• The FBM KLCI (-0.2%) retreated alongside with the weakness across global equities as the U.S. voted to impeach President Donald Trump. The lower liners – the FBM Small Cap (- 0.9%) and FBM Fledgling (-0.5%) also retreated, while the broader market finished mostly lower with the technology sector (-3.2%) taking the heaviest beating.

• Market breadth returned to negative as decliners override advancers on a ratio of 574-to-293 stocks. Traded volumes fell 15.7% to 2.11 bln shares as traders turned cautious on the negative market momentum.

• Key losers on the local bourse were IHH (-39.0 sen), Petronas Gas (-20.0 sen), RHB Bank (-7.0 sen), Tenaga (-6.0 sen) and Axiata (-5.0 sen). Notable decliners on the broader market were Fraser & Neave (-34.0 sen), Lebtech (-34.0 sen), KESM Industries (-19.0 sen) and Ajinomoto. Inari sank 27.0 sen following reports that Apple’s supplier, Boardcom Inc. looks to sell one of their wireless chip units.

• On the other side of the trade, notable winners on the broader market include Dutch Lady (+48.0 sen), Carlsberg (+22.0 sen), Heineken (+20.0 sen), Quality Concrete (+17.0 sen) LPI Capital (+16.0 sen). Meanwhile, Nestle (+RM2.80), PBB Group (+28.0 sen), Hong Leong Bank (+6.0 sen), Hong Leong Financial Group (+6.0 sen) and KLK (+6.0 sen) advanced on the FBM KLCI.

• Asia benchmark indices finished mostly lower following the decision to send U.S. President Donald Trump’s case to the Senate for trial. The Nikkei (-0.3%) extended its’ losses after Bank of Japan kept interest rate unchanged. The Hang Seng Index declined 0.3%, while the Shanghai Composite closed on a flat note. ASEAN stockmarkets, meanwhile, on ended mostly red on Thursday close.

• U.S. stockmarkets closed at fresh record high levels as the Dow rose 0.5% as investors dismissed the impeachment of U.S. President Donald Trump and focused on the U.S.-China trade relations. On the broader market, the S&P 500 (+0.5%) finished above the 3,200 psychological level, while the Nasdaq gained 0.7%.

• Earlier, European benchmark indices finished mostly higher as the FTSE and CAC added 0.4% and 0.2% respectively as the former saw Bank of England held the benchmark interest rate unchanged. The DAX, however, remain in the red, falling 0.1% as German automakers Daimler and BMW looks to exit the North American market.
  
  THE DAY AHEAD

• U.S. House of Representatives decision to impeach President Donald Trump has raise fresh uncertainty over the political instability as global equities reacted negatively. Going into the last trading day of the week, we expect a recovery to take place as investors shifted their focus onto the Sino-U.S trade deal.

• Although the underlying sentiment has turned weaker yesterday, we think that the year-end window dressing activities that were evident over the past couple of days may resume. Already, the FBM KLCI recovered most of its’ intraday losses yesterday, suggesting that institutional investors continue to provide some support to the local equities. As such, we see the key index marching higher to retest the 1,600 psychological level to head towards the 1,614 resistance level. In the meantime, support will be pegged at the 1,580 level.

• At the same time, the lower liners and broader market shares are also poised to end the week on a stronger note on mild bargain hunting from yesterday’s fall. Retail participation, however, remains thin and this is set to continue as investors retreat ahead of the mid-week festive break on next week.
  
  COMPANY BRIEF
• Aeon Credit Service (M) Bhd’s 3QFY20 net profit lost 20.0% Y.o.Y to RM69.9 mln compared to RM87.1 mln in the last corresponding year, weighed down by higher operating and funding costs, despite the 15.0% Y.o.Y growth in revenue to RM402.5 mln, from RM348.5 mln in 3QFY19.
• Cumulative 9MFY20 net profit also lost 24.0% Y.o.Y to RM203.7 mln, from RM267.0 mln last year, on the back of higher impairment losses on financing receivables. Revenue, however, was 18.0% Y.o.Y higher at RM1.19 bln, from RM1.01 bln earlier. (The Edge Daily)

• Axiata Group Bhd’s units Axiata Investments (UK) Ltd and Ncell Private Ltd have been granted a provisional measure from an international Tribunal preventing the Nepalese government demanding Ncell to pay in NPR22.45 bln (RM818.0 mln) in outstanding capital gain tax (CGT). The order also restrains the Axiata units from taking any steps that would alter the status quo between them and the Nepalese government or to aggravate the dispute. To recap, the Nepalese government is claiming US$1.37 bln arising from Axiata Investments (UK)’s acquisition of Reynolds Holdings Ltd, which owns Ncell.(The Edge Daily)

• Eastern & Oriental Bhd (E&O) plans to raise up to RM1.5 bln via a sukuk programme to fund the costs of land reclamation, infrastructure and development of its Seri Tanjung Pinang 2 (STP2A) development in Penang. The group added that a detailed masterplan is currently being finalised for STP2A. The sukuk is unrated and has a 25 years tenure.

• The Minister of Finance (Incorporated)’s [MoF Inc] plans to takeover Gamuda Bhd’s four highway concessions has been extended again for the third time to 29th February, 2020 from 31st December, 2019. The first deadline for deal was 30th August, before it was extended to 31st October, 2019 and then to New Year’s Eve. The aforementioned highways are Lebuhraya Damansara Puchong (LDP), Sistem Penyuraian Trafik KL Barat (Sprint), Lebuhraya Shah Alam (Kesas) and Smart Tunnel. (The Star Online)

• Guan Chong Bhd is buying Schokinag Holdings GMBH (SHG), a European chocolate maker for €29.9 mln (RM137.8 mln) as part of its global expansion strategy. The acquisition, which will be funded via internal funds, is expected to be completed in 1Q2020. (The Star Online)

• MyNews Holdings Bhd’s 4QFY19 net profit halved to RM3.2 mln, from the RM6.1 mln a year earlier, as its new food processing centre remains under the gestational period. Revenue, however, gained 27.7% Y.o.Y to RM139.8 mln, from RM109.5 mln last year.

• Full-year net profit rose marginally by 1.2% Y.o.Y to RM26.8 mln, from RM26.5 mln previously, while revenue jumped 34.4% Y.o.Y to RM528.5 mln vs RM393.6 mln last year. (The Star Online)

• Puncak Niaga Holdings Bhd has received two bills of demand from the Royal Malaysian Customs Department for Goods and Services Tax (GST) payments amounting to RM5.3 mln for the period from 1st February, 2016 to 31st December, 2017. (The Edge Daily)

Source: Mplus Research - 20 Dec 2019