• A last-minute push saw the FBM KLCI (+0.7%) closing firmly in the green, boosted by a more positive economic growth outlook, as the quarterly corporate earnings season reach the tailend. The lower liners - the FBM Ace (- 0.5%), the FBM Small Cap (-1.0%) and the FBM Fledgling (-0.9%) retreated on extended selling pressure, although the broader market traded mostly higher.

• Market breadth was still lacklustre as losers outweighed winners by more than two-fold. Traded volumes, however, inched higher by 1.9% to 1.84 bln shares, on rotational play in the lower liners.

• Hong Leong and Petronas-linked subsidiaries like Hong Leong Bank (+RM1.7), Hong Leong Financial Group (+54.0 sen), Petronas Dagangan (+16.0 sen) and Petronas Gas (+16.0 sen) led the key-index advancers, alongside Telekom (+21.0 sen) on Tuesday. Other gainers include Petron Malaysia Refining (+30.0 sen), Genting Malaysia (+13.0 sen), Maybank (+13.0 sen), IJM (+12.0 sen) and Ajinomoto (+10.0 sen).

• On the opposite trade, the broader market decliners were Malaysian Pacific Industries (-36.0 sen), Magni-Tech Industries (-34.0 sen), United U-Li Corp (- 31.0 sen), Kossan Rubber (-26.0 sen) and Hengyuan Refining (-24.0 sen). Meanwhile, the top five losers on the Main Board was Westports Holdings (- 14.0 sen), Sime Darby Plantations (-10.0 sen), Sime Darby (-5.0 sen), Genting (-4.0 sen) and KLCC (-1.0 sen).

• Major benchmark indices were splashed in red, dragged down by the weakness in technology stocks, in-tandem with the selling-pressure U.S. technology companies on Monday’s close. The Nikkei shed 0.4%, despite a weaker Yen, while the Shanghai Composite index fell 0.2%, albeit slightly offset by gains in financials-related counters. The Hang Seng also follow suit, losing 1.0% - led by losses in Tencent Holdings (-3.2%). ASEAN stockmarkets, meanwhile, closed broadly in the negative territory yesterday.

• U.S. equities declined on profit-taking activities, as investors assess the renewed threat of a potential government shutdown. The Dow traded lower by 0.5%, weighed down by losses in Walt Disney (-2.7%), while on the broader market – the S&P 500 (-0.4%) and the Nasdaq (-0.2%) narrowed, albeit slightly offset by gains in tech-giants.

• Earlier, European equities tumbled, weighed down by the decline in metal prices and unabated Brexit woes. The FTSE fell 0.2% - led by losses in miners as copper prices sunk to its two-month low, amid rising inventories. Meanwhile, the DAX (-0.1%) and the CAC (-0.3%) pared earlier losses - lifted by upbeat economic data, albeit still closing slightly in the red.

The Day Ahead

• Although the broader market’s sentiment remain tepid yesterday, the FBM KLCI managed to chalk in its biggest daily gain over the past month on late buying after being traded in a choppy manner. The recovery from the oversold position also pushed the key index back above the 1,720 level as signs of early window dressing activities emerged.

• For now, we expect the key index to stage further recovery but gains could be capped towards the 1,730 level amid the fresh weakness in global equities. On the downside, the recent low of 1,711 level will serve as a strong support at current juncture. ? Following the completion of 3Q2017 earnings report, which saw a mixed results, we expect further profit taking activities on the lower liners and broader market shares.

Company Brief

• Prestariang Bhd is bringing in French technology expertise to help deliver a comprehensive immigration control system for the Malaysian Government. Under a memorandum of agreement (MOA) signed on 5th December 2017, Prestariang has appointed In Continu Et Services (INCS), a subsidiary of Imprimerie Nationale SA, to perform the works and services required for the implementation of the “Sistem Kawalan Imigresen Nasional,” also known by its SKIN acronym.

• The tenure of the MOA, which covers the development phase of the project, is 32 months. The contract price for the project includes offshore development works, valued at €21.1 mln (RM102.0 mln) and onshore services worth RM4.4 mln. (The Star Online)

• Cahya Mata Sarawak Bhd (CMSB) long term concession to maintain the state roads of Sarawak has been extended by another six months until 30th June 2018. The extension is to facilitate negotiations and finalisation of the revised terms and conditions for the renewal of the agreement for the long-term management and maintenance of state roads in Sarawak. Tthe contract extension was estimated to be worth RM87.7 mln. (The Star Online)

• Marriott International and YTL Corporation Bhd’s hospitality arm, YTL Hotels have inked four Memorandums of Understanding (MoU), two of which are for the development of two luxury hotels in Malaysia under the JW Marriott and EDITION brands, and the remaining two for an EDITION and W Hotel in Niseko Village, Hokkaido, Japan.

