More Of The Same

• The FBM KLCI bucked the negative sentiment on U.S. stockmarkets a day earlier to close higher on Tuesday on the back of last-minute buying support on selected heavyweights. The lower liners however, continued to trade on a downward bias, while majority of the broader market was painted red.

• Market breadth was weak as losers beat winners by more than two-fold although traded volumes recovered marginally by 0.6% to 1.96 bln as risk appetite remained subdued amid lingering worries over the potential global trade wars and expectations of higher U.S. interest rates.

• Among the Main Board gainers were Public Bank (+40.0 sen), MISC (+25.0 sen), IHH Healthcare (+15.0 sen), Axiata (+14.0 sen) and Maxis (+12.0 sen). Meanwhile, other outperformers on Tuesday included healthcare-related stocks like Apex Healthcare (+24.0 sen), Caring Pharmacy (+13.0 sen), followed by Fraser & Neave (+36.0 sen), Hap Seng Consolidated (+11.0 sen) and LBI Capital (+11.0 sen).

• On the other side of the trade, Ajinomoto (-42.0 sen), Malaysian Pacific Industries (-26.0 sen), United U-Li Corporation (-24.0 sen) and Carlsberg (-22.0 sen) weighed on the broader market. Poh Huat Resources also lost 22.0 sen after reporting weak quarterly results due to margin compression. Large cap gainers’ list included Nestle (-RM1.70), KLCC (- 39.0 sen), Astro Malaysia (-14.0 sen), Telekom Malaysia (-12.0 sen) and Hong Leong Bank (-10.0 sen).

• Japanese equities extended its losses for the third straight session, weighed down by the weakness in tech stocks after the Nasdaq tanked a day earlier and resulting in the Nikkei shedding 0.5% ahead of its national holiday on Wednesday. TheShanghai Composite, however, shrugged off the general bearish sentiment to close 0.4% higher on the back of gains in healthcare and energy stocks. The Hang Seng Index (+0.04%) also inched higher. The ASEAN stockmarkets meanwhile closed mixed on Tuesday.
• All the three key U.S. indices rebounded from Monday’s sharp selldown, driven by higher energy prices and stronger Greenback on expectations of an interest rate hike this week. The Dow (+0.5%) closed in the green, buoyed by gains in Boeing (+1.8%) and Nike (+1.7%). On the broader market, S&P 500 (+0.2%) and Nasdaq (+0.3%) also advanced, although losses in Facebook continued to weighed on other technology peers.
• European equities regained some lost grounds from Monday’s decline as investors digested a string of fresh economic data. The FTSE notched 0.3% gains on the back of lower-than-expected inflation data which dragged the Pound lower earlier. Meanwhile, the DAX and the CAC also closed on similar tone, logging 0.7% and 0.6% gains respectively.

THE DAY AHEAD

• Although the key index defied expectations to end higher on a last minute buying support yesterday, we remained unconvinced that the market has turned the corner. As it is, the buying was selective and centered on the index heavyweights, while interest in the broader market shares remained subdued; thus the general market environment is still largely uncertain, in our view.

• We think the current trend will persist over the near term with the key index continuing to hold up amid the selective support on the index heavyweights that could be further supported by the recovery in global indices overnight. However, we expect the broader market and lower liner stocks to continue drifting as there are still few signs of a revival in the buying interest from retail players.
• After the key index was pushed past the 1,850 level yesterday, the next resistances at 1,860 and 1,870 are back in play. Meanwhile, the 1,850 level has now become the immediate support, followed by the 1,830 level.

COMPANY BRIEF

• Axiata Group Bhd's subsidiary, Dialog Broadband Networks (Private) Limited is venturing into the data centre business in Sri Lanka by buying a 35.0% stake in Digital Reality (Private) Ltd for 262.5 mln Sri Lankan rupees (RM6.6 mln). Digital Reality was set up to manage Sri Lanka’s first ever high-density data centre which will be located at the Orion City IT park in Colombo.

• The stake is acquired from St. Anthony’s Property Developers (Private) Ltd – which is currently the sole shareholder of Digital Reality. St. Anthony’s Property Developers also provided options for Dialog Broadband to increase its stake in Digital Reality and obtain control which are exercisable within a period from year three-to-year five. (The Star Online)

• Crest Builder Holdings Bhd has secured a RM117.8 mln construction contract form Toyoma Aluminium Foil Packaging Sdn Bhd. The 18 months contract for the construction of main buildings that consists of a six storey of office, factory and car parks at Section 19 in Petaling Jaya. (The Star Online)

• PUC Bhd and Advwhere Ltd has established a partnership, under which PUC gains the exclusive right from Advwhere to market the Cloudbreakr Technology in Malaysia, Indonesia and Singapore to media partners and advertisers.
• The collaboration will add value to the company by widening the range of media spaces that PUC an offer to its advertisers as PUC will now be able to offer to its advertisers and potential media partners an additional option of advertising and promotion through the Cloudbreakr Technology. (The Edge Daily)
• Mudajaya Group Bhd has obtained Islamic financing facilities worth RM90.0 mln to part finance infrastructure contracts. The facilities will also be used for tender, performance bond and advance payment guarantee. (The Edge Daily)

• Tien Wah Press Holdings Bhd has terminated a joint venture agreement (JVA) with Vietnamese company, Dong Nai Food Industrial Corp (Dofico) as the latter’s failure to deliver a set volume of printed tobacco packaging had caused losses in the partners’ joint venture company. (The Edge Daily)

• Pasukhas Group Bhd has bagged construction works worth a combined RM41.3 mln from Paramount Property Construction Sdn Bhd for a hotel and serviced apartments in Shah Alam, Selangor.

• The project includes a five-storey car park, a 14-level block of serviced apartments of 389 units, a 14-level block of hotel with 240 rooms and a taxi stand with roofing. (The Edge Daily)

• KSL Holdings Bhd is acquiring nine more parcels of freehold land measuring 74.7 ha. in Johor Bahru for RM176.9 mln. This came just eight days after it proposed to buy two parcels of leasehold land measuring 47.7 ha. in the same area for RM133.6 mln to enlarge its landbank. (The Edge Daily)

• XingHe Holdings Bhd has entered into a joint venture (JV) agreement with My Ocean Venture Sdn Bhd (MYO) and VC Marine Sdn Bhd (VCM) to venture into the tuna and seafood processing business in Malaysia. (The Edge Daily)

• Berjaya Media Bhd’s 3QFY18 net loss narrowed to RM2.5 mln, from RM4.5 mln in the previous corresponding quarter, as the previous corresponding period included a RM1.5 mln impairment loss on publishing rights. Revenue for the quarter, however, fell 22.6% Y.o.Y to RM8.3 mln.

• For 9MFY18, cumulative net loss contracted to RM6.5 mln, from RM7.1 mln in the previous corresponding period. Revenue for the period declined 20.5% Y.o.Y to RM26.8 mln. (The Edge Daily)

Source: Mplus Research - 21 Mar 2018