• The FBM KLCI (+0.2%) closed higher for the fourth straight session yesterday, lifted by the eleventh hour buying support in selective index heavyweights after the key index endured a choppy trading session. The lower liners, however, ended mostly lower as the FBM Small Cap and FBM Fledgling slipped 0.2% and 0.3% respectively, while the broader market ended mixed.

• Market breadth turned negative as decliners outstripped advancers on a ratio of 5-to-4 stocks. Traded volumes fell 7.2% to 2.29 bln shares as investors were wary of the generally negative market sentiment.

• Half of the key index components advance, led by Nestle (+RM6.90) that closed at another record high level, followed by Hong Leong Bank (+34.0 sen), Public Bank (+34.0 sen), AmBank (+12.0 sen) and Hap Seng (+12.0 sen). Consumer products stocks – Dutch Lady (+RM3.44), Ajinomoto (+RM1.64), Fraser & Neave (+RM1.20) and Heineken (+76.0 sen) continued anchor the broader market winners list, while Top Glove added 22.0 sen.

• Significant losers on the broader market include Petron Malaysia (-48.0 sen), Hartalega (-44.0 sen), KESM Industries (- 34.0 sen), Padini (-22.0 sen) and Genting Plantations (-21.0 sen). On the big board, Petronas Dagangan (-14.0 sen), Maxis (- 9.0 sen), Genting (-7.0 sen), Genting Malaysia (-7.0 sen) and Telekom (-2.0 sen) were amongst the biggest decliners.

• Asia benchmark indices closed mostly higher yesterday as the Nikkei (+0.7%) recovered all its intraday losses to close higher for the fourth straight session after the Japanese Yen weakened against the Greenback. The Hang Seng Index (+0.02%) chalked in minor gains after enduring a volatile trading session, but the Shanghai Composite (-0.5%) retreated as China plans to merge its banking and insurance regulators. ASEAN stockmarkets, meanwhile, closed mixed.

• U.S. stockmarkets extended their losses overnight as the Dow (-0.7%) erased all its intraday gains on a shake-up in the U.S. Cabinet following the sudden firing of U.S. Secretary of State, Rex Tillerson. On the broader market, the S&P 500 slipped 0.6% on weakness in technology sector (-1.2%), while the Nasdaq (-1.0%) halted its seventh consecutive winning days after Broadcom’s proposed takeover of Qualcomm was blocked.

• Earlier, European benchmark indices – the FTSE (-1.1%), CAC (-0.6%) and DAX (- 1.6%), all erased their intraday gains after both the British Pound and Euro currency appreciated against the Greenback after U.S. inflation data moderated to 0.3% in February 2018. Meanwhile, the U.K. government has raised the country’s economic growth to 1.5% (from 1.4%) in 2018.

The Day Ahead

• Despite the key index closing on a positive note yesterday, the broad market environment is still largely dour amid the still uncertain global market environment. As it is, it is largely the selective support that is keeping the key index afloat and to post the superficial gains.

• Moving ahead, there is no change to our immediate market view as we think the generally tepid market conditions will prevail for longer in the absence of fresh leads, both from domestic and foreign sources. However, we continue to think that the index linked stocks will remain supported as the window for the next general election date nears that could see increased support on FBM KLCI listed stocks. Therefore, we expect the key index to remain rangebound around the 1,850 and 1,870 levels for now, despite the persistent weakness in overseas indices.

• The insipid trend among the lower liners and broader market shares are likely to persist with retail players still unsure of the market’s direction. Already market breadth is thinning and with more market participants remaining on the sidelines, the downside risk remains.

COMPANY BRIEF

• UMW Holdings Bhd is planning to raise up to RM1.1 bln via a rights issue to fund the acquisition of a 50.1% equity stake in MBM Resources Bhd. The proposed exercise is mainly to pare a bridging facility to be obtained by the group to acquire the equity interest in MBM, as well as the resultant mandatory take-over offer for the remaining shares.

• The final quantum of gross proceeds to be raised can only be determined after the closing date of the mandatory offer, while the entitlement basis for the proposed rights issue and the issue price for the rights shares will only be fixed at a later date. (The Star Online)

• IOI Properties Group Bhd has aborted its agreement with Hongkong Land International Holdings Ltd (HKLI) to jointly-develop and manage a land parcel at Central Boulevard in Singapore, due to the non-fulfilment of certain conditions precedent to the contract. The termination is not expected to impact the development of the Central Boulevard site nor have any material impact on the group’s performance. (The Edge Daily)

• IJM Corp Bhd has received a contract for an underground package of the Light Rail Transit Line 3 project worth RM1.12 bln from Prasarana Malaysia Bhd. The 31-month project encompassed the design, construction and completion of underground tunnel, stations, ancillary buildings and other associated works, scheduled to commence this month. This is IJM’s first construction contract win in 2018. (The Star Online)

• SCGM Bhd‘s 3QFY18 net profit fell 22.7% Y.o.Y to RM5.4 mln, against RM7.0 mln a year ago, due to higher costs, depreciation charges and forex losses. Revenue for the quarter however, gained 16.2% Y.o.Y to RM53.4 mln, from RM46.0 mln a year earlier.

• For 9MFY18, net profit declined 9.3% Y.o.Y to RM16.3 mln, from RM17.9 mln in the previous corresponding period although revenue improved 26.5% Y.o.Y to RM159.2 mln against RM125.9 mln previously. Subsequently, the group has also proposed a third interim single tier dividend of 1.5 sen per share, payable on 13th April, 2018. (The Edge Daily)

• Mercury Industries Bhd’s 70.0%-owned unit, Paramount Bounty Sdn Bhd has clinched a contract worth RM25.0 mln for construction works in Gombak, Selangor from Aturan Prisma Sdn Bhd. The six-month contract includes site clearance, earthworks, retaining wall and soil improvement works. (The Edge Daily)

• Ire-Tex Corp Bhd was issued an Unusual Market Activity (UMA) query by Bursa Malaysia yesterday after a sharp increase in its price and volume. In response, the group said that there was no undisclosed corporate development in the company's business and affairs which could have resulted in the share price hike. ? Ire-Tex’s share price, which has been on a downward trend over the last five years, surged 126.1% from its all-time low of 11.5 sen on 2th March 2018. (The Edge Daily)  

Source: Mplus Research - 14 Mar 2018