Still On Window Dressing Mode

• Tracking the positive sentiments in regional stockmarkets, the FBM KLCI closed above the 1,76 0.0 psychological mark, lifted by the rally in crude oil prices. All the lower liners logged gains – led by the FBM Ace index (+1.8%). The broader market also finished higher, with sevenof-ten sectors in the green.

• Market breadth turned positive as winners overtook losers on a ratio of 578- to-334 stocks, while 393 counters flatlined. Traded volumes also rose 11.9% to 2.31 bln shares, lifted by buying-interest in O&G-related counters, in-tandem with higher crude oil prices.

• Petronas-linked companies like Petronas Chemicals (+20.0 sen) and Petronas Gas (+18.0 sen) advanced, followed by other heavyweights like Press Metal (+23.0 sen), Genting (+15.0 sen) and Kuala Lumpur Kepong (+14.0 sen). Meanwhile, Hengyuan Refining (+RM1.10) and Petron Malaysia (+82.0 sen) tracked the stronger crude oil prices, followed by Ajinomoto (+40.0 sen), PMB Technology (+37.0 sen) and KESM Industries (+26.0 sen).

• On the contrary, Pharmaniaga (-22.0 sen), Dutch Lady (-20.0 sen), MSM Malaysia (- 16.0 sen), Fraser & Neave (-14.0 sen) and Country Heights (-7.0 sen) weighed on the broader market. Significant index heavyweight decliners, meanwhile, were PPB Group (-22.0 sen), Nestle (-10.0 sen), Telekom Malaysia (-6.0 sen), IOI Corporation (-2.0 sen) and Digi (-1.0 sen).

• Key regional benchmark indices were mostly higher, boosted by the strength in crude oil prices. The Shanghai Composite was down by 0.9%, however, on concerns over a potential economic slowdown in China as investors digested the weak industrial profits reading. The Nikkei, gained 0.1%, boosted by energy stocks amid stronger crude oil prices and the Hang Seng Index closed with minute gains, following last minute buyingsupport. Similarly, ASEAN equities also closed mostly higher on Wednesday.
• Wall Street traded incrementally higher, supported by gains in real estate and utilities, which offset the weakness in energy and telecommunications-related stocks amid holiday-thinned trading. The Dow eked-out 0.1% gains, boosted by Visa (+0.9%) and McDonalds (+0.8%). The S&P 500 (+0.1%) also followed suit, while the Nasdaq (+0.04%) flatlined.
• Key European stockmarkets finished mostly higher, albeit slightly weighed down by losses in European chipmakers, following weaker-than-expected IPhone demand. The FTSE logged 0.4% gains, boosted by metal-producers while the CAC closed up by 0.1% to 5,368.8 points. The DAX, meanwhile, finished flattish at Wednesday’s closing bell.

The Day Ahead

• True to form, the FBM KLCI tipped higher yesterday in window dressing activities that has now seen it surpass the 1,770 level and with only two trading days left for the year, we see further window dressing activities that could see the key index marching towards the 1,780-1,800 points levels as it takes advantage of the generally positive undertone in global stockmarkets for the process.

• The gains, however, will be largely centered on the index heavyweights amid support from institutional players, while interest on the broader market and lower liners shares could remain tepid as many retail players are still away on their yearend holidays. The lack of notable leads will also keep market breadth on the modest side.

• Meanwhile, the 1,750 level remains the main support for now, while the intermediate support is at the 1,760 level.

Company Briefs

• Yinson Holdings Bhd is buying out its minority partner in Anteros Rainbow Offshore Pte Ltd (ARO), a firm involved in the leasing of floating, production, storage and offloading unit for US$9.0 mln (RM36.8 mln). Following the completion of the acquisition, ARO would become an indirect wholly-owned subsidiary of Yinson and ceased to be a joint venture entity with FVSN. (The Star Online)

• Muhibbah Engineering (M) Bhd had secured a RM70.0 mln contract from Tenaga Nasional Bhd for the construction of a reinforced concrete jetty and platform for establishment stations in Johor. The contract is scheduled to commence in 1Q2018 and is expected to be completed within 12 months from the commencement date. (The Star Online)

• REDtone International Bhd’s whollyowned REDtone Engineering & Network Services Sdn Bhd (RENS) has been appointed by the Malaysian Communications and Multimedia Commission (MCMC) to provide 2G and 3G public cellular services in rural areas in Malaysia.

• RENS has received the Notice of Approval from MCMC for its appointment as Universal Service Provider for the project, which will be executed in eight states. The project is part of MCMC’s Time 3 Extension Phase 3 Programme and is subject to a maximum cost of about RM250.8 mln. (The Edge Daily)

• Selangor Properties Bhd’s 4QFY17 net profit dipped 64.4% Y.o.Y to RM20.4 mln, due to lower other operating income. Revenue for the quarter, however, climbed 28.7% Y.o.Y to RM45.2 mln.
• For FY17, cumulative net profit rose 37.5% Y.o.Y to RM92.6 mln. Revenue for the year gained 15.9% Y.o.Y to RM140.2 mln. (The Edge Daily)
• Hua Yang Bhd is planning to buy the entire stake in a property firm called Kajang Heights Development Sdn Bhd for RM70.0 mln cash. The acquisition of Kajang Heights comes with four parcels of freehold land measuring approximately 19.8 ac. in Kajang, Selangor, on which a proposed mix development has been planned comprising service apartments, retail units and affordable houses.

• The proposed development carries an estimated gross development value of RM800.0 mln to be funded via internally-generated funds. (The Edge Daily)

Source: Mplus Research - 28 Dec 2017