• The FBM KLCI gained for the secondstraight session, backed by a lastminute push in selected heavyweights. The lower liners - the FBM Small Cap (+0.7%), the Fledgling (+0.2%) and the FBM ACE (+1.3%) reported gains, alongside majority of the broader market constituents, with the exception of Consumer Products (-0.1%), Construction (-0.4%) and Healthcare (- 0.1%).
   
• Market breadth also stayed upbeat with 460 winners against 378 losers, while traded volumes rose 4.8% to 2.34 bln shares amid year-end portfolio rebalancing activities.

• Amongst the key-index advancers were Kuala Lumpur Kepong (+30.0 sen) amid stronger crude palm oil prices, followed by Tenaga Nasional (+28.0 sen), Nestle (+20.0 sen), Petronas Dagangan (+18.0 sen) and Maybank (+11.0 sen). Broader market charttoppers, meanwhile, include Dutch Lady (+80.0 sen), Allianz (+32.0 sen), Chin Teck Plantations (+24.0 sen), Sarawak Oil Palms (+19.0 sen) and IJM Plantations (+18.0 sen).

• In contrast, Fraser & Neave (-58.0 sen), Heineken Malaysia (-32.0 sen), United Plantations (-28.0 sen), Hong Leong Industries (-14.0 sen) and Lebtech (- 14.0 sen) booked losses. On the Main Board, PPB Group (-46.0 sen), Petronas Gas (-34.0 sen), Hong Leong Financial Group (-14.0 sen), Maxis (-7.0 sen) and IHH Healthcare (-6.0 sen) also retreated.

• Regional benchmark indices were mostly positive amid the extended rally in energy prices after the U.S. launched air strikes in Syria and Iraq. The Nikkei fell 0.8%, weighed down by profit-taking activities, while the Shanghai Composite and the Hang Seng Index added 0.3% and 1.2% respectively after the PBOC cut borrowing costs. The ASEAN stockmarkets, meanwhile, closed mixed.

• Wall Street was painted red as investors took profit following the recent record rally. The Dow (-0.6%), the S&P 500 (- 0.6%) and the Nasdaq (-0.7%) were beaten down amid holiday-thinned holidays.

• European shares closed mostly in the red, weighed down by thin trading volumes ahead of the New Year holidays. Key European bourses – the FTSE (-0.8%), the DAX (-0.7%) and the CAC (-0.9%) respectively.
  
  THE DAY AHEAD

• The FBM KLCI extended its’ gains to close at fresh four-month high, supported by the continuous window dressing activities, ensuring that the recent recovery is preserved. Going into the final trading day of the year, we see further selective buying support, but gains will be capped by the weakness on Wall Street. The key index is expected to sign off 2019 on a positive note, backed by the firmer Ringgit against the Greenback, coupled with the strong commodity prices.

• We still think that the local bourse may end the month on a flourishing note as the key index looks to play catch up with the gains across global equities this year. The key index is poised to re-test the 1,621 resistance level and should the aforementioned level breached, next resistance is pegged at the 1,635 level. On the flipside, the immediate support will be located at 1,600 psychological level, followed by the 1,590 level.

• With the positive sentiment continue to lurk within the lower liners and the broader market, we reckon that rotational play may prolonged. At the same time, we do caution that the increasingly overbought condition is warrant for a pullback to allow gains to be digested.
  
  COMPANY BRIEF

• Information technology service and systems provider FSBM Holdings Bhd is now a Practice Note 17 (PN 17) company. The auditors expressed a disclaimer of opinion in the audited financial statements for 30th June 2018.

• Pursuant to PN17, it has 12 months to submit a regularisation plan to the Securities Commission Malaysia (SC) for approval, if the plan will result in a significant change in the business direction or policy of the company. The other alternative is to submit a regularisation plan to Bursa Securities and obtain Bursa Securities’ approval to implement the plan, if the plan will not result in a significant change in the business direction or policy of the company. (The Star Online)

• Carimin Petroleum Bhd has been awarded an integrated hook-up and commissioning services contract by Petronas Carigali Sdn Bhd. The contract at an undisclosed value is to last four years until 31st December 2023. (The Edge Daily)

• Cypark Resources Bhd’s 4QFY19 net profit grew 23.3% Y.o.Y to RM38.9 mln, following the adoption of Malaysian Financial Reporting Standards and a higher margin yielded from the environmental engineering and green technology and renewable energy divisions. Revenue for the quarter increased 5.4% Y.o.Y to RM99.7 mln.

• For FY19, cumulative net profit rose 11.7% Y.o.Y to RM91.3 mln. Revenue for the quarter climbed 6.8% Y.o.Y to RM376.7 mln. (The Edge Daily)

• Nexgram Holdings Bhd’s 1QFY20 net profit stood at RM67,000 vs. a net loss of RM963,000 recorded in the previous corresponding quarter, lifted by increase in revenue from the logistics division which involves the provision of handling, stockpiling, receiving and loading of dry bulk cargo services at Batu Pahat jetty, Johor. Revenue for the quarter grew 3.0% Y.o.Y to RM12.0 mln.

• Separately, independent director and former Johor police Chief Datuk Seri Rusli Ahmad, 62, has been made nonexecutive Chairman of the group. Rusli replaces Datuk Lim Siang Chai, 64, who had resigned on 27th December 2019, citing personal commitments. (The Edge Daily)

• George Kent (M) Bhd is unaware of any intention by its Chairman Tan Sri Tan Kay Hock to divest of his 4.8% direct stake and 37.4% stake in the company. The construction company was responding to an online news report on Focus Malaysia. The report said Tan was seeking to dispose of its his stake in the company but was unable to find a buyer, on account of legacy issues. George Kent is seeking legal advice on the matter. (The Edge Daily)

• Hiap Huat Holdings Bhd is purchasing a 4.1 ac. plot of leasehold land in Pulau Indah Industrial Park for RM12.0 mln to build a new waste treatment plant. The plant will allow for it to tap into new markets for scheduled waste and participate in the generating of renewable energy. The purchase will be funded via a mixture of bank borrowings and internally-generated funds. (The Edge Daily)

• Parkson Holdings Bhd’s subsidiary Parkson Retail Asia Ltd is closing down its department store in MyTOWN Shopping Centre, Cheras. A Parkson representative reported that the store would be closed on 2nd February 2020. (The Edge Daily)

• Perdana Petroleum Bhd’s rights issue of up to 1.56 bln new redeemable convertible preference shares was undersubscribed by 6.0%. The total valid applications and excess applications stood at 1.46 bln with the RCPS issued at 32.5 sen apiece, on the basis of two RCPS for every one share held. This translates into a subscription of 94.0%. The RCPS will be allotted to all applicants who have applied for the RCPS allotments and excess RCPS in full. (The Edge Daily)

• Poh Kong Holdings Bhd is upbeat on prospects for its financial year ending 31st July 2020 (FY20), in light of rising gold prices. Executive chairman and managing director Datuk Choon Yee Seiong has reported that the group is hopeful that its FY20 results will be in line with its strong 1QFY20 results. The current economic uncertainties have spurred investor interest in gold. (The Edge Daily)

Source: Mplus Research - 31 Dec 2019