Taking Small Steps

• The FBM KLCI (+0.1%) closed a shade above its breakeven line, lifted by the recovery in selected telco giants and last minute buying-interest in selected heavyweights on Bursa Malaysi. On a weekly basis, the key-index crawled 0.1% W.o.W higher to 1,846.4 points. The lower liners finished mostly lower, although the FBM ACE (+0.5%) ended on the contrary. The broader market meanwhile, closed slightly higher on Friday’s closing bell.

• Market breadth was still negative as losers topped winners on a ratio of 504- to-382 stocks. Traded volumes, meanwhile, flatlined at 2.88 bln shares as investors remain cautious amid the lingering concerns over potential trade wars.

• Significant movers on the key-index last Friday were telco giants like Maxis (+13.0 sen) and Axiata (+12.0 sen), tailed by Hong Leong Financial Group (+36.0 sen), MISC (+18.0 sen) and RHB Bank (+12.0 sen). Meanwhile, Fraser & Neave (+82.0 sen), Magni-tech (+52.0 sen), MWE (+33.0 sen), Batu Kawan (+20.0 sen) and Genting Plantations (+20.0 sen) pushed the broader market higher.

• On the flip side, sin stocks like Heineken Malaysia (-58.0 sen) and Carlsberg (-50.0 sen) saw selling pressure, followed by other broader market laggards like Hengyuan Refining (-34.0 sen) Petron Malaysia (-30.0 sen) and Time Dotcom (- 29.0 sen). Main Board underperformers were KLCC (-20.0 sen), Digi (-11.0 sen), Genting Malaysia (-11.0 sen), Hong Leong Bank (-6.0 sen) and IOI Corporation (-6.0 sen).

• Japanese stocks lost its footing at Friday’s close, hit by the stronger Yen amid weak investors’ risk appetite. The Nikkei fell 0.6%, weighed down by losses in the Information Technology (-1.2%) sector. The Hang Seng Index (-0.1%) and the Shanghai Composite (-0.7%) also declined on worries on rising U.S. protectionism. ASEAN equities mostly retreated last Friday.

• U.S. equities finished positively on Friday, although all three indices posted weekly losses amid concerns over potential U.S. trade war and political turmoil in the White House. The Dow (+0.3%) traded largely in the positive territory, lifted by strong industrials data. Meanwhile, the S&P 500 also gained 0.2%, but the Nasdaq flatlined at 7,482.0 points.

• Earlier, European equities shrugged off the uncertainties in the U.S. and ended in the green as investors digested fresh corporate news. The FTSE closed up 0.3%, boosted by the extended weakness in the British Pound, although gains were capped by the decline in homebuilders after Berkeley Group gave a sluggish view of the market. The CAC (+0.3%) and DAX (+0.4%) meanwhile, also closed on the same note on Friday.

The Day Ahead

• After the key index eked-out minor gains last Friday, we think there should be sustained near term uptrend as the key index continues to stage a recovery, taking cue from overseas equity indices. However, we continue to think the upsides may stay insipid given that the market undertone is still largely insipid, devoid of significant leads. In addition, the uncertain timing of the upcoming General Election is also providing some dampener on market sentiments.

• With the market’s recovery prospects remaining meek, we see the near term upsides finding resistance at the 1,850 level, followed by the 1,855-1,860 levels. The supports, meanwhile, are at 1,840 and 1,820 levels.

• Despite the insipid market environment, we think the downside pressure on the lower liners and broader market shares have abated after their selloff over the past month. As it is, many stocks are attempting to build up a base and we think this process is likely to continue over the near term.

COMPANY BRIEF

• Berjaya Sports Toto Bhd’s 3QFY18 net profit added 23.6% Y.o.Y RM59.2 mln, boosted by a turnaround at Londonbased luxury car dealer, HR Owen Plc and lower prize pay-outs by core subsidiary Sports Toto. Revenue for the quarter improved 2.7% Y.o.Y to RM1.40 bln

• For 9MFY19, cumulative net profit grew 15.7% Y.o.Y to RM195.3 mln. Revenue for the period improved marginally by 0.1% Y.o.Y to RM4.26 bln. A third interim dividend of 4.0 sen per share, payable on 3rd May 2018 was declared. (The Star Online)

• MWE Holdings Bhd’s share price surged by 33.0 sen or 25.4% to RM1.63 on last Friday, largely on the back of a privatisation offer from Tan Sri Surin Upatkoon. Surin, via Pinjaya Sdn Bhd, has requested the company to undertake a selective capital reduction (SCR) and capital repayment exercise. The corporate exercise involved the SCR and a corresponding capital repayment of a proposed cash amount of RM1.75 per share to entitled shareholders.

• Pinjaya Sdn Bhd holds a 30.8% stake in MWE, while parties acting in concert (PAC) are Magnum Bhd (1.3%), Puan Sri Suwini Bingei (0.4%) and Casi Management Sdn Bhd (0.2%). The proposed SCR will be funded via MWE’s internally generated funds and bank borrowings. Surin also do not intend to maintain the listing status of MWE on the Main Market of Bursa Malaysia Securities Bhd. (The Star Online)

• Wah Seong Corporation Bhd’s indirect wholly-owned, Wasco Engineering International Ltd has bagged a US$34.6 mln (RM135.2 mln) contract for the design and sale of gas compressor packages and associated plant and site facilities in Iraq. The contract, awarded by Basrah Gas Co of Iraq, is expected to start in March 2018 and end by December 2018. (The Edge Daily)

• Vizione Holdings Bhd has announced a share consolidation exercise which will see seven shares of the company consolidated into one share. The proposal which is expected to be completed by 2Q2018 is aimed at fetching a higher trading price for its shares and to attract more investors. (The Edge Daily)

• Priceworth International Bhd has revised its proposed rights issue with bonus shares due to the new no-parvalue regime under the Companies Act 2016. The two-for-one rights issue will now consist of a single call of five sen per share, payable in cash, instead of a two-call exercise. The proposed bonus issue of one share for every two rights shares subscribed remains unchanged. (The Edge Daily)

• Bina Darulaman Bhd has reactivated its Executive Committee (Exco) to assist the management in day-to-day operations and other business dealings until a new Group Managing Director is appointed, following the passing away of Datuk Izham Yussof on 13th March 2018. The Exco will be chaired by its Non-Independent and Non-Executive Director Abdul Rahman Abdullah, With the activation of the Exco, the formation of the business continuity management working committee on 14th March 2018 is now dissolved. (The Edge Daily)

• Golden Land Bhd plans to acquire a third piece of land measuring 1,625 ha. in the Sandaran district in Indonesia's East Kalimantan province. Golden Land has inked an agreement with an Indonesian company to assist in obtaining the required documents including the land use rights and to help in resolving issues, claims, disputes, and clearing of the land, within 36 months from the signing date. (The Edge Daily)  

Source: Mplus Research - 19 Mar 2018