has 26 stations covering Bandar Utama, Shah Alam and Klang, before terminating at Johan Setia in Klang.

• The contract works are expected to be completed within the next 18 months. (The Star Online)

• Carimin Petroleum Bhd has partnered Thailand’s Emas Energy Services Ltd to pursue tender bids in Malaysia based jobs on a “contractor-subcontractor” association.

• The group’s subsidiary, Carimin Engineering Services Sdn Bhd and Emas Energy will combine their resources and expertise to pursue the tender bids involving decommissioning, well plug and abandonment services.

• Carimin also said that it may also establish a dedicated joint-venture entity to manage future proposed business segments. (The Edge Daily)

• Karyon Industries Bhd said it has received an interim compensation of RM1.0 mln for last year's fire accident that had occurred at a third party premise located adjacent to one of its manufacturing facility in Masai, Johor.

• However, the group has yet to finalise the financial impact to the company and its subsidiaries as it is still pending the assessment from the Department of Environment on the cost of cleaning the chemical spill due to the fire incident. (The Edge Daily)  

Source: Mplus Research - 6 Apr 2017