• The group’s 20-year relationship with Marriott International has been pivotal to the growth of YTL Hotels in Malaysia, Asia, and the UK. In Malaysia, YTL Hotels’ second JW Marriott hotel will be strategically located near Kuala Lumpur Sentral, offering guests seamless connectivity and easy access to the city’s premier business and leisure destinations. Meanwhile, YTL celebrates the re-launch of the 578- room JW Marriott Kuala Lumpur on 5th December 2017 after having undergone a complete refurbishment. (The Star Online)

• Hibiscus Petroleum Bhd has received Petronas Carigali Sdn Bhd’s consent to acquire from Sabah Shell Petroleum Company Limited and Shell Sabah Selatan Sdn Bhd’s (Shell) 50.0% participating interests in the 2011 North Sabah Enhanced Oil Recovery Production Sharing Contract (PSC).

• The PSC comprises four producing oil fields and associated infrastructure, namely St Joseph, South Furious, SF30, and Barton oil fields. It also contains pipeline infrastructure and the Labuan Crude Oil Terminal. The PSC provides long-term production rights until 2040, with identified future developments opportunities. (The Edge Daily)

• George Kent (M) Bhd’s 3QFY18 net profit rose 20.8% Y.o.Y to RM28.7 mln, driven mainly by sales of water meters locally. Revenue for the quarter gained 4.1% Y.o.Y to RM127.1 mln.

• For 9MFY18, cumulative net profit added 22.4% Y.o.Y to RM72.6 mln. Revenue for the period improved 8.4% Y.o.Y toRM444.1 mln. A second interim dividend of 2.0 sen per share, payable on 12th January 2018 was declared. (The Edge Daily)

• Bison Consolidated Bhd is looking to open 90 new outlets in 2018 and is setting aside about RM24.0 mln for this expansion. These new outlets will mostly be myNEWS stores. The group believes the worst is over in terms of same-store sales which has been negative in 2017, as Bison is in an aggressive store revamping mode.(The Edge Daily)

• NetX Holdings Bhd’s 60.0%-owned subsidiary, PayAllZ Sdn Bhd (PSB), has entered into a deal with PayAllZ International Ltd (PIL) to provide technological and software support for PIL’s supply of an e-money payment platform to a Cambodian bank.

• PSB and Hong Kong-based PIL signed a six-year agreement which can be renewed every five years. PSB provides an e-wallet platform and service under the name of 'AllZ Wallet' for merchants to accept multiple payment channels. (The Edge Daily)

• Pharmaniaga Bhd is partnering Delhibased MSD Wellcome Trust Hilleman Laboratories Private Ltd (Hilleman) and a Ministry of Finance (MoF) entity to develop and manufacture halal vaccines to be incorporated in Malaysia’s national immunisation programmes.

• Pharmaniaga has entered into a Memorandum of Collaboration with Hilleman and the MOF unit, Technology Depository Agency (TDA), to coordinate their efforts to do so. The project covers the exchange of personnel from the companies for purposes such as teaching, research, and training in relation to halal vaccines.(The Edge Daily)

• Axis Real Estate Investment Trust (Axis-REIT) has added its 40th property — an industrial facility in Gebeng, Kuantan to its portfolio. The property comprises two contiguous parcels of land with buildings which are used for pipe coating related industrial activities. This latest acquisition will increase the total assets under management of the trust to RM2.46 bln. (The Edge Daily)

• Advance Synergy Bhd (ASB) is considering selling an 80.0% stake in its indirect wholly-owned unit Synergy Cards Sdn Bhd to AppAsia Bhd. ASB has signed a Memorandum of Understanding (MoU) with AppAsia for the purpose of recording their intention to enter into a share sale agreement. The MoU enables it to negotiate and finalise the terms of the proposed acquisition of Synergy Cards. Both ASB and AppAsia expect to sign the share sale agreement by 28th February 2018 or a period mutually agreed by them. (The Edge Daily)  

Source: Mplus Research - 6 Dec 2017