• The FBM KLCI (-0.3%) slid into the red amid profit-taking activities on selected heavyweights, while the majority of the lower liners and broader market constituents also ended mostly in the negative territory despite rebounding from intraday losses. The technology (+0.5%), Industrial (+0.3%) and Fledgling (+0.4%) indices, however, bucked the general sluggish backdrop to close higher on Wednesday.

• Market breadth turned negative with 535 decliners against 391 advancers. Traded volumes, however, inched ahead slightly by 0.4% to 3.9 bln amid the profit taking activities.

• Blue-chip players like Petronas Dagangan (-30.0 sen), Genting Malaysia (-13.0 sen), Westports (-11.0 sen) and Public Bank (- 10.0 sen) weighed on the local bourse, while Petronas Chemicals (-13.0 sen) fell for the sixth- consecutive day amid the sustained selling-pressure. Other decliners were Bison (-15.0 sen), Iskandar Waterfront City (-14.0 sen), Bursa Malaysia (-12.0 sen), BLD Plantation (- 10.0 sen) and Litrak (-10.0 sen).

• Significant gainers on the broader market include Dutch Lady (+38.0 sen), Poly Glass Fiber (+27.5 sen), Pos Malaysia (+25.0 sen), Sam Engineering & Equipment (+25.0 sen) and Apex Healthcare (+24.0 sen). Petronas Gas (+20.0 sen), Hap Seng Consolidated (+9.0 sen), PPB Group (+4.0 sen) and Astro (+2.0 sen) were the winners on the keyindex. Axiata, meanwhile, rose 4.0 sen after it signed a four-year multitransponder contract with Thaicom PCL to lease capacity from the latter’s IPSTAR-1 satellite, which will allow Axiata to offer high-speed internet in Indonesia.

• Asian stockmarkets finished mixed-tohigher on Wednesday, on the back of the bullish sentiment spilled over from Wall Street overnight. Japan and Hong Kong stockmarkets were closed for public holidays, while the Shanghai Composite traded lower amid tighter financial market regulations. ASEAN indices finished mostly lower yesterday.

• Wall Street narrowed on Wednesday amid the weakness in commodities and lowerthan-anticipated quarterly results from Apple. The Dow, however, managed to claw back intraday losses in the eleventh hour, closing in the green. The S&P 500 (- 0.1%) and the Nasdaq (-0.4%), however, ended in the negative territory after the Federal Reserve kept interest rates unchanged.

• Earlier, benchmark European indices edged lower following an expected Eurozone’s GDP growth of 0.5% in 1Q2017. Minor profit-taking activities also weighed on the stockmarkets as investors await the Federal Reserve’s latest interest rates decision. The FTSE lost 0.2%, dragged down by miners and retailers, while the CAC inched 0.1% lower to close a shade above 5,300 points. The DAX (+0.2%), however, bucked the overall subdued sentiment on the back of gains in pharmaceuticals and healthcarerelated stocks.

The Day Ahead

• Despite piercing through the 1,780 resistance yesterday to form an intraday and year-high of nearly 1,785 points, the key index lost the uptrend initiative to close in the red and below the above level – a sign that the market is probably not ready to clear the above hurdle after its recent gains have left it valuations increasingly stretched.

• At the same time, it also appears that stronger catalysts are required to lift the FBM KLCI beyond the 1,780 level as there are fewer available compelling buys with most stocks already made decent gains since the start of the year. With yesterday’s weaker closing, we think the near-term sentiments could turn warier and further consolidation is possible that could bring the key index back to the 1,770 level.

• Profit taking activities could also linger among the lower liners and broader market shares in tandem with the consolidation of the index heavyweights, albeit we think the overall market sentiments is still on the firm side for now.

Company Briefs

• Tenaga Nasional Bhd has inked an agreement with SIPP Energy Sdn Bhd and SIPP’s wholly-owned unit, Southern Power Generation Sdn Bhd (SPG) to acquire a 51.0% equity stake in SPG for RM51. Following the acquisition, SPG will become the subsidiary of TNB. SPG is a special purpose vehicle company for the development of 2x720MW combined cycle gas turbine power plant in Pasir Gudang, Johor.

