• The FBM KLCI retreated to 1739.5 points, after shaving off 0.1%, on the back of selling pressure in selected heavyweights. The lower liners however, closed favourably – led by the FBM Ace (+0.8%), the FBM Small Cap (+0.3%) and the FBM Fledging (+0.6%). Similarly, the broader market also finished mostly in green.

• Market breadth was stable as decliners edged advancers on a ratio of 468-to-430 stocks. Traded volumes, however, plunged 29.9% to 3.66 bln shares as investors stayed on the sidelines amid the lack of fresh trading catalyst.

• Heavyweight constituents that fell include Kuala Lumpur Kepong (-22.0 sen), Genting (-13.0 sen), Petronas Dagangan (-10.0 sen), Hong Leong Bank (-6.0 sen) and Maxis (-6.0 sen). Broader market decliners include Tasek Corporation (- 24.0 sen), Tong Herr Resources (-15.0 sen), Pintaras Jaya (-14.0 sen) Genting Plantations (-12.0 sen) and Batu Kawan (- 10.0).

• On the other side of the trade, HCK Capital Group (+92.0 sen), Superlon (+33.0 sen), Willowglen (+30.0 sen), Time Dotcom (+20.0 sen) and Hai-O (+19.0 sen) rallied. Meanwhile, BAT (+20.0 sen), Hong Leong Financial Group (+18.0 sen) KLCC Properties & REITs (+10.0 sen), Axiata (+6.0 sen) and Ambank (+5.0 sen) all weighed-on the Main Board on Monday’s close.

• Key Asian stockmarkets were mostly in the negative territory as geopolitical tensions between U.S., Syria as well as North Korea cast a shadow over the regional indices. The Nikkei, however, bucked the general negative sentiment to close 0.7% higher due to gains in Toshiba (+6.3%), although the Shanghai Composite and the Hang Seng lost 0.5% and 0.2% respectively. The majority of ASEAN stockmarkets were splashed in red.

• Wall Street finished fractionally higher as gains in energy stocks offset the losses in banking shares ahead of the quarterly earnings reporting season. Despite a volatile intra-day session, the Dow flatlined slightly above the 20,658.0 points The S&P 500 also advanced about 0.1% - led by energy-related counters, while the Nasdaq also rose 0.1%

• European stockmarkets slid as investors digested a series of events including upcoming French election, G-7 meeting and heightened geopolitical concerns. The FTSE (-0.01%) was flattish, weighed down by miners, while the DAX capped its losses, albeit still closing down by 0.2%. The CAC (-0.2%) was also bearish ahead of France’s presidential election.

The Day Ahead

• There remain few leads in the market as the rising geopolitical concerns are likely to keep market upsides in check. Still, the overall market sentiments have not turned bearish as yet, but we think the FBM KLCI could continue to consolidate after it recent strong gains and its inability to close above the 1,740 level yesterday.

• We think the consolidation could send the key index back to the 1,730 level, which the 1,740 level will serve as the intermediate support. In the meantime, market breadth and depth could also waver due to the lack of catalysts, albeit we think the rotation plays among the lower liners and broader market shares could help to provide some support for now.

Company Briefs

• LPI Capital Bhd’s 1Q2017 net profit rose 7.9% Y.o.Y to RM70.6 mln on lower management expenses and claims incurred. Revenue for the quarter increased 8.4% Y.o.Y to RM347.6 mln. (The Star Online)

• Malaysia Airports Holdings Bhd (MAHB) handled 8.1 mln passengers at the 39 airports it manages in the country in March 2017, an increase of 10.6% Y.o.Y. The overall increase in passengers is mainly attributable to growth in airline seats and an improvement in average load factors. Overall average load factors improved by 2.3% Y.o.Y to 76% in March 2017, while overall aircraft movements increased 2.6% Y.o.Y in the same period. (The Edge Daily)

• Eco World International Bhd (EWI)’s wholly-owned unit, Fortune Quest Group Ltd has proposed to acquire an 80.0% stake in Salcon Development (Australia) Pty Ltd for RM400,896 and agrees to assume part of its liabilities in exchange for the development rights on a mixed development in Melbourne, Australia.

• A shareholders agreement would be signed between Fortune Quest and Salcon Development to regulate the rights and obligations to undertake the development of about 2,128 sq.m. of freehold land at Claremont Street, South Yarra in Victoria, Australia. Upon completion of the share sale agreement, Fortune Quest shall repay a sum equivalent to 80.0% of total advances to Salcon Development. Thereafter, the total advances owing to Salcon Development will be capitalised into shares. (The Edge Daily)

• CIMB Group Holdings Bhd has appointed Olivier Crespin as Chief Fintech Officer of its new standalone unit, CIMB FinTech which will explore new and innovative banking solutions effective June 2017.

• Crespin has more than 28 years of experience in the banking sector, having served highly reputable global and ASEAN-based organisations, and has held different business and operational positions across Europe, Latin America, Asia and North America.

• He was also involved in the introduction of India's first completely paperless, signatureless, branchless mobile banking, based on biometrics and artificial intelligence. (The Edge Daily)

• Elsoft Research Bhd has appointed Eng Chin Peng as its new Chief Operating Officer effective 10th April 2017. Eng has more than 25 years’ experience in engineering, product development, manufacturing and quality control.

• His previous positions include Senior Operating Manager for Elsoft Research in June 2016, as well as overseeing operations at Crest Ultrasonic Malaysia to support Crest sales worldwide. (The Edge Daily)

• YGL Convergence Bhd has proposed a private placement of 20% of its existing shareholding to raise up to RM6.2 mln to be used for business expansion, research and development, and working capital.

• The proposal would involve up to 38.7 mln shares representing 20.0% out of 193.6 mln total shares that would be placed with third party investors to be determined later. The issue price will also be fixed later. (The Edge Daily)

• Perak Corp Bhd, via its subsidiary Lumut Maritime Terminal Sdn Bhd (LMT) plans to buy four leasehold plots of land in Manjung from Perbadanan Kemajuan Negeri Perak (PKNP) for RM57.0 mln.

• LMT intends to hold the land, measuring 115.3 ac. in total, with the view to develop and construct another port or terminal there. The proposed acquisition will be funded through internallygenerated funds and borrowings. (The Edge Daily)

• Rohas Tecnic Bhd plans to buy a 75.0% equity interest in HG Power Transmission Sdn Bhd (HGPT) for RM101.7 mln from PT Safe Tower Systems Sdn Bhd and Kemuncak Agresif (M) Sdn Bhd.

• Both parties have agreed to use their best endeavours to negotiate and agree on all terms of the definitive share sale agreement to be entered in relation to the proposed acquisition within 60 days of the HoA.

• The purchase consideration will be satisfied via a combination of cash of RM22.5 mln and 83.3 mln new shares in Rohas Tecnic, which are to be allotted issued to Safe Tower Systems and Kemuncak Agresif, at an agreed issued price of 95 sen per Rohas Tecnic share. (The Edge Daily)

• Mudajaya Group Bhd has reported that GE Power Services (Malaysia) Sdn Bhd and Alstom Power Systems have agreed to pay RM60.0 mln cash to settle outstanding claims relating to the construction of a coal-fired power plant in Tanjung Bin, Johor. The power plant is coal-fired with a capacity of 1,000 MW was completed and handed over to the client in March 2016.

• The settlement will be used towards new and existing projects. It also still retains its rights to any recovery from insurance proceeds that were part of its total claims, via GE as the consortium leader for the project. (The Edge Daily)  

Source: Mplus Research - 11 Apr 2017