• Despite recovering some of its earlier losses, the FBM KLCI still lost 0.3% to 1738.2 points amid selling pressure in selected heavyweights and the bearish sentiment spilled over from the U.S. stockmarkets overnight. All the lower liners retreated, while the broader markets were splashed in the red, with the exception of the Mining (+3.3%) subsector.
• Market breadth was negative as decliners outweighed advancers by more than three times. Traded volumes also fell 3.9% to 3.86 bln as investors stayed on the sidelines amid heightened geopolitical tensions.

• Plantations-related stocks like Kuala Lumpur Kepong (-38.0 sen) and IOI Corporation (-15.0 sen) weighed on the Main Board, alongside Genting (-15.0 sen), Hong Leong Financial Group (-14.0 sen) and Petronas Gas (-12.0 sen). Meanwhile, Nestle (-78.0 sen), United Plantations (-70.0 sen), Malaysian Pacific Industries (-58.0 sen), HCK Capital Group (-47.0 sen) and Heineken Malaysia (-44.0 sen) also retreated.

• Broader market advancers were Eita Resources (+27.0 sen), Harrisons (+23.0 sen) and Bison (+13.0 sen), while both Enra and Warisan finished 10.0 sen higher. Meanwhile, Genting Malaysia (+13.0 sen), Petronas Dagangan (+8.0 sen), IHH Healthcare (+4.0 sen), PPB Group (+2.0 sen) and Tenaga Nasional (+2.0 sen) outperformed its blue-chip counterparts.

• Major regional benchmark indices finished lower – due to persisting uncertainties in the global political backdrop. The Nikkei (-0.7%) extended its losses for the third-straight day, dragged down by exporters amid a strengthening of the Yen. The Hang Seng retreated by 0.2%, capped mostly by losses in the resources sector, although the Shanghai Composite reversed earlier losses and closed in the green - on the back of better-than-expected trade data. The majority of the ASEAN stockmarkets finished in the negative territory.
• U.S. equities were splashed in red after U.S. launched its largest non-nuclear bomb on Islamic State positions in Afghanistan. The Dow pulled back by 0.7% amid growing skepticism in the implementation of President Donald Trump’s fiscal reforms. Similarly, S&P 500 shed 0.8% - led by losses in the energy sector, while the Nasdaq ended 0.5% lower ahead of the Good Friday holiday celebrations.
• U.K. equities finished the holiday shortened week on soft footing, weighed down by banking stocks amid potential credit tightening. The FTSE fell 0.3%, with Standard Life (-8.9%) and HSBC (-1.7%) weighing on the index. The CAC and the DAX, meanwhile, closed down by 0.6% and 0.4% respectively.

The Day Ahead

• The increasingly dour global stockmarket sentiments are expected to permeate to Bursa Malaysia and we think the key index is also likely to end the week on a softer note. At the same time, there is few fresh positive leads locally and consequently, we expect the market to trend lower over the near term.

• This pullback could see the key index falling back to the 1,730 support after it failed to hold above the 1,740 level yesterday – a sign that the near term buying interest is ebbing and short-term players are taking the opportunity to also lock-in their profits after the recent gains.

• The uncertain near term market conditions could also lead to more retail players exiting the market and retreat to the sidelines until there is clarity in the market’s direction Therefore, we think that both market breadth and depth could thin over the near term.

Company Briefs

• Handal Resources Bhd has signed a goods and services outline contract with ExxonMobil Exploration and Production Malaysia Inc to provide offshore crane maintenance services.

• The three-year contract is expected to be completed by 9th April 2020, with an option for further extension of a year. (The Star Online)

• SEG International Bhd (SEGi) is proposing a five-for-seven bonus issue of up to 516.8 mln shares, which will be fully capitalised from the group’s share premium account. (The Edge Daily)

• Borneo Aqua Harvest Bhd is planning to issue up to 325.7 mln free warrants on the basis of one free warrant-for-every two existing Borneo Aqua shares. The entitlement date for the proposed exercised will be determined later.

• The exercise price for the seven-year warrants is fixed at 87.0 sen per warrant, representing a premium of 3.9% over the five-day volume weighted average market price of Borneo Aqua shares.

• The proceeds from the exercise will be used to fund working capital, which may include mine production cost, cost of prospecting on the subleased mining land measuring 289.7 ha. in Sabah, as well as its aquaculture business operations expenditure. (The Edge Daily)

• Anzo Holdings Bhd has secured a contract worth up to RM1.21 bln from KL Northgate Sdn Bhd to build portions of a mixed-use commercial development that includes a five-storey shopping mall in Selayang.

• The group had received a Letter of Intent from KL Northgate to undertake construction works on the shopping mall, which has an estimated gross development value of RM3.6 bln, as well as carparks within the proposed development called the "Paragon @ KL Northgate".

• KL Northgate's major shareholders are Transcend Development Sdn Bhd, Datuk Eddie Chai Woon Chet — who is also the group Managing Director of Anzo — and Curahan Yakin Sdn Bhd. (The Star Online)  

Source: Mplus Research - 14 Apr 2017