• The FBM KLCI (+0.04%) inched forward, lifted by gains in selective plantation heavyweights. The lower liners closed mixed as the FBM Small Cap (+0.2%) advanced, although the FBM Fledgling lost 0.2%, while the FBM Ace closed unchanged. The majority of the broader market shares were downward pressured, finishing in the red on Thursday.

• Market breadth was muted as losers beat gainers on a ratio of 455-to-388 stocks, while 405 counters flatlining. Traded volumes, however, gained 14.2% to 1.81 bln shares amid bargain-hunting activities in selected heavyweights.

• Significant blue-chip advancers include Sime Darby Plantations (+29.0 sen), which rallied for the third-straight day, alongside Genting Malaysia (+10.0 sen), Hong Leong Financial Group (+10.0 sen), Digi (+5.0 sen) and IOI Corp (+4.0 sen). Notable gainers include consumer products players like Nestle (+RM4.70), Ajinomoto (+96.0 sen) and Dutch Lady (+66.0 sen), followed by Malaysian Pacific Industries (+46.0 sen) and Heineken Malaysia (+40.0 sen).

• On the contrary, broader market underperformers were United Malacca (- 37.0 sen), Allianz (-30.0 sen), Lafarge Malaysia (-30.0 sen), Hengyuan Refining (-28.0 sen) and Panasonic Manufacturing (-28.0 sen). Laggards on the Main Board, meanwhile, include BAT (-30.0 sen), Telekom Malaysia (-19.0 sen), Hong Leong Bank (-18.0 sen), IJM (-9.0 sen) and RHB Bank (-8.0 sen).

• On the reginal front, key Asian stockmarkets staged a rebound as the Dollar strengthens. The Nikkei (+1.5%) snapped three consecutive sessions’ of losing streak and closed above the 22,400.0 psychological mark. The Hang Seng (+0.3%), also rallied, lifted by internet giant Tencent (+3.3%), although the Shanghai Composite index traded 0.7% lower, after lingering in the red for the entire session. The ASEAN stockmarkets, meanwhile, finished mostly higher yesterday.

• Wall Street advanced on Thursday – led by gains in technology stocks ahead of the released of the country’s employment data. Both the Dow and the S&P 500 ended higher by 0.3% as investors also await the potential changes in the tax code. Meanwhile, the Nasdaq notched 0.5% gains, boosted by Facebook and Amazon.

• Key European benchmark indices finished mostly higher as investors digested corporate deals and economic growth data. The FTSE, however, declined 0.4% - pressured by a stronger Pound and losses in mining stocks. Meanwhile, the DAX (+0.4%) and the CAC (+0.2%) logged gains amid signs of further recovery in the European economy.

The Day Ahead

• Although the FBM KLCI managed to stage a rebound yesterday, it was decidedly mild at the close with doses of quick profit taking activities sapping most of the gains. Nevertheless, the outcome was not surprising given that the overall market sentiments are still guarded and investors are unwilling to hold on to open positions for long and would opt to cash in on their gains quickly. This has left the key index just about the 1,720 level.

• We think there will be further base building efforts over the near term as the key index attempts to find a base around the above level, which is showing some promise as the FBM KLCI continues to linger around the 1,710 and 1,725 levels for now – a sign that the recent selldown could have come to an end. Still, the near term upsides could be capped by the quick profit taking activities, but there should be some support at the lower end of the above range with local institutions providing the support.

• Similarly, the lower liners and broader market shares are also likely to remain mostly rangebound in the absence of significant retail followings with the lack of new leads and many market players already on their year-end holidays.

Company Brief

• Sapura Energy Bhd 3QFY18 net loss stood at RM274.4 mln vs. a net profit of RM158.1 mln recorded in the previous corresponding quarter, due to lower contributions from its engineering and construction (E&C) and drilling segments as well as lower share of profit from joint ventures. Revenue for the quarter declined 42.0% Y.o.Y to RM1.28 bln.

• For 9MFY18, cumulative net loss stood at RM217.9 mln vs. a net profit of RM380.6 mln recorded in the previous corresponding period. Revenue for the period slipped 19.5% Y.o.Y to RM4.70 bln. (The Star Online)

• MQ Technology Bhd is seeking shareholder approval to diversify into gaming-related businesses following an agreement to offer the above services for casino operations in Star Vegas Resort & Club in Poipet, Cambodia. The group's marketing services for gaming related businesses may potentially contribute to 25.0% or more of the net profits of MQ Group or cause a diversion of 25% or more of its net assets.

• The marketing agreement was made with Vivo Tower, a casino marketing agency, which owns the licence to occupy and operate the casino in the resort owned by Donaco Holdings (HK) Pte Ltd.

• According to the terms of the marketing agreement, Vivo Tower will pay MQ half of the profits generated from the casino. The contract will run for a period of five years from 1st July 2017, with an automatic extension should Vivo Tower receive an extension to its lease of the casino.

• Separately, MQ has entered into subscription agreements for the proposed private placement of 82.9 mln shares, or 20.0% of the total issued shares in the company, at five sen a share. The proceeds of RM4.2 mln will go towards the implementation of the marketing agreement with Vivo Tower. (The Star Online)

• Supermax Corp Bhd is applying for leave from the court to allow its now former group managing director (MD) Datuk Seri Stanley Thai to be reappointed as a director or to act in such a capacity for the group. (The Edge Daily)

• SCGM Bhd’s 2QFY18 net profit slipped 3.1% Y.o.Y to RM5.3 mln due to a change in sales mix and higher cost of raw materials. Revenue for the quarter, however, gained 24.0% Y.o.Y to RM52.1 mln.

• For 1HFY18, cumulative net profit fell marginally by 0.8% Y.o.Y to RM10.8 mln. Revenue for the period, however, grew 32.4% Y.o.Y to RM105.8 mln. A second interim dividend of 1.5 sen per share, payable on 12th January 2018 was declared. (The Edge Daily)

• Poh Kong Holdings Bhd’s 1QFY18 net profit surged 202.8% Y.o.Y to RM5.4 mln, on increased demand for gold jewelry and gold investment products. Revenue for the quarter grew 19.1% Y.o.Y to RM220.9 mln. (The Edge Daily)

• ML Global Bhd has secured a RM78.1 mln contract to build a 24-storey apartment in Bandar Sunway, Selangor. The project comprises 359 apartment units and one level podium of facilities, four levels of podium car park and one level of semi-basement car park. (The Edge Daily)

• Acoustech Bhd is exiting its lossmaking audio business with the disposal of its wholly-owned subsidiary, Formosa Prosonic Technics Sdn Bhd (FPT) to speaker systems manufacturer Formosa Prosonic Industries Bhd for RM10.6 mln.

• Acoustech will instead focus on its property development business. Acoustech said the proposed disposal will result in an estimated one-off loss of RM1.2 mln. (The Edge Daily)

• LCTH Corp Bhd’s major shareholder, Fu Yu Investment Pte Ltd has launched a bid to take the precision plastic parts manufacturer private through a selective capital reduction (SCR) and cash repayment of RM61.3 mln or 58 sen per share, amid a challenging business landscape.

• Fu Yu, which owns 254.3 mln shares or 70.6% shareholding in LCTH and the parties acting in concert in the proposed exercise, collectively hold 258.7 mln or 71.8% in the company.

• The 58 sen offer price is a 32% premium to LCTH's closing price of 44 sen on 7th December 2017, which values it at RM158.4 mln. (The Edge Daily)  

Source: Mplus Research - 8 Dec 2017