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Author: MalaccaSecurities   |   Latest post: Thu, 21 Nov 2019, 10:25 AM

 

Mplus Market Pulse - 26 Sept 2019

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  • Tracking the weakness on Wall Street overnight, the FBM KLCI (-0.2%) trended lower for the third straight session after lingering mostly in the negative territory yesterday. The lower liners – the FBM Small Cap (-0.7%), FBM Fledgling (- 0.6%) and FBM ACE (-0.5%) all slipped, while the broader market ended mostly lower.
  • Market breadth stayed negative as losers overpowered advancers on a ratio of 528-to-78 stocks. Traded volumes, however, added 11.1% to 2.19 bln shares as the selling activities escalated.
  • More than half of the key index components fell, dragged down by KLK (-14.0 sen), followed by Hong Leong Bank (-10.0 sen), Genting (-7.0 sen), Public Bank (-6.0 sen) and Petronas Gas (-6.0 sen). Notable decliners on the broader market include Aeon Credit (- 22.0 sen), Allianz (-20.0 sen), Hong Leong Industries (-16.0 sen) and Heng Yuan (-12.0 sen). George Kent fell 1.0 sen after reporting a weak set of quarterly earnings.
  • On the other side of the trade, Carlsberg (+48.0 sen), Dutch Lady (+42.0 sen), Cahya Mata Sarawak (+16.0 sen), Panasonic (+16.0 sen) and G3 Global (+15.0 sen) advanced on the broader market. Meanwhile, Nestle (+20.0 sen), Tenaga (+8.0 sen), Malaysia Airport Holdings (+6.0 sen), Petronas Chemicals (+6.0 sen) and Petronas Dagangan (+6.0 sen) anchored the key index’s winners list.
  • Asian benchmark indices trended lower, reacting to U.S. President Donald Trump remarks on China at the United Nations General Assembly overnight as the Nikkei fell 0.4%. The Shanghai Composite slipped 1.0%, while the Hang Seng Index (-1.3%) registered its sixth straight session of decline to close at a six month low. ASEAN stockmarkets, meanwhile, closed mostly lower yesterday.
  • U.S. stockmarkets rebounded overnight as the Dow gained 0.6% after U.S. President Donald Trump re-assured investors that the Sino-U.S. trade deal could materialise sooner-than-expected. On the broader market, the S&P 500 gained 0.6%, while the Nasdaq (+1.1%) re-claim the 8,000 psychological level.
  • Earlier, major European indices – the FTSE (-0.02%), CAC (-0.8%) and DAX (- 0.6%) all trended lower for the third straight session, mirroring the weakness in Asian equities. The uncertainty surrounding Brexit after U.K. Prime Minister Boris Johnson decision to suspend Parliament was ruled as unlawful by the Supreme Court, also weighed on market sentiment.

The Day Ahead

  • Malaysian equities has been stuck in a rut of late with the selling bias continuing to send stocks lower on the combination of fewer leads and compelling buys to leave the key index on a drifting mode.
  • We see the indifferent trend sustaining over the near term as there is no change to the near term market direction as yet. However, we also think that the FBM KLCI’s may find some near term reprieve as the positive global market undertone could prompt some bargain hunting activities and provide some mild support.
  • Therefore, we think that the key index could now attempt to find some support around the 1,590 level, but the 1,580 level remains in play if the selling escalates. Meanwhile, the resistances are at 1,600- 1,620 levels.
  • The lower liners and broader market shares are seeing increased selling as the wariness is increasing as their direction is still uncertain, leaving many retail players to stay on the sidelines. Therefore, we also think that the indifferent trend is likely to continue for now.

COMPANY BRIEF

  • Widad Group Bhd has clinched a RM120.0 mln subcontract job from Bumi Segar Indah Sdn Bhd to design and build a new solid waste transfer station in Kepong. The contract would end on 19th April 2025. (Bernama)
  • Yinson Holdings Bhd's 2QFY20 net profit dropped 44.2% Y.o.Y to RM41.1 mln, on lower profit contribution from a floating production storage and offloading (FPSO) vessel, unfavourable foreign exchange (forex) and impairment loss. Revenue for the quarter fell 13.4% Y.o.Y to RM213.4 mln.
  • For 1HFY19, cumulative net profit declined 32.1% Y.o.Y to RM91.0 mln. Revenue for the period contracted 12.3% Y.o.Y to RM422.4 mln. An interim dividend of 4.0 sen per share, payable on 20th December 2019 was declared. (The Edge Daily)
  • Perdana Petroleum Bhd has bagged work orders worth up to RM48.0 mln from Petronas Carigali Sdn Bh to provide two anchor handling tug supply (AHTS) vessels.
  • One of the vessels, with an extension option of another year, has an estimated value of between RM20.0 mln and RM40.0 mln if the extension option is exercised, while the other contract is estimated to be worth between RM7.0 mln and RM8.0 mln. (The Edge Daily)
  • Sime Darby Property Bhd (SimeProp) has been selected as an index component of the Dow Jones Sustainability Indices (DJSI). The inclusion reinforces its sustainability credentials as it is the only Malaysian property developer to qualify for the Dow Jones Sustainability Emerging Market Index. (The Edge Daily)
  • Legion Master Sdn Bhd, the major shareholder of jewellery manufacturer DeGem Bhd, is offering minority shareholders RM1.10 a share to take the group private. Legion controls a 58.8% direct stake, or 77.0 mln shares in the company and together with persons acting in concert, collectively control 83.1% of DeGem or 108.7 mln shares. (The Edge Daily)
  • United Malacca Bhd’s 1QFY20 net profit stood at RM37.0 mln against a net loss of RM18.5 mln recorded in the previous corresponding quarter, mainly lifted by a one-off disposal gain of RM53.9. Revenue for the quarter grew 8.3% Y.o.Y to RM43.3 mln. (The Edge Daily)
  • Ikhmas Jaya Group Bhd and its whollyowned unit Ikhmas Jaya Sdn Bhd (IJSB) have been served with a winding-up petition, together with an affidavit verifying petition from Ipmuda Bhd, for owing RM3.0 mln. (The Edge Daily)
  • iDimension Consolidated Bhd has inked an agreement with a potential white knight for the injection of new assets and businesses into the Guidance Note 3 (GN3) company. iDimension has signed a three-month-long Memorandum of Understanding with EV-Dynamic Sdn Bhd (EVD) to discuss the proposed injection of assets, businesses and/or new projects.
  • EVD provides turnkey solutions for intelligent transportation systems, integrated security systems, rail communications systems, engineering solutions and total hospital information systems in Malaysia and across Asean. (The Edge Daily)  

Source: Mplus Research - 26 Sept 2019

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