Conditions Still Frail

• The FBM KLCI (-0.3%) trended lower for the third straight session as the key index closed at one-month low, dragged down by the selloff in selected banking heavyweights yesterday. The lower liners also finished mostly lower as the FBM Small Cap and FBM Fledgling shed 0.2% and 0.5% respectively, while the broader market closed mostly lower.

• Market breadth stayed negative decliners overcame the advancers on a ratio of 541-to-336 stocks. Traded volumes, however, added 1.8% to 2.65 bln shares as profit taking activities escalated.

• More than half of the key index’s constituents fell, dragged down by banking heavyweights like Hong Leong Bank (-36.0 sen), Hong Leong Financial Group (-22.0 sen), Public Bank (-8.0 sen) and Am Bank (-6.0 sen), while Sime Darby Plantations shed 12.0 sen. Notable decliners on the broader market were Dutch Lady (-66.0 sen), Sarawak Oil Palms (-18.0 sen), Hong Leong Industries (-10.0 sen), Panasonic (-10.0 sen) and Public Packages (-10.0 sen).

• Amongst the biggest winners on the broader market include Carlsberg (+40.0 sen), Dufu Technology (+33.0 sen), Allianz (+22.0 sen) MPI (+22.0 sen) and Sarawak Consolidated Industries (+21.0 sen). Meanwhile, Nestle (+10.0 sen), IOI Corporation (+4.0 sen), IHH (+3.0 sen), Maxis (+3.0 sen) and Hartalega (+2.0 sen) were the chart toppers on Tuesday.

• Asia benchmark indices closed on a mixed note as the Nikkei (+0.7%) extended its gains after the Japanese Yen plunged to eight-month low against the Greenback. The Shanghai Composite slipped 0.3%, while the Hang Seng Index fell 0.4% as investors monitor for developments surrounding the impeding U.S.-China trade agreement. ASEAN stockmarkets, meanwhile, closed mixed on Tuesday.

• U.S. stockmarkets finished on a mixed note after coming off from their intraday high as the Dow (+0.1%) barely hold on to their gains after U.S. President Donald Trump reported the tariffs on US$250.0 bln worth of Chinese goods remain on hold in 2020. The S&P 500 fell 0.2%, while the Nasdaq ended 0.2% lower.

• Earlier, European benchmark – the FTSE (+0.1%), CAC (+0.1%) and DAX (+0.04%), all closed mildly higher after enduring a choppy trading session. Gains were kept short as investors continue to monitor on the details over the U.S.-China trade agreement.

The Day Ahead

• There was no reprieve for Malaysian stocks as they continue to endure substantive selling and profit taking activities amid the market undertone that remains on the wary side. As it is, investors will continue to monitor the trade agreement between U.S. & China.

• We think that the key index may remain downbeat following the recent developments over Sino-U.S. trade progress. The weakness may pressure the local bourse towards the 1,575 level, with the next support pegged at the 1,550 level. Any gains, however, is expected to be relatively mild due to the lack of fresh leads that may shore the local bourse towards the 1,590 resistance level.

• The lower liners are undergoing a consolidation spell that looks to continue as there are fewer compelling buys after their substantive gains over the past month. Still, the consolidation has been relatively mild and the downside is well cushioned from bargain hunting activities.

COMPANY BRIEF

• Rohas Tecnic Bhd has appointed George Sia Bun Chun as its Chairman, effective 13th January, 2020, taking over from Tan Sri Wan Azmi Wan Hamzah who retired on 1st January, 2020. Concurrently, Wan Afzal Aris Wan Azmi was also appointed as the non-independent non-executive director of Rohas Tecnic, maintaining Wan Azmi's family representation on the board. (The Edge Daily)

• The trading of London Biscuits Bhd shares will be suspended from 21st January, 2020 until further notice as the group is currently in the midst of a winding-up petition. Lim San Peen of PricewaterhouseCoopers Advisory Services Sdn Bhd has been appointed as the interim liquidator. (The Edge Daily)

• Minda Global Bhd‘s Chief Executive Officer (CEO) Naresh Alagan has resigned on 14th January, 2020, after less than one year on the job, due to family reasons. To recap, the latter Naresh was appointed as CEO on 23th January last year, replacing Tan Sri Dr Palaniappan Ramanathan Chettiar, who was redesignated as group Managing Director (MD). (The Edge Daily)

• TMC Life Sciences Bhd has obtained a non-revolving credit facility of up to RM90.0 mln, with a corporate guarantee from the healthcare group. The facility was approved by OCBC Bank (Malaysia) Bhd to TMC's unit Thomson Hospitals Sdn Bhd, to fund new equipment/goods. (The Edge Daily)

• Wegmans Holdings Bhd has reported that there was a fire accident at one of its three premises in Muar at 8.30pm yesterday. As the fire was put out in less than half an hour's time, the damage was considered to be minor and had only affected one of the spraying lines and inventory work-in-progress. (The Edge Daily)

• Sime Darby Bhd‘s 36.6%-owned jointventure (JV) company Weifang Port Services Co Ltd (WPS) was ordered by China’s Maritime Court at Qingdao, Shandong Province in July 2019, to pay Chinese contractor CCCC Tianjin Dredging Co Ltd the outstanding sum of 711.0 mln yuan (or RM427.0 mln). The group also owes the latter a late payment interest that is being accrued progressively.

• To recap, Tianjin Dredging was hired by WPS to construct a 35,000 deadweight tonne (DWT) main channel in Weifang, Shandong Province. (The Edge Daily)

• TH Heavy Engineering Bhd (THHE) has received the approval from Petroliam Nasional Bhd (Petronas) to supply certain products and services to oil and gas companies in Malaysia, after a multi-year suspension due to non-performance in 2016.

• The group was awarded the Petronas license for three categories: Topside piping and structural, offshore facilities — major fabrication, and tank farms. However, the approved licence categories did not reinstate THHE as a main contractor of Petronas and the licence is valid for a three-year period ending 23rd December, 2022. (The Star Online)  

Source: Mplus Research - 15 Jan 2020