The FBM KLCI extended its losses on Friday, mirroring the weak performance on Wall Street overnight. The key index traded in the negative territory for the entire trading session and further selling pressure at the last minute of trading sent the key index to close at its intra-day’s low. Lower liners also closed marginally lower – the FBM Small Cap (- 0.12%), FBM Fledging (-0.02%) and FBM Ace (-0.02%) all dipped lower to end the week.

- Market breadth turned negative as losers outnumbered gainers on a ratio of 391-to-353 stocks. Traded volumes plunged 48.6% to 1.64 bln shares amid the lackluster trading environment.

- Among the biggest losers on the FBM KLCI were BAT (-RM1.34), Tenaga (- 26.0 sen), UMW (-16.0 sen), Digi (-10.0 sen) and Astro (-8.0 sen). Elsewhere, its losses by 1.0% on profit taking by hedge funds ahead of the end of first quarter. The Hang Seng Index closed marginally lower, while the Shanghai Composite added 0.2% as industrial companies rallied after the government signaled its intention to increase overseas infrastructure projects to reduce overcapacity. ASEAN indices, meanwhile, ended mixed.

- U.S. stockmarkets halted a four-consecutive session of losses as the Dow closed 0.2% higher after the U.S. Federal Reserve Chairwoman's remarks on the cautious monetary policy stance ahead of 1Q2015 earnings in April. On the broader market, the S&P 500 climbed 0.2% while the Nasdaq rose 0.6% - the latter on news that Intel Corp. was in talks to buy Altera Corp.

- European stockmarkets closed mixed last Friday as the FTSE fell 0.6%, tracking the unrest in Yemen and while investors await the news on a deal over Greece’s finances this week. The CAC and DAX added 0.6% and 0.2% respectively, but the latter marked a first weekly loss in two months.

THE DAY AHEAD

- Once again, the 1,820 level is proving to be a significant hurdle for the market to clear despite the window dressing activities earlier last week that lifted the key index above the 1,800 points level. It also appears that investors remain unconvinced of the market’s ability to climb and stay above the 1,820 level given the upcoming implementation of the GST which may slow earnings growth in the upcoming quarters.

- While we think that window dressing activities are still in play over the near term, the upsides will be limited with the 1,820 level to serve as the major resistance. Institutional investors will continue to provide selective buying support, but we think retail investors could retreat to the sidelines due to the lack of positive catalyst. This could see market breadth continuing to stay mixed-to-lower, while volumes could also stay thin over the near term.

COMPANY BRIEF

- Prestariang Bhd has won a RM29.9 mln contract from the Inland Revenue Board (IRB) to provide Microsoft software licences and value-added services for a period of three years. The company will provide the services under a master licensing agreement, effective from 1st March 2015 to 28th February 2018, which does not include the goods and services tax. (The EdgeDaily)

- Talam Transform Bhd’s posted a net loss of RM124.1 mln in 4QFY15 vs. a net profit of RM37.1 mln in the previous corresponding quarter due to higher impairment losses of RM177.4 mln. Revenue for the quarter declined 46.8% Y.o.Y to RM79.8 mln.

- For FY15, cumulative net loss stood at RM125.6 mln vs. a net profit of RM22.0 mln in the previous corresponding year. Revenue for the year, however, grew 52.3% Y.o.Y to RM292.6 mln. (The EdgeDaily)

- Beverage maker Fraser & Neave Holdings Bhd (F&N) has lost its exclusive marketing, distribution and sale of Red Bull energy drinks in Malaysia. F&N has instead signed a transition agreement with Allexcel Trading Sdn Bhd and has mutually agreed not to renew the terms of the principal agreement as both parties were unable to reach an agreement on the changes in commercial terms.

- The parties, however, have agreed to a transition period of six months, which shall commence from 1st April 2015 to 30th September 2015. During the transition period, F&N Beverages will hand over the exclusive dealership to Allexcel Trading in phases. (The EdgeDaily)

- Silk Holdings Bhd’s 2QFY15 net loss narrowed to RM4.7 mln vs. a net loss of RM7.3 mln in the previous corresponding quarter, on the back of increased revenue from its oil and gas (O&G) support services division and lower losses at its highway unit. Revenue for the quarter rose 21.9% Y.o.Y to RM103.6 mln.

