• The FBM KLCI (+0.4%) extended its gains for the second consecutive day, on optimism stemming from stronger commodity prices. The lower liners, followed suit, - closing mostly higher, with the exception of the FBM Fledgling (- 0.02%) which inched into the red while more than half of the broader market constituents finished on an upward bias.

• Market breadth was positive as advancers edged decliners on a ratio of 467-to-444 stocks, while traded volumes also gained 14.3% to 2.64 bln shares on the back of extended positive momentum in commodity prices.

• Top key index gainers were Nestle (+RM2.10), Hong Leong Bank (+30.0. sen), Tenaga Nasional (+30.0 sen), Petronas Gas (+20.0 sen) and Press Metal (+13.0 sen). Broader market charttoppers, meanwhile, include BAT (+RM1.70), Pharmaniaga (+50.0 sen) and Wang Zheng (+17.0 sen). O&G-stocks like Hengyuan Refining (+RM1.46) and Petron Malaysia (+74.0 sen) also tracked higher on the back of stronger crude oil prices.

• Major broader market decliners were Selangor Properties (-20.0 sen), Eita Resources (-18.0 sen), United U-Li Corporation (-18.0 sen), Malaysian Pacific Industries (-16.0 sen) and KESM Industries (-14.0 sen). Meanwhile, plantations heavyweights like Kuala Lumpur Kepong (-32.0 sen) and Hap Seng Consolidated (-7.0 sen) contributed to the losses on the FBM KLCI, followed by PPB Group (-18.0 sen), MISC (-10.0 sen) and Genting Malaysia (-5.0 sen).

• Japanese stockmarkets retreated on Thursday despite upbeat retail and industrial data. The Nikkei lost 0.6%, weighed down by profit-taking in energy stocks ahead of the long New Year’s weekend. On the other hand, the Shanghai Composite (+0.6%) advanced – led by gains in consumer staples and healthcare-related counters, while the Hang Seng Index rose 0.9%, boosted by property giant Country Garden (+7.9%). Meanwhile, ASEAN stockmarkets continued to track higher.

• Major U.S. benchmark indices advanced, on gains in financial stocks and recovery in giant tech counters. The Dow was 0.3% higher, amid light holiday trading ahead of the long weekend. Meanwhile, Apple and Amazon pushed both the S&P 500 and the Nasdaq 0.2% higher on Thursday.

• Key European stockmarkets finished mostly in the red amid the lack of fresh trading catalyst as the year comes to an end. The FTSE flatlined as a stronger Pound capped gains in mining stocks. Meanwhile, the CAC declined 0.6% and the DAX lost 0.7% to close below the 12,300.0 psychological mark.

The Day Ahead

• Once again, the bout of window dressing activity sent the FBM KLCI higher yesterday that quickly nullified the early session weakness. Going into the last trading day of the year, we see further window dressing activities as the market looks to take advantage the buoyant global market environment to help the key index end the year on a flourish note.

• With the key index nearing the 1,780 level, we think it should be breached with relative ease with the continuing strong institutional support. Further upsides are seen at the psychological 1,800 points level, but there will be hurdles at the 1,793-1,796 levels to contend with. Meanwhile, the immediate support lies at 1,770, followed by the 1,760 level.

• There is no change to our view that the lower liners and broader market shares could endure lower following as many retail players are away for their break and hence, there will be lower market breadth.

Company Briefs

• Berjaya Corp Bhd (BCorp) 2QFY18 net loss stood at RM150.0 mln vs. a net profit of RM176.5 mln in the previous corresponding quarter, mainly due to a RM57.9 mln impairment provision and RM39.9 mln loss arising from the partial disposal of an associated company. Revenue for the quarter fell 11.1% Y.o.Y to RM2.19 bln.

