• The FBM KLCI finally staged a rebound on the back of selective bargain hunting activities among index heavyweights and a jump in crude oil prices. The gains were also in tandem with the positive regional stock index performances. Meanwhile, the lower liners and other sub-indices on the broader market also ended positively – the FBM ACE and Industrial Products sector rose 1.2% each, while the FBM Small Cap rose by 0.9%.
• Market breadth remained positive as gainers outnumbered losers on a ratio of 525-to-292 stocks. Traded volumes improved by 16.8% to 1.67 bln shares on the back of selective bargain hunting activities.
• Heavyweight gainers on the FBM KLCI was led by Petronas Gas (+20.0 sen), while Genting (+15.0 sen), Maybank (+13.0 sen), Sime Darby (+13.0 sen) and Digi (+10.0 sen) were amongst the other index-linked heavyweight advancers. Elsewhere, other stocks that closed positively were Daibochi (+20.0 sen), F&N (+14.0 sen), Apollo (+23.0 sen), Carlsberg (+26.0 sen) and Top Glove (+40.0 sen) – the latter extended its two-day run of gains.
• In contrast, the major losers on the broader market were Nestle (-86.0 sen), TAHPS (-18.0 sen), Eng Kah Corporation (-9.0 sen) and Ipmuda (-11.0 sen). On the big board, almost a third of the index-linked blue chips slipped into the red - BAT (-76.0 sen), Hong Leong Financial Group (-8.0 sen), UMW (-3.0 sen), Genting Malaysia (-2.0 sen) and Public Bank (-2.0 sen) were among the main losers.
• On the regional markets, the Nikkei Index (+2.6%) were amongst the largest Asian benchmark index gainers, while the Hang Seng Index rose 2.0% – the latter was led by gains in Sinopec and Petrochina Co. Concurrently, the Shanghai Composite Index was up by 0.2%. ASEAN indices, meanwhile, closed mostly positive.
• Following the first rate hike of 25 basis points since June 2006 announced by the US Federal Reserve overnight, Wall Street extended its gains for the third straight session as the Dow added 1.3%. The positive market sentiment came as investors perceived that the strength in the US economy could withstand the gradual interest rate hike in the coming quarters as the targeted inflation rate of 2.0% can be attained. The S&P 500 jumped 1.5% with only the energy sector (-0.5%) falling as crude oil prices slipped back after the unexpected surge in supplies, while the Nasdaq climbed 1.5% to close above the 5,000 psychological mark.
• Earlier, European benchmark indices also ended in the positive – the FTSE (+0.7%), CAC (+0.2%) and DAX (+0.2%) all rose ahead of the widely anticipated interest rate hike by the US Federal Reserve. Meanwhile, the Eurozone’s inflation rate for November rose 0.2% Y.o.Y, exceeding economists’ estimates of 0.1% rise.

THE DAY AHEAD

• With the anticipated U.S. interest rate hike now in fruition, a long-standing market uncertainty has been removed and market participants can now price-in the interest rate hike and the strength of the U.S. economy will allow it to absorb the rate hike. This could also mean that there are further near term upsides on Bursa Malaysia as it takes cue from the positive performance of overseas stockmarkets.
• Still, we are in the view that the near term upsides could be capped to around the 1,650 level amid the continuing lack of positive domestic catalyst. Oil and gas stocks will also continue to endure a mixed-to-lower performance due to the unsettled prices, while fresh buying will also be tepid as many market participants are already on their year-end holidays, leaving the buying mainly to mild bargain hunting activities.

COMPANY BRIEFS

• Lion Diversified Holdings Bhd has proposed to restructure its US$132.1 mln (RM570.1 mln) 6.0% exchangeable bonds that is due in 2017. The restructuring plan will be submitted to its bondholders for approval by 31st January, 2016.
• Around US$500,000 will be repaid to the bondholders from cash collateral currently held in respect of the bonds, while the remainder will be divided into the issuance of two bonds.
• The US$12.2 mln zero coupon guaranteed secured exchangeable bonds will be secured and exchangeable into 50.2 mln Parkson Holdings Bhd shares due on 16th November, 2020, while the US$27.0 mln 8.0% guaranteed unsecured bonds will be repayable in eight instalments, with seven payments of US$3.0 mln payable on a semi-annual basis and a final payment of US$6.0 mln due on 16th November, 2019.
• The bonds issue is expected to be completed by the first quarter of 2016. (The Edge Daily)
• SWS Capital Bhd has dropped its plans to issue up to 10.0% of the company’s issued and paid-up share capital via private share placement, following the Kuala Lumpur High Court's order on 16th December, 2015.
• The Kuala Lumpur High Court has granted an ad interim injunction until 23th December 2, 2015, after SWS major shareholders, led by Tan Sri Tan King Tai, took the matter to court to prevent the company from implementing its private placement on 4th December, 2015. (The Edge Daily)
• Bina Darulaman Bhd has clinched a contract worth RM106.0 mln from the Urban Wellbeing, Housing and Local Government Ministry to design and construct 630 units of single-storey terrace house in Kubang Pasu, Kedah. The project is expected to be completed in 36 months and the group is required to provide a performance bond amounting to RM5.3 mln to the Ministry. (The Star Online)
• OCK Group Bhd is collaborating with its Myanmar partner, King Royal Technologies Co Ltd, to build up to 3,000 telecommunications towers in Myanmar over five years. The two parties have signed a master services agreement with Telenor for the proposed project on 16th December, 2016.
• The company will invest US$75.0 mln to build 920 telco towers for Telenor Myanmar Ltd, which will be delivered in 2016, under a long-term 'build and lease' business model.
• The Myanmar investment is part of the OCK’s mission to grow its recurring income. (The Edge Daily)
• Berjaya Land Bhd (BLand) is selling its under-construction Berjaya (China) Great Mall Recreation Centre in Hebei Province through its unit’s 51.0% owned subsidiary, Berjaya (China) Great Mall Co Ltd (GMOC) for RMB2.08 bln (RM1.40bln) cash.
• GMOC, a subsidiary of Berjaya Leisure (Cayman) Ltd, has entered into a construction project transfer agreement with Beijing SkyOcean International Holdings Ltd on 16th December, 2016. Beijing SkyOcean paid RMB50.0 mln on signing the contract and would pay RMB1.02 bln within five days after all conditions in the contract is fulfilled, while the remaining RMB1.02 bln within 13 months after that completion date.
• The proceeds of RMB1.11 bln (RM743.1 mln) will be used to repay debts, contractors,to defray taxes on sale of the Great Mall project,incidental expenses and the cash balance of RMB967.5 mln (RM646.2mln) will be used to fund BLand’s working capital.
• GMOC has proposed to distribute the cash balance of RMB967.5 mln (RM646.2mln) to the shareholders of GMOC, which upon approval will be used to fund BLand group’s working capital.
• The proposed disposal is subject to the approvals of the regulatory and/or governmental authorities in China and is expected to be completed by end- 2017. (The Star Online)
• MMC Corp Bhd has proposed an unconditional takeover offer to acquire all the remaining shares in NCB Holdings Bhd for a cash offer price of RM4.40 per share, valid from 16th December, 2015 to 6th January, 2016.
• To date, MMC owns approximately 83.6% equity stakes in NCB, which wholly owns Northport (Malaysia) