• The FBM KLCI (-0.6%) remained in the red for the sixth straight session, dragged down by the sluggish economic data from China and Japan that fueled expectation of a global economic slowdown. The lower liners also ended mostly lower as the FBM Small Cap and FBM ACE sank 1.0% and 1.1% respectively, while the Healthcare sector (+0.5%) outperformed the negative broader market.

• Market breadth remained negative as decliners outnumbered advancers on a ratio of 549-to-253 stocks. Traded volumes decreased 46.1% with only 1.43 bln shares exchanging hands as investors adopted a risk-off mode.

• Two-thirds of the FBM KLCI’s constituents fell, dragged down by Petronas Dagangan (-34.0 sen), followed by Hong Leong Bank (-20.0 sen), Public Bank (-20.0 sen), Press Metal (-16.0 sen)and CIMB (-14.0 sen). Among the biggest decliners on the local bourse were BAT (- 70.0 sen), Dutch Lady (-50.0 sen), Bintulu Port (-45.0 sen), Heineken (-38.0 sen) and BLD Plantations (-27.0 sen).

• On the flipside, notable advancers on the broader market were Carlsberg (+30.0 sen), UMW Holdings (+24.0 sen), Ata IMS (+11.0 sen), Berjaya Media (+10.5 sen) and Wang-Zheng (+8.0 sen). Key winners on the local bourse were Nestle (+RM1.10), Hong Leong Financial Group (+28.0 sen), Hartalega (+13.0 sen), IHH (+9.0 sen) and KLK (+6.0 sen).

• Asia benchmark indices closed on a mixed note as the Nikkei slipped 0.3% on weakness in shares of automakers. Both the Hang Seng Index and the Shanghai Composite added 0.1% and 0.4% respectively after recovering all their intraday losses after China re-affirmed itsstance on the on-going trade talks with U.S. ASEAN stockmarkets, meanwhile, closed mixed yesterday.

• U.S. stockmarkets ended mostly lower overnight as the Dow fell 0.2% after U.S. President Donald Trump threatened a government shutdown should funding were not approved for the proposed border wall. On the broader market, the S&P 500 declined 0.04% after erasing all its intraday gains, but the Nasdaq extended its gains by 0.2%.

• Earlier, European equities – the FSTE (+1.3%), CAC (+1.4%) and DAX (+1.5%), all rebounded after the Chinese government is said to be reviewing a proposal to cut tariffs on U.S. made autos to 15% from 40%. Market sentiment was also boosted by France’s President Emmanuel Macron plans to cut taxes and lift wages for workers.

THE DAY AHEAD

• Once again, the Malaysian stockmarket has fallen more than anticipated as the selling remains unabated amid persistent talk of a weaker global economic outlook for 2019. The frail market condition is also leaving most market players on the sidelines for longer.

• Under the prevailing environment, the downside bias is still present that could further leave the key index at a fresh year low after it recorded a new low for the year at 1.652 points yesterday. However, the key index is also oversold and a rebound is already due, albeit there are still few signs of a rebound as yet.

• With no signs of a reversal as yet, we see further near term weakness as sentiments remain subdued and the buying interest is still faint. With the key index already tethering near the 1,650support, a breach could send the FBM KLCI to the 1,646 and 1,640 levels. The resistances remain at the 1,660 and 1,670 levels.

• The FBM Small Cap, Fledgling and ACE Market indices are seeing little reprieve and are continuing to mark new lows for the year. Their immediate outlook remains frail amid the lack of buying support, albeit they are oversold and a rebound is already overdue.

COMPANY BRIEF

• LB Aluminium Bhd‘s 2QFY19 net profit jumped 69.4% Y.o.Y to RM2.8 mln, from RM1.7 mln a year earlier, mainly due to higher sales volume and ASPs. Revenue also gained 12.9% Y.o.Y to RM143.3 mln vs. RM126.9 mln previously. (The Edge Daily)

• Alam Maritim Resources Bhd has clinched a conditional five-year contract from ExxonMobil Exploration and Production Malaysia Inc to provide panMalaysia underwater services for petroleum arrangement contractors.

• The contract is on a call-out basis, whereby work orders will be issued by clients based on schedule of rates provided. Thus, the total value of the contract will be contingent upon the actual work orders and the scope of work performed. (The Edge Daily)

• Vortex Consolidated Bhd is acquiring a mixed development project in Kajang with a gross development value (GDV) of more than RM340.0 mln, in-tandem with its business diversification into the property sector.

• The group is planning to buy over a 85.0% equity stake in loss-making private property firm, Paris Dynasty Land SdnBhd, for a nominal cash consideration of RM100. Paris Dynasty Land owns a 2.8 ac. iece of freehold land, including an existing property development on the land named “the Louvre”. Construction on the Louvre commenced in March 2015 and is currently only 20.2% completed. (The Edge Daily)

• AirAsia Group Bhd and its subsidiary AirAsia X Bhd have been sued by Malaysia Airports Holdings Bhd (MAHB) for a total of RM36.1 mln for outstanding airport taxes.

• MAHB had sent legal letters to AirAsia and AAX demanding both airlines remit outstanding airport taxes or passenger service charges (PSCs) for international departures from 1st July 2018.

• Both AirAsia and AAX said they would defend these proceedings “vigorously” as they believe the claims were made “without justification and are unreasonable”. (The Edge Daily)

Source: Mplus Research - 12 Dec 2018