• The FBM KLCI finished 0.5% higher on Wednesday, buoyed by stronger crude oil prices amid tightening crude oil stockpiles and support on selective stocks. The lower liners, however, were on a downward bias – led by the FBM ACE (-0.1%). The broader markets ended mostly in the green – helped by last minute buying-interest.

• Market breadth, however, remained negative as losers outpaced winners on a ratio of 506-to-427 stocks. Traded volumes fell slightly by 5.0% to 4.02 bln on the back of mild profit-taking in the lower liners.

• Significant Main Board movers were BAT (+78.0 sen), Hong Leong Financial Group (+30.0 sen), Genting (+19.0 sen), Petronas Chemicals (+17.0 sen) and PPB Group (+12.0 sen). Meanwhile, broader market outperformers include Nestle (+RM1.98), HCK Capital Group (+RM1.05), Genting Plantations (+26.0 sen), Petron Malaysia (+24.0 sen) and Tasek Corporation (+20.0 sen).

• On the flipside, Ajinomoto (-54.0 sen), KESM Industries (-40.0 sen), Panasonic Manufacturing (-26.0 sen), JHM Consolidation (-13.0 sen) and Superlon (- 12.0 sen) weighed on the broader market on Wednesday’s close. The only three laggards on the FBM KLCI were RHB Bank (-5.0 sen), Public Bank (-2.0 sen) and Sime Darby (-2.0 sen).

• Asian equities finished mixed yesterday, as tensions between North Korea and the U.S. hit boiling point. The Nikkei declined 1.0% - dragged down by the stronger Yen as investors scrambled for safe-haven assets, while the Shanghai Composite lost 0.5% after lingering in the red for the entire trading session. The Hang Seng (+0.8%) however, recovered its earlier losses. Meanwhile, most ASEAN stockmarkets were slanted towards the negative side on Wednesday’s close.

• Wall Street retreated, alongside the Greenback after President Donald Trump commented that the U.S. currency “was getting too strong” in an interview. The Dow fell by 0.3% to close slightly above the 20,591.0 psychological level. On the broader market, the S&P 500 declined 0.4%, dragged down by losses in industrials and materials-related stocks, while the Nasdaq shed 0.5%.

• European stockmarkets closed mixed, as investors digested quarterly earnings from automakers and retailers. The FTSE (-0.2%) eased back to 7,349.0 points, pressured by British grocer Tesco (-5.7%) amid fierce competition in the grocery retailers industry. The CAC was little changed, while Germany’s DAX closed 0.1% higher on Wednesday.

The Day Ahead

• Despite yesterday’s gains on the FBM KLCI, the upside remains unconvincing as the uptick was relatively selective and just helped the key index to break out of its downward trend. Therefore, there remains no immediate change to the market outlook and we continue to think that the largely sideway trend is poised to continue.

• We see the key index lingering within the 1,740-1,750 levels over the near term amid the lack of fresh leads to provide lift for the index heavyweights to head significantly higher.

• However, interest on the lower liners and broader market shares should remain firm as retail players are still actively taking positions amid the ongoing rotational interest.

Company Briefs

• MNC Wireless Bhd has signed a Memorandum of Understanding (MoU) with M3 Technologies (Asia) Bhd (M3Tech) to develop an inclusive ecommerce platform with integrated payment gateway solutions and end-toend logistics support to operate in the newly-launched Malaysia Digital Free Trade Zone (DFTZ).

• The project will include a business-tobusiness trading platform for manufacturers to connect with international buyers and a consumer-toconsumer trading platform supporting smaller-scale entrepreneurs to sell through online platforms, according to the companies. (The Star Online)

• NetX Holdings Bhd is partnering with XOX Bhd to develop an electronic payment mobile exchange that enables XOX subscribers to be e-commerce merchants and have interconnectivity with both local and international payment gateways.

• The above parties have inked a one-year technology collaboration agreement, which can be renewed annually, to facilitate the collaboration. The project is expected to contribute positively to its earnings from FY18 onwards. (The Edge Daily)

• Zhulian Corp Bhd's 1Q2017 net profit more than doubled to RM14.6 mln, from RM7.1 mln last year, in-tandem with the improvements in its operating activities, which include a one-off separation employment benefit expenses of RM3.5 mln incurred in 1Q2016. Revenue was also marginally higher by 0.4% Y.o.Y at RM48.4 mln, from RM48.2 mln previously. ? Zhulian declared a first interim single tier dividend of 1.5 sen, payable on the 2th June 2017. (The Edge Daily)

• GHL Systems Bhd is acquiring a licence from Mastercard which will help the group offer electronic payment services and enhance card acceptance infrastructure for Mastercard products and solutions.

• The licence agreement will also enable the group to offer e-payment solutions to its clients. (The Edge Daily)

• Aluminium Company of Malaysia Bhd (Alcom) is planning a capital reduction and repayment exercise to improve its capital structure. The group wants to cancel its share capital by up to RM43.0 mln, reducing its share capital from RM142.4 mln to between RM99.5 mln and RM100.1 mln.

• The proposed exercise will see a cash distribution of 32.0 sen per share distributed to Alcom’s shareholders. Alcom expects to fund the repayment through external borrowings. (The Edge Daily)

• Heineken Malaysia Bhd’s 1Q2017 net profit slid 3.7% Y.o.Y to RM48.0 mln, from RM50.0 mln last corresponding period, as quarterly revenue fell 12.5% Y.o.Y to RM401.1 mln, from RM458.0 mln in 1Q2016. (The Edge Daily)

• Lion Industries Corp Bhd (LICB) is disposing its industrial property in Kapar, Klang, to Yinson Corp Sdn Bhd for RM45.0 mln to partly settle some outstanding debts owed by its 99%- owned Amsteel Mills Sdn Bhd after which it will lease back the asset from Yinson Corp.

• The industrial premise, which sits on a 3.23 ha. plot, encompasses a three-storey office building with an annexed singlestorey factory, two blocks of singlestorey factory and a guard house. It is currently used for the manufacturing of metal steel products and storage. (The Star Online)

• Berjaya Assets Bhd’s (BAssets) has acquired a 1.6% equity interest in 7- Eleven Malaysia Holdings Bhd, from Berjaya Retail Bhd (BRetail) via a direct business transaction at a price of RM1.50 per share, totalling RM27.0 mln. (The Edge Daily)  

Source: Mplus Research - 13 Apr 2017