Selling To Abate

• After lingering in the negative territory for the entire session, the FBM KLCI closed 0.5% lower amid a stronger USD and renewed concerns of slower Chinese economic growth. Most of the lower liners eked-out gains, but the FBM Small Cap (-0.1%) stumbled and snapped two sessions winning streak, while the broader market was mostly negative.

• Market breadth remained soft as decliners held the upper-hand against the winners on a ratio of 470-to-352 stocks. Traded volumes also fell 17.9% to 2.58 bln shares due to the lack of fresh trading catalysts.

• Significant losers on the Main bourse were Nestle (-RM1.80 sen), Tenaga Nasional (-16.0 sen), Hartalega (-11.0 sen), Hong Leong Financial Group (-6.0 sen) and CIMB Group (-5.0 sen). Other decliners, meanwhile, consists of Scientex (-29.0 sen), United Plantations (- 18.0 sen), Warisan TC (-17.0 sen), New Hoong Fatt (-15.0 sen) and Harrisons (- 10.0 sen).

• In contrast, Dutch Lady (+82.0 sen), Carlsberg (+56.0 sen), Batu Kawan (+40.0 sen), BAT (+26.0 sen) and Aeon Credit (+18.0 sen) rallied. Key-index winners, meanwhile, include Petronas Dagangan (+20.0 sen), IHH Healthcare (+10.0 sen), Press Metal (+3.0 sen), Genting Malaysia (+2.0 sen) and Hong Leong Bank (+2.0 sen).

• Key regional benchmark stockmarkets closed mixed on Tuesday, taking cue from the weak close on Wall Street overnight. China’s blue-chip gauge - the Shanghai Composite (+0.9%) finished higher as investors cheered the latest tax cuts and business friendly government policies amid the government’s efforts to shore up China’s economy, while the Hang Seng index flatlined. In contrast, the Nikkei ended into red, weighed down by losses in information technologyrelated stocks amid mixed sentiment in the ASEAN equities.

• U.S. stockmarkets zigzagged in-and-out of the positive territory but closed virtually unchanged ahead of the U.S. payrolls and the Federal Reserve’s beige book reports. The Dow and the S&P 500 ended lower by 0.1%, while the Nasdaq was flattish at 7,576.4 points.

• London’s main board the FTSE (+0.7%) notched gains, buoyed by gains in GVC (+7.1%) after the latter posted strong quarterly earnings, while a weaker Pound buoyed exporters. Other European peers – the DAX and the CAC followed suit, adding 0.2% each.

The Day Ahead

• With few impetuses, the key index is left to drift lower with the buying interest still lacking that is likely to prolong to dour trend. The recently announced corporate results were generally below expectations and are likely to leave investor interest indifferent for longer.

• Under the prevailing environment, we expect the downside bias to remain but after its streak of losses, we think the selldown is nearing overdone. Hence, we think that the selling could abate over the near term and the losses could be cushioned by fresh bouts of bargain hunting activities. On the downside, the 1,680 level is likely to provide a firmer support, followed by the 1,676 level. The resistances, meanwhile, are at 1,690 and 1,698 respectively.

• The lower liners and broader market shares are broadly on a sideway trend that shows little signs of veering at this juncture. We see the bouts of fresh buying to be tempered by some profit taking activities after many stocks made significant headway since the start of the year.

COMPANY BRIEF

• Aabar Investments PJS has put up another substantial block of shares in RHB Bank Bhd for sale as the Abu Dhabi investor continues to pare down its stake in the country's fifth-largest banking group by market value. Aabar is seeking to sell 191.0 mln shares in RHB Bank at between RM5.43 and RM5.54 apiece via a book-building exercise. This values the 4.8% stake in the bank at between RM1.04 bln and RM1.06 bln.

• Aabar owns a 14.8% stake in RHB Bank before the sale. In August 2018, Aabar sold 120.3 mln shares in RHB Bank, or about a 3.0% stake, at a price ranging between RM5.07 and RM5.18 each also via a book-building exercise. (The Star Online)

• Malayan Banking Bhd (Maybank) expects 100,000 take-ups for its newly launched Maybank Anytime Everyone (MAE) digital account platform by the end 2019. The MAE platform is the first ever product that enables users to open an account via their mobile phone. (The Star Online)

• Brahim's Holdings Bhd, which recently was classified as a Practice Note 17 (PN17) company, is planning to exit this status as soon as possible. Brahim will enter into strategic discussions with partners to review capital and business structure with the view of complying with the listing requirements as soon as practicable. Brahim will seek consultations with prospective principal advisers to formulate and submit a regularisation plan within the next three months and make necessary announcements in due course. (The Edge Daily)

• AirAsia Group Bhd’s digital venture arm, RedBeat Ventures, has set up a global venture capital fund, RedBeat Capital and formed a strategic partnership with SanFranscisco-based venture capital firm, 500 Startups. RedBeat Capital is designed to support post-seed stage startups by investing in scalable startups seeking to enter or expand their presence in Southeast Asia (SEA), with a particular focus on travel and lifestyle, logistics as well as financial technology.

• RedBeat Capital will also invest in digital enablers to support these verticals such as artificial intelligence, the Internet of things and cybersecurity. (The Edge Daily)

• Sunway Construction Group Bhd's unit, Sunway Geotechnics (M) Sdn Bhd has launched a lawsuit against Ikhmas Jaya Group Bhd's wholly-owned subsidiary Ikhmas Jaya Sdn Bhd seeking RM8.2 mln over unpaid work.

• Ikhmas Jaya and Sunway Geotechnics have discussed and agreed in principle for an out of court settlement pending finalisation of the terms and conditions of the settlement. (The Edge Daily)  

Source: Mplus Research - 6 Mar 2019