Minor Gains Ahead

• Bargain hunting activities in selected index heavyweights saw the FBM KLCI gap-up and subsequently close 0.3% higher yesterday, in tandem with the positive sentiment across regional markets. The lower liners – the FBM Small (+0.3%), FBM Fledgling (+0.5%) and FBM ACE (+0.3%) all rebounded, while broader market closed mixed.

• Market breadth turned positive as gainers outnumbered losers on a ratio of 529-to- 438 stocks. Traded volumes climbed 5.6% to 2.77 bln shares amid the bargain hunting activities.

• Once again, Nestle (+RM9.10) was ranked as the biggest advancer on the big board, followed by KLCC (+26.0 sen), Maxis (+21.0 sen), Press Metal (+21.0 sen) and Hong Leong Bank (+12.0 sen). Breweries like Heineken (+52.0 sen) and Carlsberg BAT (+32.0 sen) topped the broader market advancers list, while Muda Packaging (+27.0 sen) and Bursa (+24.0 sen) advanced. NWP Holdings added 5.5 sen after inking a Heads of Agreement (HoA) with LBS Bina Group Bhd (-3.0 sen) to jointly-undertake a development project.

• On the flipside, significant losers on the broader market include Dutch Lady (- RM1.00), Heng Yuan (-20.0 sen), Ayer Holdings (-18.0 sen), UMW Holdings (- 16.0 sen) and Magni-Tech Industries (- 14.0 sen). Meanwhile, Petronas Dagangan (-32.0 sen), Genting Malaysia (-12.0 sen), Telekom Malaysia (-10.0 sen), Genting (-6.0 sen) and Astro (-6.0 sen) were the key index biggest decliners.

• Tracking the sharp recovery on Wall Street overnight, Asia benchmark indices rebounded as the Nikkei (+1.8%) halted a fourth consecutive session of decline after the Japanese Yen retreated against the Greenback. The Hang Seng Index (+2.1%) also rebounded to close above the 30,000 psychological level, while the Shanghai Composite added 1.0%. ASEAN stockmarkets, meanwhile, closed mostly higher.
• U.S. stockmarkets endured a choppy trading session before marching higher as the Dow added 0.04% after concern over President Donald Trump’s protectionist policies eased, offsetting the weak factory data that shrank 1.4% M.o.M in January 2018. On the broader market, the S&P 500 rose 0.3%, lifted by basic materials sector (+1.1%), while the Nasdaq closed 0.6% higher.
• Earlier, European benchmark indices – the FTSE (+0.4%), CAC (+0.1%) and DAX (+0.2%), all extended their gains amid the stronger-than-expected retail PMI data that expanded to 52.3 in February 2018. Meanwhile, investors are also keeping an eye on the European Central Bank’s monetary policy decision in the upcoming Thursday meeting.

THE DAY AHEAD

• We think the mild recovery on Bursa Malaysia is likely to extend as the general equity market condition is becoming calmer, in line with the continuing positivity in many global stock market indices overnight as market players downplayed the U.S. President’s threat to impose import tariffs. Nevertheless, the buying strength is still broadly insipid with few new leads for investors to follow.

• Therefore, we think the near term upsides could be limited with the immediate resistance located at the 1,850 level, followed by the 1,860 level. While we expect the 1,850 to be cleared, we think the other resistant level will prove to be a bigger near term hurdle.

• Although the lower liners and broader market shares are also on the mend, the buying interest is still selective and we expect quick profit taking moves to curtail their near term upsides amid the lack of sustainable catalysts.

COMPANY BRIEF

• Berjaya Corp Bhd is disposing its entire 85.0% equity stake in DSG Holdings Ltd for RM266.0 mln. The remaining 15.0% shareholder, Earthlodge Investments Limited Elque Resources Sdn Bhd, who is also selling its entire stake.

• The two parties had entered into a sale and purchase agreement with Besino Environment Limited for the proposed disposal for a combined total of RMB508.0 mln (about RM312.9 mln) on 6th March 2018. Berjaya Corp is planning to use the proceeds from the sale of its shares as working capital. (The Star Online)

• JAKS Resources Bhd‘s 51.0%-owned unit, JAKS Island Circle Sdn Bhd (JIC) has issued a notice of arbitration to resolve its dispute with Star Media Group Bhd relating to the completion and delivery of Tower A of the Pacific Star project.

• This follows the notice of demand it received on 28th February 2018, stating that Star Media demanded the completion and delivery of Tower A by end-June 2018, giving JIC seven days from the date of the notice to respond. (The Edge Daily)

• Eita Resources Bhd has secured three contracts totalling RM126.2 mln for the supply of lifts and escalators for the Light Rail Transit Line 3 (LRT3) project. The contracts were awarded by Prasarana Malaysia Bhd. (The Edge Daily)

• TA Global Bhd said the group and its Chief Executive Officer, Tiah Joo Kim have not been questioned by the FBI. The company added that they also do not have business dealings with US President Donald Trump's son-in-law, Jared Kushner.

• This comes following a CNN report last Frida which said FBI were looking into Ivanka Trump's role in the development of the Trump International Hotel and Tower Vancouver in Canada. (The Star Online)

• MMC Corp Bhd has received a 30-year extension for its concession to operate Northport and Southpoint in Port Klang, Selangor. To recap, Northport's lease on its port concession had expired on 30th November, 2013. However, an interim privatisation agreement was signed between the government, Port Klang Authority (PKA) and Northport on 28th March 2014, which enabled Northport to continue to manage the port activities until a new privatisation agreement was approved.

• Subsequently, the parties have inked the official privatisation agreement for the extension of the concession that was signed yesterday. (The Edge Daily)

• Aeon Credit Service (M) Bhd has filed an appeal to the Court of Appeal against the High Court's decision yesterday to dismiss its judicial review application for additional taxes and penalties amounting to RM96.8 mln by the Inland Revenue Board (IRB).

• To recap, the group was served with notices of additional assessment for the years of assessment 2010 and 2016 with penalties by the IRB on 13th December 2017, which led to Aeon filling notices of appeal to the special commissioners of income tax with the Director-General of Inland Revenue (DGIR) to appeal against the notices of additional assessment.

• Further, the group has also filed a formal application for a stay against the enforcement of the notices of additional assessment to the High Court pending the disposal of its appeal. (The Star Online)

Source: Mplus Research - 7 Mar 2018