• For 1HFY18, cumulative net loss stood at RM189.4 mln vs. a net profit of RM113.8 mln in the previous corresponding period. Revenue for the period dropped 6.4% Y.o.Y to RM4.38 bln. (The Star Online)

• HSS Engineers Bhd’s associate, HSS Integrated Sdn Bhd (HSSI) has been appointed to provide supervising consultancy services for infrastructure works for the first 231.5 km of the East Coast Rail Link (ECRL) project.

• China Communications Construction (ECRL) Sdn Bhd made its 30.0%-owned HSSI the consultant for Package 1 of the RM55.0 bln project, which involves building a 688 km electrified railway system linking the east coast states to the Klang Valley. The contract, with an estimated value of up to RM82.5 mln, would kick off in 1Q2018 and expected to be completed in the 2Q2024. (The Star Online)

• Acoustech Bhd has executed two Memoranda of Understanding (MoU) with Innocashz (M) Sdn Bhd to form a joint venture (JV) to jointly develop the hotel with an expected GDV of RM40.0 mln on 1.2 ac. of the Customs Immigration and Quarantine (CIQ) land, which is located by the riverbank of Sungai Melaka and within 15 minutes from Jonker Walk. Innocashz owns the CIQ land, which is presently charged to Public Bank Bhd.

• Another MoU is with Goldsand JV Sdn Bhd to form a JV to build 152 units of affordable serviced apartment on 3.9 ac. of leasehold land in Krubong, Melaka. Dubbed "Melaka Residences", it has an estimated GDV of RM40.5 mln. (The Edge Daily)

• Pos Malaysia Bhd has awarded a RM8.1 mln contract to PST Ventures Sdn Bhd, for the latter to provide security and information and communications technology (ICT) services for the redevelopment and refurbishment of the former low-cost carrier terminal (LCCT) in Sepang.

• Under the letter of award, the development services will be completed within six months from the commencement date and PST Ventures will provide warranty services of up to five years from the date of delivery of the equipment. (The Edge Daily)

• Karyon Industries Bhd is acquiring a 3,842 sq. m. land in Plentong, Johor, along with buildings erected on it for the setting up of additional manufacturing line and storage capacity there. The RM6.7 mln acquisition will be financed through a combination of internal funds of about RM2.2 mln and bank borrowings of RM4.5 mln. (The Edge Daily)

• MY E.G. Services Bhd (MyEG) has lost an appeal against a decision by the Malaysia Competition Commission (MyCC) imposed on 6th October 2015 that it had infringed the Competition Act. The tribunal has upheld MyCC’s decision with a consequential amendment — a financial penalty amounting to RM2.3 mln and an additional daily penalty amounting to RM7,500 computed from 25th June 2016 to 28th December 2017.

• MyEG must also halt differing conditions in the processing of mandatory insurances for its foreign worker employment permit renewal services, as well as provide an efficient gateway for competitors for the sale of the insurances — allowing them to compete on level ground within 60 days from 28th December 2017. However, MyEG intends to seek for a judicial review and also apply for a stay against the CAT’s decision. (The Edge Daily)

• Penang property magnate, Tan Sri Ooi Kee Liang has emerged as the thirdlargest shareholder in steelmaker Tatt Giap Group Bhd after acquiring a 7.6% stake from its founder and Executive Chairman, Datuk Siah Kok Poay.

• Ooi, who is the Executive Chairman of Ideal Property Development Sdn Bhd, had on 26th December 2017 purchased 13.0 mln shares for a total of RM1.6 mln, or 12 sen per share, from Giapxin Sdn Bhd. This brings his total shareholding in Tatt Giap to 21.4 mln shares or a 12.5% stake.

• The trade effectively reduced Kok Poay's total stake in the company to 13.2% held via Giapxin, which is controlled by his son Siah Lee Beng. It also resulted in Arich Holdings Inc becoming the group's largest shareholder with a 15.3% stake, unchanged since April 2017. (The Edge Daily)  

Source: Mplus Research - 29 Dec 2017