- For 1HFY15, cumulative net loss narrowed to RM8.0 mln vs. a net loss of RM13.6 mln in the previous corresponding period. Revenue for the period improved 17.7% Y.o.Y to RM211.1 mln. (The EdgeDaily)

- Selangor Properties Bhd’s 1QFY15 net profit fell 62.6% Y.o.Y to RM58.1 mln as the previous corresponding quarter included profits recognised from the disposal of its stake in Help International Corp Bhd. Revenue for the quarter, however, grew 8.2% Y.o.Y to RM23.9 mln. (The EdgeDaily)

- Perak Corp Bhd has received approval from its shareholders to sell the entire 15.7% stake in Integrax Bhd to Tenaga Nasional Bhd (TNB) for RM3.25 a share. The vote by shareholders means that Perak Corp would receive cash of about RM153.0 mln, which it would use to pare down debts and fund its current projects. TNB would see its stake in Integrax rise to 44.0%, which is 6.0% shy of TNB’s takeover offer to become unconditional.

- TNB, which has been mopping up shares from the open market, currently owns about 28.3% in Integrax. TNB’s takeover offer for the port operator is open until March 31.

- Meanwhile, Amin Halim Rasip, the major shareholder and co-founder who currently owns 24.6% in Integrax, would now be in a difficult position having had his offer to buy a 5.0% stake in Perak Corp turned down.

- Amin reiterated that he would not be selling his current stakes in Integrax at the moment and the Integrax board will discuss on 31st March 2015 to decide on further actions. (The Star Online)

- Berjaya Corp Bhd’s (BCorp) 3QFY15 net profit surged 60.1x to RM975.4 mln due to the divestment of Berjaya Auto Bhd’s (BAuto) shares which resulted in the deconsolidation of BAuto with effect from 1st December 2014. Revenue for the quarter, however, fell 6.6% Y.o.Y to RM2.21 bln.

- For 9MFY15, cumulative net profit jumped 11.6x to RM1.14 bln. Revenue for the period rose 18.1% Y.o.Y to RM7.27 bln.

- Separately, Berjaya Corp Bhd has launched a takeover of REDtone International Bhd and is offering 80 sen a share, which could be seen as too low.

- However, the Sultan of Johor, who owns 134.0 mln or 20.1% of REDtone shares has stated he will not be selling his stake. BCorp said it bought 70.1 mln shares or 10.5% stake on 28th March, 2015 for RM56.1 mln or 80 sen a share in an off-market deal from Indah Pusaka Sdn Bhd.

- Following the acquisition, BCorp and parties acting-in-concert have raised their total stake to 35.8% or 238.5 mln shares. They also owned 109.3 mln of the 2.75% 10-year Irredeemable Convertible Unsecured Loan Stocks 2010/2020 (ICULS).

- BCorp is offering 80 sen each for the outstanding 64.2% shares and 32 sen for the outstanding 97.5 mln ICULS. The offer price of 80 sen a share was a discount of 4.6% from the five-day volume weighted average market price (VWAMP) of 4.6 sen and two sen below the one-month VWAMP. However, it is 2.6 sen above the one-year VWAMP of 77.4 sen. BCorp said it would want to maintain the listing status of REDtone. (The Star Online)

- Oil and gas (O&G) services provider Yinson Holdings Bhd’s 4QFY15 net profit improved marginally by 1.2% Y.o.Y to RM99.7 mln due to higher contribution from its marine segment. Revenue for the quarter rose 1.7% Y.o.Y to RM253.6 mln.

- For FY15, cumulative net profit climbed 77.1% Y.o.Y to RM247.5 mln. Revenue for the year increased 14.7% Y.o.Y to RM1.08 bln. A dividend of 1.5 sen a share for FY15, which is subject to shareholders’ approval, was announced. (The Star Online)

Source: M+ Online Research - 30 Mar 2015