• Profit taking activities emerged as FBM KLCI (-0.6%) erased all its’ previous session gains as the key index hovered in the negative territory for the entire trading session. The lower liners, however, edged mostly higher as the FBM Fledgling and FBM ACE climbed 0.2% each, while the broader market was painted mostly in red, led by the weakness in the construction sector (- 0.6%).

• Market breadth turned negative as decliners outstripped advancers on a ratio of 4-to-3 stocks. Traded volumes decreased 19.9% to 1.57 bln shares as trading participants retreated ahead of the mid-week festive break.
   
• Close to two third of the key index constituents fell, dragged down by Nestle (-RM2.20), followed by PPB Group (-36.0 sen), Public Bank (-22.0 sen), Tenaga (-22.0 sen) and MISC (- 12.0 sen). Meanwhile, United Plantations (-44.0 sen), BAT (-20.0 sen), Carlsberg (-20.0 sen), Genting Plantations (-20.0 sen) and QL Resources (-13.0 sen) slipped on the broader market.

• Notable gainers on the broader market include Heineken (+20.0 sen), Hong Leong Industries (+20.0 sen), Ajinomoto (+14.0 sen) and Quality Concrete (+13.0 sen). Poh Kong added 1.0 sen after reporting a strong set of quarterly earnings. Key winners on the FBM KLCI were Petronas Gas (+30.0 sen), Hong Leong Financial Group (+13.0 sen), CIMB (+2.0 sen), Top Glove (+2.0 sen) and Genting Malaysia (+1.0 sen).

• Asia benchmark indices closed mostly higher as the Nikkei (+0.04%) extended its’ gains after clawing into the positive territory in the final trading hour. The Shanghai Composite (+0.7%) recovered some of the previous session’s losses, while the Hang Seng Index fell 0.2% on a half-day trading session. ASEAN stockmarkets, meanwhile, finished on a mixed note on Tuesday.

• U.S. stockmarkets retreated from their all-time high levels as the Dow (-0.1%) snapped a three-day winning streak as investors locked in recent gains on a muted Christmas Eve trading. On the broader market, the S&P 500 declined 0.02%, but the Nasdaq added 0.1% higher.

• Elsewhere, the FTSE (+0.1%) extended its’ gains, while the CAC ended relatively unchanged on a holiday muted trading session. The DAX was closed and will only re-open on Friday.

• The FBM KLCI endured bouts of profit taking on Christmas Eve as the market condition remained toppish with the key index hovering in the overbought territory. Therefore, we think that the consolidation may take precedence for now as investors look to digest their recent run-up, despite the gains in overseas equity markets.

• Further pullback may see the key index supported towards with the 1,595 level. In the meantime, any recovery will see gains limited towards the 1,621 level. Nevertheless, we see valuation emerged on the FBM KLCI as the key index trading at forward PER of 15.8x for 2020 is at the lower end against the long-term average at 17.3x.

• The lower liners and broader market shares may also undergo an overdue consolidation from overbought that we see continuing over the near term. The pullback is deemed healthy as it would allow the recent strong gains to be digested.

• Advancecon Holdings Bhd has secured a contract from Sime Darby USJ Development Sdn Bhd worth RM21.3 mln to undertake earthworks and related works in Bandar Bukit Raja 2, Klang. The works are expected to be completed by 5th April 2021. (The Edge Daily)

• ARB Bhd has aborted two Memoranda of Understanding (MoUs) for IT projects in Cambodia, following a failure to finalise the terms of proposed collaborations. The MoUs were signed on 10th July 2019. One MoU was inked with Chean Chhoeng Thai Group Co Ltd to facilitate the collaboration in the Internet of Things solutions and IT-related hardware and software in Phnom Penh.

• Meanwhile, another MoU signed with HK Yue Tai Life Insurance PLC (HKYT) to facilitate the potential collaboration in enterprise resource planning system and IT-related hardware and software for HKYT's operations in Cambodia. (The Edge Daily)

• Axis REIT has proposed to acquire a leasehold 22,528 sqm property in Bukit Raja, Klang, for RM37.0 mln from Lion Steelworks Sdn Bhd. The market value of the property is RM39.0 mln as of 28th October, 2019, while its net book value is at RM2.6 mln as of 30th June, 2019. The land is currently used to house Lion Steelwork's factory.

• Upon the acquisition, Lion Steelworks will lease the land from Axis REIT at RM225,000 a month for two years and five months, with the option to renew for another two terms of one year each. The acquisition is expected to be completed by 1Q2020. (The Star Online)
   
• Cypark Resources Bhd and consortium partner Impian Bumiria Sdn Bhd has clinched the bid to develop a large scale solar photovoltaic (LSSPV) plant of 100 megawatts of alternating current in Marang, Terengganu, from the Energy Commission.

• Four other bidders were also selected for the LSSPV plants in Malaysia, slated for commercial operation in 2021. (The Edge Daily)

• Gas Malaysia Bhd plans to implement the new average base tariff for the utilisation of the natural gas distribution system under the government's Incentive-Based Regulation framework. The approved average base tariff for the regulatory period beginning January next year until 31st December, 2022, is RM1.573 per gigajoule (GJ) per day.

• Meanwhile, the approved surcharge to the average base tariff for the period beginning 1st January, 2020 to 31st December, 2021, is 52 sen per GJ per day. The new average base tariff will be applicable for three years beginning 1st January 2020. (The Edge Daily)

• Gunung Capital Bhd has been awarded a service contract with a value of up to RM44.2 mln from the Ministry of Defence The group will provide school bus transportation for the children of armed force personnel throughout Malaysia in the south, east and north zones, Sabah and Sarawak.

• This translates into the provision of services for 77 army camps over five zones, with 233 44-seater buses and 85 25-seater buses deployed. The two-year contract will commence from 1st January, 2020; comprising 33 months of school sessions. (The Star Online)

• All 84 estates and 14 mills in Malaysia belonging to IOI Corporation Bhd have been certified under the Malaysian Sustainable Palm Oil (MSPO) standard, making it the plantation firm 100% MSPO certified. The group's final estate obtained its certification on 28th November 2019. (The Edge Daily)

• Majuperak Holdings Bhd is planning a private placement consisting of 25.7% or no more than 10.0% of the total number of issued shares, to raise funds for Capex, the repayment of bank borrowings and to finance its facility management project.

• Subsequently, about RM2.3 mln has been earmarked for a facility management project involving the provision of clinic support service in Perak Melaka, while RM1.3 mln will be used as capex for solar power plant upkeep, office renovation and the purchase of new equipment. Finally, around RM2.0 mln will be used to pare an existing overdraft facility with Bank Islam Malaysia Bhd. The proposal is expected to be completed in 1H2020. (The Edge Daily)

• Malayan United Industries Bhd (MUI) is planning to sell its 4.1ha plot of freehold land in Scotland for £7.2 mln (RM38.8 mln), for a gain of £2.9 mln (RM15.6 mln) to Scottish property developer AR Land Investments Ltd. About 50.0% of the proceeds will be used to pay bank borrowings, with the balance used for working capital.

• Upon disposal, MUI's gearing level will go down to 1.3x, from 1.4x currently, while its borrowings will be cut to RM802.8 mln, from the RM822.2 mln as at end-FY19. The sale is expected to be completed in three month time. (The Edge Daily)

Source: Mplus Research - 26 Dec 2019