More Upsides in Store

• The FBM KLCI notched 0.6% gains yesterday, on the back of the positive sentiments spilled over from global stockmarkets and follow through buyingsupport in Petronas-linked heavyweights. The lower liners – the FBM Small Cap (+0.9%), the FBM Fledgling (+1.5%) and the FBM Ace (+1.8%) rallied amid a mostly upbeat broader market.

• Market breadth stayed strong as winners dominated the losers by more than twofold, while traded volumes jumped 38.2% to 5.11 bln shares, on the back of extended buying momentum in the broader market.

• Heavyweights outperformers were Nestle (+90.0 sen), Petronas Gas (+42.0 sen), Sime Darby (+19.0 sen), Petronas Dagangan (+14.0 sen) and Maybank (+12.0 sen). Other gainers include broader market constituents like KESM Industries (+38.0 sen), Lysaght Galvanised Steel (+38.0 sen), Bursa Malaysia (+28.0 sen), My E.G. Services (+23.0 sen) and Southern Acids (+23.0 sen).

• On the contrary, Hengyuan Refining (- 56.0 sen), Dutch Lady (-30.0 sen), Hartalega (-26.0 sen), Petron Malaysia (- 26.0 sen) and Uchi Technologies (-13.0 sen) bucked the general market direction to closed lower. Meanwhile, Main Board laggards were MISC (-7.0 sen), Maxis (- 5.0 sen), Hap Seng Consolidated (-4.0 sen), Press Metal (-4.0 sen) and Hong Leong Bank (-2.0 sen).

• Asian stockmarkets were mostly higher, taking leads from the strong performance in Wall Street yesterday. The Nikkei remained closed for a holiday. Meanwhile, the Hang Seng Index (+0.2%) continued its upward momentum, boosted by gains in technology shares and the Shanghai Composite added 0.6%, with all of its eleven sectors in the green. Majority of the ASEAN stockmarkets also followed suit, logging gains at Wednesday’s close.
• Major U.S. stockmarkets extended their rally, setting fresh new highs as investors digested favourable economic data and gains in technology stocks. The Dow was 0.4% higher amid optimisms of robust economic growth. On the broader market, the S&P 500 (+0.6%) closed above the 2,700.0 psychological mark for the first time, while the Nasdaq (+0.8%) soared, lifted by technology giants like Alphabet and IBM.
• European equities rebounded – led by gains in exporters, in-tandem with a stronger Greenback. The FTSE gained 0.3%, boosted by retailers like Next (+6.7%) on stronger-than-expected fullyear profit forecast. Meanwhile, both the CAC and the DAX also added 0.8% to close upwards on Wednesday.

The Day Ahead

• With global markets still on the climb, we see Malaysian stocks following suit over the near term and extending its gains at the start of the year. As it is, global equities are still riding on the positive sentiments brought about by the approval of the U.S. interest rate cuts and the prognosis of firmer economic condiitons. Malaysian stocks are also seeing a revival as we head into an election year.

• Still, we think the near term gains may be overdone after a strong two week performance that has seen the key index surging some 5.0%. Therefore, we think that further gains will be more difficult to come by and we expect the 1,800 points level to remain a formidable level for the key index to clear over the near term. Much of the past two sessions’ gains have been also due to the renewed interest on the lower liners and broader market shares as retail players return from their year-end break. We continue to think that they will make a beeline to the market and pick-up speculative plays, taking advantage of the more positive market environment to undertake trading activities.

Company Briefs

• Kerjaya Prospek Group Bhd has proposed the issuance of bonus shares and warrants to reward its shareholders. It had proposed a bonus issue of up to 677.4 mln new shares on the basis of six bonus shares-for-every five shares held. Kerjaya Prospek also proposed a bonus issue of up to 169.4 mln new warrants on the basis of six bonus warrants-for-every 20 shares held.
• Upon completion of the proposals, its enlarged share capital on a fully diluted basis will increase to 1.41 bln shares. The proposed issuances are also aimed at improving the trading liquidity and marketability of its shares on the Main Market of Bursa Securities whilst increasing the capital base. (The Star Online)

• Felda Global Ventures Holdings Bhd (FGV) has secured Roundtable on Sustainable Palm Oil (RSPO) certification for eight mill complexes at the end of last year and aims to get eight more mill complexes certified by March 2018.

• The eight newly RSPO-certified mills are expected to produce over 200,000 tonnes of certified sustainable palm oil (CSPO) and almost 60,000 tonnes of certified sustainable palm kernel oil (CSPK). Aside from capitalising on the premium offered, FGV will be able to access markets in the European Union and North America, as well as customers that demand certified palm oil products.
• Besides the eight more RSPO-certified mills, FGV expects to see more than 30 mill complexes to be audited by RSPO and Malaysian Sustainable Palm Oil (MSPO) by end-December 2018. Moving forward, FGV plans to see its 70 palm oil mill complexes certified by RSPO and the MSPO by the end of 2021. (The Edge Daily)
• Wah Seong Corp Bhd will pay Dutch pipe-coating solutions fabricator and installer Bauhuis BV £500,000 (RM2.7 mln) as part of a settlement agreement, bringing an end to arbitration proceedings in London between the two parties. The settlement follows an outstanding payment claim of €3.9 mln by Bauhuis against Wah Seong’s indirect wholly-owned subsidiary Wasco Coatings HK Ltd.

• The claim was for the supply of pipecoating equipment to be installed and commissioned by Bauhuis at a pipe manufacturing plant in Regina, Canada, under a contract signed in 2015. (The Edge Daily)

• Westports Holdings Bhd has achieved a container throughput of about 9.0 mln twenty-foot equivalent units (TEU) for 2017 as Port Klang became one of the leading transhipment hubs in the region for the Ocean Alliance. The 9.0 mln TEUs figure is within Westports' volume guidance, which was 7%-12% lower compared to 2016. (The Edge Daily)

• TDM Bhd has accepted land parcels totalling 4,515 ha. in Kemaman and Dungun from the state government through a grant, which is in line with TDM's domestic plantation expansion plan. TDM’s current landbank in Terengganu stands at 31,848 ha. and the acceptance of the new land, together with the proposed acquisition of controlling stake in Ladang Rakyat Trengganu Sdn Bhd which was announced in February 2017, will increase TDM’s total land bank in Terengganu to 47,830 ha. (The Edge Daily)
• Selangor Dredging Bhd (SDB) has declared a special dividend of 19.0 sen per share from proceeds of the group's sale of Wisma Selangor Dredging. The dividend ex-date is set at 16th January 2018, payable on 29th January 2018. The proceeds came from SDB disposal of Wisma Selangor Dredging to Golden Eagle Realty Sdn Bhd for RM480.0 mln .(The Edge Daily)
• My EG Services Bhd has launched a new commercial service to provide job matching and placement services to match Malaysian employers with foreign workers. (The Edge Daily)

• Aturmaju Resources Bhd (ARB) has proposed a reduction of its share capital to help improve its financial position and cut accumulated losses. The group plans to reduce its capital from RM61.1 mln to RM6.7 mln, giving rise to a credit of RM54.4 mln.

• Proceeds will be utilised to set-off the company’s and group’s accumulated losses of approximately RM53.8 mln, based on the audited financial statements of the company for 31st December 2016. (The Edge Daily)

Source: Mplus Research - 4 Jan 2018