Ready, Get Set, Go!

• Despite ending 2019 on a weaker note, the FBM KLCI jumped today, boosted by buying-support in selected banking stocks. Taking cue from the Main Board, all the lower liners also rallied, with the best performer being the FBM Ace (+3.2%), alongside the broader markets.

• Market breadth was upbeat as winners almost doubled the losers, while traded volumes spiked 48.8% to 3.36 bln shares, following upbeat sentiment in the global stockmarkets amid easing trade tension.

• Top performing stocks on the FBM KLCI were Public Bank (+46.0 sen), Petronas Gas (+34.0 sen), Kuala Lumpur Kepong (+30.0 sen), Hong Leong Financial Group (+22.0 sen) and Maybank (+11.0 sen). Other gainers, meanwhile, include Carlsberg (+46.0 sen), Chin Teck Plantations (+35.0 sen), Allianz (+32.0 sen), KESM Industries (+32.0 sen) and Public Packages (+21.0 sen).

• On the downside, Fraser & Neave (-48.0 sen), United Plantations (-28.0 sen), Aeon Credit (-14.0 sen), UEM Edgenta (- 12.0 sen) and G3 Global (-12.0 sen). Heavyweights decliners, meanwhile, were Petronas Dagangan (-14.0 sen), RHB Bank (-4.0 sen) and Malaysia Airports (+2.0 sen), followed by major glove makers like Hartalega (-13.0 sen) and Top Glove (-5.0 sen).

• Mainland stockmarkets were mostly upbeat after the PBOC ramped up liquidity by injecting about US$115.0 bln into the market, following its move to cut the required cash reserve ratio for banks. The Shanghai Composite rose 1.2%, albeit weighed down by Kweichow Moutai on expectations of weaker earnings performance in 2019, together with the Hang Seng Index (1.3%). Markets in Japan remained closed for the public holidays, while the ASEAN stockmarkets closed with minor losses.

• Wall Street also marked fresh record highs amid the New Year rally, following renewed trade optimism and increased government stimulus from China. Gains in Boeing and Apple pushed the Dow (+1.2%) higher, together with the S&P 500 (+0.8%) and the Nasdaq (+1.3%).

• Main European indices advanced, tracking the positive sentiment in the global stockmarkets. The FTSE gained 0.8%, boosted by mining-related stocks like Glencore and Antofagasta, while the DAX and the CAC rose 1.0% and 1.1% respectively.

THE DAY AHEAD

• With global markets still on the climb, we see Malaysian stocks following suit over the near term and extending its gains at the start of the year. As it is, global equities are still riding on the positive sentiments brought about by the approval of the U.S. and China trade progress. Malaysian stocks are also seeing a revival on the upbeat manufacturing data that rose to the highest level over a year, coupled with the rising Ringgit against the Greenback that notched the highest level since April 2019.

• Under the prevailing economic sentiment, we think the gains may prolong and we expect the 1,635 resistance level to be retested over the near term. In the meantime, the 1,590 will serve as the immediate support level.

• We reckon that upside on the lower liners will continue as investors return from the year-end break. We continue to think that they will make a beeline to the market and pick-up speculative plays, taking advantage of the more positive market environment to undertake increase trading activities. However, the toppish condition warrants a pullback to allow investor to digest their recent strides of gains.

COMPANY BRIEF

• Gamuda Bhd and a Taiwanese company Dong-Pi Construction Co. Ltd have secured a RM932.0 mln contract to build a seawall for the Taipei port and a dike project. The scope of the works involved building 4,014m seawall structures, dismantling existing seawall structures (954m) and Southport shore protection works. The contract period is 60 months, starting January 2020 and is expected to be completed by January 2025. (The Star Online)

• DBE Gurney Resources Bhd’s Managing Director (MD) Datuk Ding Seng Huat has resigned, so he can focus on the poultry business. Meanwhile, executive director Datuk Doh Jee Ming has been redesignated on 1st January 2020 as DBE Gurney’s MD. (The Edge Daily)

• Kerjaya Prospek Group Bhd is buying two plots of adjoining land, measuring 4.3-ha in Rawang, from executive chairman and major shareholder Datuk Tee Eng Ho and his brother, executive director Tee Eng Seng, for RM10.0 mln. The group had been renting the plot for RM15,000 a month for two years, from a company owned by the Tee brothers, before being extended to a monthly rental charge of RM16,500. The acquisition will save the group RM198,000 a year. (The Edge Daily)

• Metronic Global Bhd has been served with a suit by its single largest shareholder Tan Sri Lee Kim Yew. The suit was served via a counterclaim by Lee, who is seeking a declaration that the affairs of the group are done in a manner oppressive to him. Lee is also seeking a similar declaration pertaining to the powers of directors that are being exercised. Lee is also petitioning for the allotment and the issuance of executives’ share option scheme (ESOS) in June 2019, and a private placement in October 2019 to be declared void. (The Edge Daily)

• Puncak Niaga Holdings Bhd is filing a judicial review application against the Royal Malaysian Customs Department’s demand for goods and services tax payments, amounting to RM5.3 mln. On 19th December 2019, the customs had issued two bills of demand to its whollyowned unit Puncak Niaga Management Sdn Bhd (PNMSSB) for the period 1st February 2016 to 31st December 2017, amounting to RM5.3 mln. (The Edge Daily)

• Rohas Tecnic Bhd’s largest shareholder and Chairman Tan Sri Wan Azmi Wan Hamzah has resigned on account of personal reasons. His son Wan Afzal-Aris Wan Azmi also ceased to be an alternate director, following his father’s resignation that took effect on 1st January 2020. Deputy Chairman Sia Bun Chun has been made the group’s new non-independent and non-executive chairman. Wan Azmi is still Rohas Technic’s largest shareholder, controlling a 43.0% stake, of which 13.9% is held directly by the tycoon. (The Edge Daily)

• Tambun Indah Land Bhd's founder and MD Teh Kiak Seng, 70, has been redesignated as executive deputy chairman, with his son Teh Deng Wei taking over his father’s role as MD. Deng Wei’s aunt and Kiak Seng’s sister, Teh Theng Theng, is also an executive director. (The Edge Daily)

Source: Mplus Research - 3 Jan 2020