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Author: MalaccaSecurities   |   Latest post: Mon, 9 Dec 2019, 9:30 AM

 

Mplus Market Pulse - 16 Jul 2019

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Still Consolidating

  • The local key-index (+0.2%) reversed its earlier intraday losses, buoyed by buying-support in the eleventh hour although gains were capped by losses in Hartalega, in-tandem with the stronger Ringgit. All of the lower liners – the FBM Small Cap (+0.5%), the FBM Fledging (+0.2%) and the FBM Ace (+1.0%) rallied. The broader market also closed mostly higher at the closing bell.
  • Market breadth was still subdued as decliners beat the advancers on a ratio of 469-to-375 stocks, while 406 stocks flatlined. Traded volumes inched 2.6% higher to 3.01 bln shares, supported by renewed buying interest in the lower liners.
  • Leading the key-index higher was Nestle (+40.0 sen), Tenaga Nasional (+20.0 sen), Genting Malaysia (+10.0 sen), Malaysia Airports (+6.0 sen) and Dialog (+6.0 sen). Broader market winners, meanwhile, were BAT (+RM1.02), Malaysian Pacific Industries (+26.0 sen), G3 Global (+17.0 sen), Pintaras Jaya (+13.0 sen) and Allianz (+10.0 sen).
  • In contrast, Dutch Lady (-40.0 sen), Panasonic Manufacturing (-30.0 sen), KESM Industries (-21.0 sen), Sam Engineering (-18.0 sen) and Y&G Corporation (-18.0 sen) were the broad market losers. Heavyweights’ decliners include Petronas-linked stocks like Petronas Dagangan (-14.0 sen) and Petronas Chemicals (-6.0 sen), followed by Kuala Lumpur Kepong (-6.0 sen), Press Metal (-6.0 sen) and Hartalega (- 7.0 sen) amid the depreciating Greenback.
  • Chinese equities rallied on Monday on better-than-expected industrial and retail data. The Nikkei was closed for a public holiday, while the Shanghai Composite advanced on hopes of further government stimulus. The Hang Seng Index also added 0.3%, while most ASEAN bourses ended positively.
  • U.S. equities eked-out gains after clawing back earlier losses as investors digested fresh corporate earnings from Citigroup as the earnings season gets underway. The Dow and the Nasdaq rose 0.1% and 0.2% respectively, while the S&P 500 flatlined, weighed down by losses in financial shares.
  • U.K. stockmarkets closed mostly in the positive territory, on gains in miners. The FTSE rose 0.3% - boosted by miningrelated stocks and weaker Pound, albeit slightly offset by losses in energy producers. The DAX and the CAC also gained 0.5% and 0.1% respectively.

THE DAY AHEAD

  • Global market conditions are becoming increasingly indifferent with the lack of fresh leads as market participants await for developments on the U.S-China trade negotiations now that the odds of a U.S. interest rate cut is largely priced-in after the recent run-up in global equities.
  • Back home, the FBM KLCI’s consolidation trend is still unfolding after its bout of overbought, but saw some mild support yesterday. This could extend its mild recovery over the near term as it looks to arrest some of its recent pullback.
  • However, there are also few significant fresh leads to provide the lift for markets and the key index could again be left on a drifting mode for longer. In the interim, the resistances remain at the 1,676 and 1,680 levels, while the supports are at 1,664 and 1,660 respectively.
  • The FBM Small Cap Index, however, is still on a purple patch and is becoming increasingly overbought which we continue to think that a pullback is already overdue. For now, however, it appears that the uptrend could persist as there are still no signs of a pullback as yet.

COMPANY BRIEF

  • Bina Puri Holdings Bhd's has secured a RM303.0 mln contract to build a duallane road in Nasirya City, Southern Iraq, boosting its order book to RM1.56 bln. Bina Puri Sdn Bhd had accepted a letter of award dated 11th June 2019 from Thi Qar Governate, Iraq for the project. The contract is for 36 months. (The Star Online)
  • LPI Capital Bhd’s 2Q2019 net profit grew 7.8% Y.o.Y to RM70.8 mln, on the back of improved contributions from the group's subsidiary, Lonpac Insurance Bhd. Revenue for the quarter rose 9.6% Y.o.Y to RM353.0 mln.
  • For 1H2019, cumulative net profit improved 7.0% Y.o.Y to RM147.9 mln. Revenue for the period climbed 6.2% Y.o.Y to RM779.6 mln. A first interim dividend of 27.0 sen a share was declared. (The Star Online)
  • Omesti Bhd is selling its 100.0% stake in systems integration and application software company Formis E Solutions Sdn Bhd to CTOS Holdings Sdn Bhd for RM26.9 mln.
  • Formis' core activities are application software, system integration services and the provision of hardware and software maintenance services. However, it has been dormant since 2014. Formis also holds 16.0% in RAMCI which provide reporting business, credit bureau and information services. The original cost of investment in Formis was RM12.5 mln in October 1993. (The Star Online)
  • Berjaya Land Bhd (BLand) is buying a 75.0% stake in Icelandair Hotels in a US$53.6 mln (RM222.0 mln) deal that would allow the group to enter the luxury hotel segment in Iceland. The proposed acquisition is in line with the group’s geographical diversification and revenue expansion. (The Edge Daily)
  • Multi Sports Holdings Ltd and construction firm Southern Score Sdn Bhd have aborted plans to form a new company to take over and assume Multi Sports' listing status. The plan was part of efforts to regularise Multi Sports' finances and lift itself out of Practice Note 17 (PN17) status. The memorandum of understanding (MoU) it had signed with Southern Score has lapsed on 5th July 2019 and no further extension was sought. (The Edge Daily)
  • Atlantic Blue Sdn Bhd, a 45.0%-owned associate of Chin Hin Group Bhd has proposed a listing on the ACE Market of Bursa Malaysia via a special purpose vehicle, Solarvest Holdings Bhd.
  • Solarvest acquired the entire stake in Atlantic Blue for RM26.3 mln to be satisfied via the issuance of 291.8 mln new shares in Solarvest at 9.0 sen apiece. (The Edge Daily)
  • Pegasus Heights Bhd said that its contract as a project management consultant for a 30-storey mixed commercial development at Teluk Likas, Sabah, has been terminated. The company and GE Properties Sdn Bhd both mutually agreed to cease the letter of award for the job. (The Edge Daily)
  • Tex Cycle Technology (M) Bhd is teaming up with Pakar Go Green Sdn Bhd to embark into the biochar production business. It entered into a Memorandum of Understanding with Pakar Go Green on how they will collaborate and conduct their respective and collective organisations’ business for the success of their entry into new and global markets. (The Edge Daily)
  • IJM Corp Bhd announced that Datuk Soam Heng Choon is set to retire as CEO and Managing Director of the group, to be succeeded by Liew Hau Seng effective 1st September 2019. Liew is currently the managing director of IJM’s construction division.
  • Meanwhile, Deputy Non-Executive Chairman Tan Sri Krishnan Tan Boon Seng will take over as chairman from Tan Sri Abdul Halim Ali when the latter steps down upon conclusion of IJM’s annual general meeting on 28th August 2019. (The Edge Daily)

Source: Mplus Research - 16 Jul 2019

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