• The project is estimated to cost RM4.7 bln, which will be financed through a combination of project finance and equity. The plant is expected to achieve its scheduled commercial operation date on 1st July 2020. (The Star Online)

• SHL Consolidated Bhd has signed a jointventure (JV) agreement with Japanese general trading firm, Marubeni Corp to develop a condominium project with an estimated gross development value of RM327.0 mln in Bandar Sungai Long, Selangor.

• SHL will hold about 67.0% equity stake in the JV company (JVCo), while Marubeni’s subsidiary will hold the remaining 33.0%. Both parties will undertake the project on a plot of land that would be acquired from SHL’s unit for RM50.0 mln.

• Under the agreement, SHL will subscribe up to RM120.6 mln worth of shares for its stake in the JV company, while Marubeni will put in RM59.4 mln for its stake to fund the project. The project is expected to be completed in March 2020. (The Edge Daily)

• Fraser & Neave Holdings Bhd’s (F&N) 2QFY17 net profit grew 18.2% Y.o.Y to RM107.1 mln, from RM90.6 mln a year earlier, helped by lower operating expenses, higher share of results of an associate and lower tax expenses. Quarterly revenue shed 2.0% Y.o.Y to RM992.7 mln, from RM1.01 bln in the same quarter last corresponding period. The group has also proposed an interim single-tier dividend of 27.0 sen, payable on 15th June, 2017. (The Star Online)

• Sunway Real Estate Investment Trust (Sunway REIT) posted a 4.0% Y.o.Y rise in 3QFY17 net property income to RM100.2 mln vs RM96.7 mln a year ago, attributed to a resilient retail segment, as is its office segment. Total revenue for the quarter rose 3.2% Y.o.Y to RM134.6 mln, from RM130.4 mln.

• The REIT has also declared 2.4 sen in distribution per unit, payable on 6th June 2017. Including the latest proposed dividend, distribution for 9MFY17 has fallen to 6.9 sen per unit, from 7.1 sen per unit in 9MFY16. (The Edge Daily)

• Ancom Bhd will collaborate with ManagePay Systems Bhd (MPay) to offer electronic payment (e-payment) services to promote the local tourism sector to Chinese tourists. The group had inked a term sheet with MPay, which outlined the parties' intention to set up a joint-venture (JV) company for this purpose, leveraging on MPay's capabilities to operate e-payment systems and merchant aggregator business. (The Edge Daily)

• IWH CREC Sdn Bhd, a 60:40 jointventure between Iskandar Waterfront Holdings Sdn Bhd (IWH) and China Railway Engineering Corp (M) Sdn Bhd (CREC), has disputed claims by TRX City Sdn Bhd over the sale of a 60.0% equity interest in Bandar Malaysia Sdn Bhd. IWH is the single largest shareholder of Iskandar Waterfront City Bhd, holding about 38.3% equity stake in the latter.

• Earlier today, TRX City announced the termination of the share sale agreement signed with IWH CREC in December 2015, following the lapse of the aforementioned contract, after repeated extensions being granted.

• On the other hand, IWH CREC noted that it is currently reviewing the content of the termination notice and press release with its advisors and legal counsel, while TRX City has invited expressions of interest for the role of master developer of Bandar Malaysia, with full ownership being preserved by the Ministry of Finance. (The Star Online)

• Daibochi Plastic and Packaging Industry Bhd has obtained a regulatory approval from Myanmar for its joint-venture proposal to set up flexible packaging operations in that country and export the product to other countries.

• Moving forward, the company targets to officially commence operations in a month’s time. It also plans to invest some US$5.5 mln (RM23.8 mln) via internally-generated funds over a threeyear period to enhance its production capacity, quality, and efficiency there. The JV operation is expected to contribute significantly to its financial performance effective from 3Q2017. (The Edge Daily)

• REDtone International Bhd's former group Managing Director, Datuk Wei Chuan Beng, has resigned from the Board as a Non-Independent NonExecutive Director, effective 31st May 2017, to pursue his other private businesses. (The Edge Daily)

• Westports Holdings Bhd is participating in a joint bid for a contract to build Colombo Port's East Container Terminal in Sri Lanka. The group has submitted an expression of interest to participate in the consortium bidding for Colombo Port's new terminal and will make further announcements should there be any progress. (The Star Online)  

Source: Mplus Research - 4 May 2017