Positive End To 2018, But Expect Choppiness

• Late gains in selected index heavyweights nudged the FBM KLCI (+0.1%) marginally higher as the key index rose 1.3% W.o.W to mark its second consecutive weekly winning streak. The lower liners also trended mostly higher as both the FBM Small Cap and FBM Fledgling rose 0.5% each, while the broader market finished mostly higher.

• Market breadth stayed positive as advancers nudged decliners on a ratio of 385-to-343 stocks. Traded volumes, however, fell 11.7% to 1.42 bln shares as investors opted to remain in the sidelines for further leads.

• Key winners on the local bourse were KLK (+50.0 sen), PPB Group (+50.0 sen), MISC (+25.0 sen), Maxis (+11.0 sen), Press Metal (+8.0 sen). Fraser & Neave (+RM1.04) rose for the seventh straight session, while other notable advancers on the broader market were United Plantations (+54.0 sen), Batu Kawan (+28.0 sen) and UMS Holdings (+19.0 sen). Malton jumped 6.0 sen higher after jointly winning a Taipei construction project.

• In contrast, consumer products stocks like BAT (-36.0 sen), Panasonic (-32.0 sen) and UMW Holdings (-18.0 sen) led the broader market decliners list, while Hong Leong Industries and MPI fell 20.0 sen and 17.0 sen respectively. Meanwhile, Nestle (-60.0 sen), Hong Leong Bank (-20.0 sen), Malaysia Airport Holdings (-14.0 sen), Top Glove (-11.0 sen) and Sime Darby (-8.0 sen) were the key index’s biggest losers.

• Asia benchmark indices closed mixed as the Nikkei (-0.3%) gave up some of its previous session’s sharp gains to book its first annual loss since 2012, falling 12.1% Y.o.Y. The Hang Seng Index managed to add 0.1% after climbing into the positive territory in the final trading hour, while the Shanghai Composite added 0.4%. ASEAN stockmarkets, meanwhile, closed mostly higher last Friday.

• U.S. stockmarkets endured a choppy trading session before closing mostly lower as the Dow slipped 0.3% on a holiday-shortened trading week. On the broader market, the S&P 500 fell 0.1%, dragged down by the energy sector (- 0.9%), but the Nasdaq added 0.1%

• Earlier, major European indices – the FTSE (+2.3%), CAC (+1.7%) and DAX (+1.7%) all closed sharply higher, taking cue from the sharp recovery on Wall Street overnight. Market sentiment was also lifted by the strong rebound in crude oil prices that boosted the gains in oil & gas shares.

The Day Ahead

• Despite the continuing volatility, Malaysian stocks managed to eke-out gains last Friday to ensure that the recent uptrend is preserved. Going into the final trading day of the year, we see further selective buying support that will allow the key index to sign off 2018 on a positive note.

• Still, the upsides could be peppered by bouts of volatility as the buying strength remains on the weak side and follow through buying is lacking, judging by the low traded volumes. Hence, the market environment may likely oscillate between the positive and negative zones before some late buying lifting the key index potentially into the positive zone for the day. The resistances are at 1,700 and 1,710 respectively, while the supports are pegged at the 1,690 and 1,680 levels.

• The lower liners and broader market shares are also poised for further recovery as many stocks are attempting to extricate themselves from their year low after an extended downtrend that lasted nearly a year. As it is, the selldown on the lower liners are extremely overdone, leaving valuations at attractive levels that warrants accumulation.

COMPANY BRIEF

• Trading in PUC Bhd's shares will be suspended on 31st December, 2018 pending a material announcement. (The Edge Daily)

• Berjaya Land Bhd is planning to divest its entire 75.0% equity stake in TPC Nghi Tam Village Ltd (TPC Village) joint venture (JV), which operates the five-star Intercontinental Hanoi West Lake Hotel, for 1,244.59 bln Vietnamese dong (or RM222.2 mln). The proposed disposal will result in an estimated gain of about RM192.3 mln. Vietnam-based Thang Long GTC joint stock company holds the remaining 25.0% stake in TPC Village. (The Star Online)

