• The FBM KLCI (+0.2%) trended higher for the third straight session, supported by the positive development over SinoU.S. trade progress. Consequently, the key index rose 0.2% W.o.W. The positive sentiment also spilled over to the lower liners as the FBM Small Cap and FBM ACE climbed 0.5% and 0.4% each, while the broader market ended mostly positive, led by the Technology sector (+1.8%).

• Market breadth turned positive as advancers won decliners on a ratio of 5- to-4 stocks. Traded volumes rose 18.0% to 2.94 bln shares amid the positive market sentiment

• Close to half of the key index components advanced, led by oil & gas and banking heavyweights like Petronas Gas (+54.0 sen), Hong Leong Bank (+26.0 sen), Petronas Chemicals (+17.0 sen) and CIMB (+7.0 sen), while Tenaga climbed 4.0 sen. Plantations companies like Batu Kawan (+40.0 sen), United Plantations (+38.0 sen) and Sungei Bagan Rubber (+19.0 sen) advanced on the broader market. Pestech added 3.0 sen after bagging a contract from Philippines.

• Notable decliners on the broader market losers include consumer products stocks like QL Resources (-33.0 sen), Dutch Lady (-30.0 sen) and BAT (-28.0 sen), while Genting Plantations and Prolexus shed 24.0 sen and 13.5 sen each. Major decliners on the local bourse were Nestle (-80.0 sen), Malaysia Airport Holdings (-34.0 sen), Petronas Dagangan (-24.0 sen), MISC (-8.0 sen) and Maxis (-5.0 sen).

• Asia benchmark indices reacted positively on the Sino-U.S. trade progress as the Nikkei jumped 2.6% to close marginally above the 24,000 psychological level. The Shanghai Composite jumped 1.8%, while the Hang Seng Index (+2.6%) marked its’ third straight winning streak. ASEAN equities, meanwhile, finished higher.

• U.S. stockmarkets eked out minor gains as the Dow rose 0.01% as investors digested the details of “Phase One” trade deal between U.S. and China, whilst gains were capped by the sluggish retail sales data that rose 0.2% Y.o.Y in November 2019 - below economists’ estimates of 0.5% Y.o.Y rise. On the broader market, both the S&P 500 (+0.01%) and Nasdaq (+0.2%) closed at fresh record high level

• Major European indices advanced, welcoming the positive news on U.S.- China trade deal. The FTSE jumped 1.1% after U.K. Prime Minister Boris Johnson’s Conservative Party scored a landslide victory in the general election, while the CAC and DAX gained 0.6% and 0.5% respectively.
  
  THE DAY AHEAD

• The partial U.S.-China trade deal has provide some juice to boost the global equities sentiment as investors flocked into the equities market. Still, investors are pondering whether the “phase one” trade deal is as robust as market expectations and the “phase two” of trade deal might not even take place till after the U.S. election on 3rd November 2020. Nevertheless, the outcome of U.K. election has removed the uncertainty over Brexit that was floating over the past year.

• The FBMKLCI managed to hang on to its’ gains on last Friday although there were signs of quick profit taking activities. After three consecutive days of advance, the FBM KLCI may experience some minor pullback activities with key support located at the 1,560 level. With the key index still trading in a downtrend bias mode, any gains will be capped towards the 1,580 level for now.

• We expect the lower liners may continue to see rotational plays as we head towards the year end. As expected, the technology sector that was in a consolidation mode has garnered strong trading interest on last Friday and gains may continue to roll in the foreseeable future.
  
  COMPANY BRIEF

• Gamuda Bhd‘s 1QFY20 net profit inched higher to RM173.6 mln, from RM172.0 mln a year ago, following weaker performance from its Malaysian operations, although revenue grew 21.0% Y.o.Y to RM1.09 bln, from RM903.88 mln previously. The group has also declared an interim dividend of six sen per share. (The Star Online)

• Dialog Group Bhd has purchased another 20.0% equity stake in Halliburton Bayan Petroleum Sdn Bhd (HBP), the contractor employed by Petronas Carigali Sdn Bhd to enhance the recoverable reserves from the Bayan Field in Bintulu, Sarawak.

• Dialog has inked a supplemental share purchase agreement with Asia Energy Services Sdn Bhd (AES) to acquire the additional stake for US$6.6 mln (RM27.2 mln).

• This comes on the heels of the share purchase agreement signed with AES on 16th August, 2019 to buy a 25.0% equity interest; resulting in HBP becoming a 75.0%-owned indirect subsidiary of Dialog, with the balance 25.0% held by AES. (The Edge Daily)

• Scomi Energy Services Bhd's unit KMCOB Capital Bhd has defaulted on redemption of bonds worth RM55.0 mln but will continue to pay the coupon on the Series E of the bond.

• To recap, the group had accepted a letter of offer from MIDF Amanah Investment Bank Bhd on 10th December, 2019 to provide a bridging financing to repay the RM55.0 mln worth of bonds, but it had insufficient time to fulfil the conditions precedent and security arrangement for the drawdown of the bridging financing before the payment date.

• Nevertheless, it noted that there is no legal implication at this stage as no legal action has been taken by the trustee of the bondholders — TMF Trustee Malaysia Bhd — or Danajamin Nasional Bhd. (The Edge Daily)

• KUB Malaysia Bhd‘s President and Managing Director (MD) Datuk Abdul Rahim Mohd Zin has tendered his resignation to pursue other interests and will be replaced by group Chief Financial Officer (CFO) Ahmed Fairuz Abdul Aziz.

• Meanwhile, Ahmed Fairuz had served as the group's CFO since 2016 and was previously the group CFO of Naza Corp Group of companies between 2012 and 2015. (The Star Online)

Source: Mplus Research - 16 Dec 2019