Base Building

• The FBM KLCI (+0.5%) advanced alongside with its’ regional peers after traded largely in the positive territory on last Friday. The key index also marked the third day winning streak and consequently recovered all its’ weekly losses to close 0.3% W.o.W higher. Amidst the mixed broader market, the lower liners climbed mostly higher as the FBM Small Cap and FBM Fledgling added 0.3% and 0.4% respectively.

• Market breadth turned positive as advancers override the decliners on a ratio of 468-to-388 stocks. Traded volumes climbed 9.5% to 2.84 bln shares on the positive market undertone.

• Leading the FBM KLCI winners list were Petronas Dagangan (+RM1.34) and Nestle (+10.0 sen), while telco giants like Axiata (+24.0 sen), Maxis (+10.0 sen) and Digi (+8.0 sen) advanced. Notable gainers on the broader market were consumer products like Carlsberg (+36.0 sen), Heineken (+26.0 sen), Padini (+23.0 sen) and Ajinomoto (+16.0 sen), while United Plantations added 26.0 sen.

• On the flipped side Dutch Lady (-42.0 sen), BAT (-34.0 sen), Batu Kawan (-26.0 sen), Kumpulan Power (-18.0 sen) and Aeon Credit (-12.0 sen) fell on the broader market. Major decliners on the local bourse were Hong Leong Financial Group (-12.0 sen), KLK (-10.0 sen), Malaysia Airport Holdings (-6.0 sen), PBB Group (-4.0 sen) and Dialog (-3.0 sen).

• Asia benchmark indices finished higher, taking cue from the positive developments on Wall Street overnight as the Nikkei (+0.5%) extended its gains. Likewise, the Hang Seng Index rose 0.6%, while the Shanghai Composite climbed 0.1% as gain were capped by the sluggish GDP data that expanded 6.0% Y.o.Y in 4Q2019, bringing 2019 GDP growth at +6.1% Y.o.Y. ASEAN stockmarkets, meanwhile, closed mostly higher on last Friday.

• U.S. stockmarkets extended their gains to close at fresh record high levels as the Dow rose 0.2%, supported by the solid housing and labour data. On the broader market, the S&P 500 added 0.4%, while the Nasdaq finished 0.3% higher to mark a six consecutive weeks of advance.

• Earlier, major European indices – the FTSE (+0.9%), CAC (+1.0%) and DAX (+).7%), all advanced, in line with gains across global equities. In the meantime, Eurozone’s inflation rate in December 2019 rose 1.3% Y.o.Y – the highest level since June 2019.

The Day Ahead

• Much of the recent gains that stemmed from the improving trade sentiment across the globe, coupled with the resumption of big ticket infrastructure projects (KV MRT2) provided relieve on the FBM KLCI that was traded in a dour manner since the start of the year. For now, the local bourse continue to capitalise on the recent recovery as the key index attempts to build a base around the 1,600 psychological level.

• The renewed positive sentiment has attracted fresh funds into the Malaysian equities as demonstrated by the rising trading activities, in terms of both trading volume and value. We expect the recovery to remain firm over the foreseeable future may take another stab towards the 1,600 psychological level. Beyond that, further gains is expected at the 1,615 level. At the same time, the 1,575 will serve as the immediate support level, followed by the 1,570 level.

• The lower liners and broader market shares are also staging a rebound and may continue to pick-up some gains over the near term. The rotational play is likely to continue as we head towards the festive shortened weekend break.

COMPANY BRIEF

• MMC Corp Bhd and Gamuda Bhd have been re-designated as the joint turnkey contractor of the Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya (SSP) line (MRT2), from the project delivery partner (PDP) previously. The jointventure (JV) unit MMC Gamuda KVMRT (PDP SSP) Sdn Bhd (MMC-Gamuda) has inked a supplemental agreement to the PDP agreement with Mass Rapid Transit Corp Sdn Bhd (MRT Corp), to formalise the role of MMC-Gamuda to deliver and be responsible for the design, execution and completion of the entire SSP Line (for both above ground and underground) on a turnkey basis. (The Edge Daily)

• VisDynamics Holdings Bhd was slapped with an unusual market activity (UMA) query by Bursa Malaysia over the sharp rise in its share price recently, although the former has indicated that it was not aware of any developments that could explain the sharp rise in its share price. (The Star Online)

• FGV Holdings Bhd has announced that the decision by the complaints panel (CP) of the Roundtable on Sustainable Palm Oil (RSPO) to re-suspend its Kompleks Serting and put on hold the ongoing new certification processes at 23 other complexes would not have a significant impact on the group and its subsidiaries as it still has 33 mills which were certified earlier. (The Edge Daily)

• MRCB-Quill REIT's (MQREIT) 4Q2019 net loss stood at RM24.4 mln, from a net profit of RM8.1 mln a year earlier, following lower gross revenue and net property income, besides a RM36.7 mln fair value loss for its investment properties across the Klang Valley and Penang. Gross revenue also fell to RM40.6 mln, from RM41.8 mln a year ago.

• Consequently, the group’s full-year net profit fell to RM29.1 mln, from RM73.1 mln a year earlier, while revenue decreased to RM161.0 mln, from RM172.5 mln earlier. (The Star Online)

• Kumpulan Perangsang Selangor Bhd (KPS) has appointed Datuk Nor Azmie Diron as its new Chairman, effective 17th January, 2020; replacing Raja Shahreen Raja Othman, who has resigned following the end of his contract as Chief Executive Officer (CEO) of KPS' largest shareholder Menteri Besar Selangor Inc (MBI). (The Edge Daily)

• The Securities Commission Malaysia (SC) has directed Bursa Malaysia to suspend Atta Global Group Bhd and Heng Huat Resources Group Bhd's securities trade after the Royal Malaysia Police seized trading accounts belonging to several key individuals involved in these companies. (The Star Online)  

Source: Mplus Research - 20 Jan 2020