• Paramount Corp Bhd has established a 20-year unrated Islamic Medium Term Notes (Sukuk Murabahah) Programme of up to RM800.0 mln in nominal value. The proceeds received will be used to finance its acquisition of land, investment assets, property development projects, refinance existing and future borrowings, and/or to fund its working capital. (The Edge Daily)

• Paragon Globe Bhd has announced the resignation of its Chairman, Datuk Tan Eng Boon who is also currently facing graft charges for bribing former Federal Territories Minister Datuk Seri Tengku Adnan Tengku Mansor in relation to a property project in Kuala Lumpur. (The Edge Daily)

• Mesiniaga Bhd has secured a four-month contract worth RM27.4 mln from Xiddig Cellular Communications Sdn Bhd for works in the Malaysia International Internet Gateway (EG-IIM) project. The project entails the delivery of lab equipment and site preparation for the EM-IIG Project's service testing and verification. (The Edge Daily)

• YTL Power International Bhd has added two members into its board of directors, mainly former secretaries-general of two Ministries, Datuk Seri Long See Wool and Datuk Loo Took Gee.

• Former Transport Ministry secretary general Datuk Seri Long has been appointed as an independent and non executive Director of the group. Datuk Loo Took Gee, meanwhile, was the secretary-general of the Energy, Green Technology and Water Ministry from August 2010 to August 2016 and advisor to the Minister between September 2016 and September 2017. (The Edge Daily)

• Scientex Bhd's 1QFY19 net profit dropped 25.9% Y.o.Y to RM53.7 mln, from RM72.4 mln in the same period last year, dragged down by lower revenue from the group's property business. Revenue, however, rose 9.0% Y.o.Y to RM713.6 mln, from RM655.0 mln last year. (The Star Online)

• The trading of Red Sena Bhd shares will be suspended from 16th January 2019, to pave the way for the group’s extraordinary general meeting (EGM) on the proposed voluntary wind-up and liquidation processes.

• If shareholders approve the proposed resolutions, the suspension of trading of the company's shares will continue until the company is de-listed from the official list of Bursa Securities. (The Star Online)

• CLIQ Energy Bhd, which is in the midst of liquidation, has announced that the final distribution of the remaining monies in the cash trust account will be made to shareholders next month. The SPAC had obtained tax clearance from the Inland Revenue Board on 17th December 2018, clearing its final hurdle for the final distribution of the remaining monies. (The Edge Daily)

• Astro Malaysia Holdings Bhd’s-unit, MEASAT Broadcast Network Systems Sdn Bhd (MBSN), has secured an RM300.0 mln term loan from AmBank (M) Bhd. The term loan will be used to finance MBSN's production, purchase and licensing of content/programmes/channels, to purchase set-top boxes (including the settlement of vendor financing), for capital expenditure — including asset acquisition for broadcast and transmission and acquisition of software and platforms, and/or for lending to any member of the Astro Group. (The Edge Daily)

• Gabungan AQRS Bhd has appointed Tera Realty as an exclusive international marketing agent in China for its One Jesselton Waterfront Condominium and Service Residence in Kota Kinabalu, Sabah for three months, starting from 1st March 2019. The appointment also comes with an option to extend for another three months. (The Edge Daily)

• Fiamma Holdings Bhd has re-designated its Non-Executive Director, Datuk Bahar Ahmad as its new Independent and Non Executive Chairman, effective 28th December 2018. He is replacing Datuk Sri Azizan Husain who has resigned(The Edge Daily)

• Prestar Resources Bhd is planning to buy a 8,093 sq. m. freehold land in Rawang, together with a three-storey building and a single-storey warehouse built upon it, for RM14.5 mln to expand its pallet racking business. (The Edge Daily)
• Loss-making FSBM Holdings Bhd has announced that it is unable to issue its FY18 annual report for the financial year ended 30th June,2018 (FY18), this time by 31st December 2018, for the fourth time.

• The group said that it is still striving to resolve outstanding issues relating to the recoverability of certain trade and other receivables,and added that more time is required to complete the outstanding financial statements and to issue and submit its Annual Report 2018 by 29th March next year. (The Edge Daily)  

Source: Mplus Research - 31 Dec 2018