• Tracking the positive sentiment on Wall Street overnight, the FBM KLCI (+1.4%) extended its’ gains as the key index was swift to recover all its’ intraday losses to hover mostly in the positive territory yesterday. The broader market, however, edged mostly lower as the FBM Fledgling and FBM ACE slipped 0.1% and 1.1% respectively, while the broader market closed mostly higher.

• Market breadth turned positive as advancers outdone decliners on a ratio of 423-to-417 stocks. Traded volumes, however, rose 6.7% to 2.50 bln shares as amid the positive market sentiment.

• More than half of the key index components advanced, led by Public Bank (+56.0 sen) followed by IHH (+48.0 sen), Hong Leong Bank (+40.0 sen), PPB Group (+28.0 sen) and Hong Leong Financial Group (+26.0 sen). Leading the broader market winners list were Fraser & Neave (+RM1.46), Heineken (+50.0 sen), KESM Industries (+35.0 sen), Calrsberg (+30.0 sen) and Batu Kawan (+12.0 sen).

• On the flipside, BAT (-30.0 sen), United Plantations (-20.0 sen), Panasonic (- 12.0 sen), Chin Teck Plantations (-10.0 sen) and Quality Concrete (-10.0 sen) declined on the broader market. There were only five losers on the FBM KLCI – Tenaga (-4.0 sen), Dialog (-1.0 sen), Digi (-1.0 sen), Genting Malaysia (-1.0 sen) and Press Metal (-1.0 sen).

• Asia benchmark indices closed mostly lower as the Nikkei slipped 0.6% after the government announced to trim new bond issuance in next fiscal year. The Shanghai Composite (-0.2%) halted a three-day winning streak, but the Hang Seng Index gained 0.2% in a volatile trading session. ASEAN stockmarkets, meanwhile, on closed on a mixed note yesterday.

• U.S. stockmarkets finished mixed as the Dow (-0.1%) slipped into the negative territory in the final trading hour as U.S. President Donald Trump impeachment proceedings came underway. On the broader market, the S&P 500 declined 0.04%, but the Nasdaq finished at another fresh record high levels after rising 0.1%.

• Major European indices closed mostly lower as the CAC and DAX extended their losses by 0.2% and 0.5% respectively on renewed concern over a hard Brexit. The FTSE (+0.2%), however, extended its’ gains, lifted by the weaker British Pound against the Greenback.
  
  THE DAY AHEAD

• The FBM KLCI continued to trend higher, taking cue from gains on Wall Street overnight as investors remain on course to bargain hunt on recent beaten down stocks. However, we reckon that yesterday’s gains were merely window dressing activities and there are no changes to Bursa Malaysia’s fundamental outlook over the near term.

• Therefore, we expect bouts of profit taking to set in towards the end of the week after some substantial gains over the past two trading days. Already, we are seeing some pullback activities amongst certain regional peers and the weakness may permeate into stocks in Bursa Malaysia. A pullback will see the key index to be supported at the 1,559 level. On the flipside, any upside is expected to be capped towards the 1,610 level.

• With the overbought position still looming on the lower liners, we think that the pullback may continue as investors digest their recent upturn. At the same time, we continue to like the construction sector following the revival of mega infrastructure projects, whilst crude oil prices hovering at three-month high may garner stronger trading interest within the energy sector.
  
  COMPANY BRIEF

• Datasonic Group Bhd’s Managing Director (MD) Datuk Abu Hanifah Noordin has sold off 13.8% of his equity stake (or 186.4 mln shares) worth RM121.2 mln via three off-market trades on 18th December, 2019. Prior to this, he was the single largest shareholder of the group. (The Edge Daily)

• Yinson Holdings Bhd’s 3QFY20 net profit jumped 24.0% Y.o.Y to RM54.0 mln, from RM43.4 mln in the previous year’s corresponding quarter, on the back of lower administrative and tax expenses, even as revenue fell 9.0% Y.o.Y to RM241.0 mln, from RM265.6 mln.

• Cumulative 9MFY20 net profit, however, declined by 18.0% Y.o.Y to RM145.0 mln vs RM177.5 mln a year ago, while revenue lost 11.0% Y.o.Y to RM663.4 mln, from RM747.3 mln earlier.

• Separately, the group has completed the performance testing of its latest floating production, storage and offloading (FPSO) vessel, FPSO Helang, and has commenced chartering rates on 6th December, 2019. The group has also achieved timely delivery of first oil production 19 months after signing the contract for delivery of the FPSO facility with client JX Nippon Oil & Gas Exploration (Malaysia) Ltd. FPSO Helang is operating in Block SK10, offshore Miri and it is the Yinson’s maiden entry into the Malaysian offshore oil and gas market. (The Star Online)

• George Kent (Malaysia) Bhd's 3QFY20 net profit halved to RM10.3 mln compared to RM20.6 mln a year ago, weighed down by weaker performance from its engineering and construction division. Quarterly revenue also fell 29.6% Y.o.Y to RM72.9 mln, from RM103.6 mln a year ago. Even so, the group has declared a second interim dividend of one sen per share, payable on 5th February, 2020, bringing total dividend for the year to 2.5 sen per share. (The Edge Daily)

Source: Mplus Research - 19 Dec 2019