Window Dressing Resumes​​​​

• Tracking the subdued performance in the regional stockmarkets, the FBM KLCI closed in the red post-Christmas amid potentially slower global economic growth, heightened political risks and rising interest rates. All the lower liners also retreated alongside the broader market, with the exception of the banking and REIT-linked counters.

• Market breadth turned negative as losers outstripped the winners on a ratio of 567- to-208 stocks. Traded volumes, meanwhile, gained 11.7% to 1.41 bln shares post-Christmas due to renewed selldown in the lower liners.

• The majority of the FBM KLCI components were in the red, led by Nestle (-50.0 sen), followed by Tenaga Nasional (-46.0 sen), Petronas Gas (-40.0 sen), Petronas Dagangan (-30.0 sen) and Genting (-21.0 sen). Amongst the biggest declines on the broader market were United Plantations (-80.0 sen), BAT (-34.0sen), KESM Industries (-22.0 sen), Hong Leong Industries (-20.0 sen) and JCBNext (-16.0 sen).

• On the flipside, notable gainers on the broader market include Dutch Lady (+RM2.10), Heineken Malaysia (+48.0 sen), Fraser & Neave (+22.0 sen), Gopeng (+10.0 sen) and Airasia (+9.0 sen). Keyindex constituents that closed higher, meanwhile, were Maybank (+9.0 sen), PPB Group (+6.0 sen), Dialog (+5.0 sen), CIMB (+4.0 sen) and RHB Bank (+4.0 sen).

• Major Asian equities continued to be southbound, although Japan's blue-chip gauge, the Nikkei (+0.9%) closed higher on bargain-hunting activities after the severe sell-off yesterday. The Shanghai Composite (-0.3%), however, edged lower after lingering in the negative territory for the better part of the session. The Hang Seng remained closed for public holidays, while ASEAN stockmarkets were broadlylower.

• Major U.S. stockmarkets snapped its losing streak and rebounded strongly as investors returned from the Christmas holidays. The Dow rose 5.0% after jumping more than 1000.0 points, boosted by upbeat retail sales and the recovery in crude oil prices that surged 10%. Tech-heavy indices like the S&P 500 (+5.0%) and the Nasdaq (+5.8%) also rallied on the back of gains in FAANG stocks.

• European stockmarkets, however, were still closed for Christmas public holidays.

THE DAY AHEAD

• After a retreat on Boxing Day, we think the window dressing activities will resume on Bursa Malaysia over the near term as the upsides will be in tandem with strong surge on Wall Street overnight. As it is, there remains no change to the market’s fundamentals and the upsides will largely be on the positivity of overseas equity markets that is expected to permeate to the local bourse.

• Going into the final days of the week, there appears to be some more upside potential after global markets have taken a dip over the past few weeks. This could provide some impetus for further near term upsides amid some bargain hunting and window dressing activities that is likely to lift the global markets off their recent lows that would also extend to the Malaysia stockmarket. In the interim, the FBM KLCI could push past the 1,680 level and to take another stab at the 1,690 level amid the resumption of the window dressing acts. The supports, meanwhile, are at 1,660 and 1,650 respectively. The lower liners and broader market shares could also head higher in tandem with the improved sentiments, but the lack of following could limit their upsides over the near term, in our view.

COMPANY BRIEF

• Eversendai Corp Bhd has secured a total of RM321.0 mln worth of new contracts in Singapore, Qatar and India. The new contracts consist of a 26-storey commercial building project in Singapore and an army base camp project in Qatar. In India, the group secured a 49-storey tower plus another 41-storey commercial tower and a railway bridge project. YTD, Eversendai has secured new jobs worth a total of RM1.44 bln, while its outstanding construction order book stands at RM2.43 bln. (The Star Online)

• Malaysia Marine and Heavy Engineering Holdings Bhd's (MHB), has via a consortium with TechnipFMC, inked a long-term agreement (LTA) with Saudi Arabian Oil Company (Saudi Aramco). The agreement with an undisclosed value is valid for six years with an option to extend for another six years, covering engineering, procurement, fabrication, transportation, and installation of offshore facilities in support of Saudi Aramco's Offshore Maintain Potential Program and other works which will be executed within the Saudi Arabian waters. (The Edge Daily)

• OSK Holdings Bhd has permanently scrapped the listing of its indirect subsidiary, OCC Cables Ltd on the Main Board of The Stock Exchange of Hong Kong Ltd (HKEx) citing continuous adverse global market conditions. However, the group will expense off approximately RM12.1 mln for 2018, which are costs in relation to itsproposed listing exercise. (The Edge Daily)

• Genting Bhd has reported that its unit, Resorts World Las Vegas LLC (RWLV) will respond to a complaint on the architectural design of its upcoming hotel and casino resort property in Las Vegas by 14th January 2019. Genting was notified by RWLV that Wynn Resorts Holdings LLC had filed a complaint dated 21st December 2018 against the company alleging trade dress infringement, trademark dilution and copyright infringement over the design of the said project. (The Edge Daily)

• Gas Malaysia Bhd will raise the average natural gas base tariff for the non-power sector in Peninsular Malaysia to RM32.69 per mln british thermal units (MMBtu) from 1st January 2019 to 30th June 2019, up from the current RM31.92 per MMBtu. The revision, along with a 23 sen per MMBtu gas cost pass through surcharge, translates into an average effective tariff of RM32.92 per MMBtu — up 0.7% from the current average tariff after surcharge. (The Edge Daily)

• SCH Group Bhd is disposing of two pieces of freehold land along with the factories erected on them in Balakong, Selangor for RM6.6 mln cash. The group is expecting a gain on disposal of RM4.8 mln. The proposed disposals provide SCH with the opportunity to realise the properties’ value, which has increased since its acquisition in 1994 and to provide immediate cash flow which can be channelled towards the group’s business operations for working capital purposes. The group expects to complete the proposed disposals in 2Q2019. (The Edge Daily)

• Japanese online broker, SBI Japannext Co Ltd has bought an 11.7% stake in N2N Connect Bhd, allowing more opportunities for both parties to collaborate in the development ofalternative trading systems for the Asian region, particularly in cross-border trading. N2N has announced that its Asia Trading Hub spanning Southeast Asian countries such as Malaysia, Thailand, Indonesia, Singapore, Vietnam and the Philippines, as well as other markets in Asia, namely Hong Kong and Macau, provides its Japanese partner a platform to boost regional interest in Japanese equities and bonds through the former’s proprietary trading system. (The Edge Daily)

• The auditors of Goodway Integrated Industries Bhd have voluntarily resigned as both parties could not reach an agreement over the proposed audit fee for the group’s financial year ended 30th June 2019. Goodway would appoint another audit firm to fill the gap. Messrs Kreston John & Gan had been the firm’s auditors since 31st December 2011 and had been just reappointed following an annual general meeting on 19th December 2018 which were to hold office until the conclusion of the next annual general meeting of the company. (The Edge Daily)

Source: Mplus Research - 27 Dec 2018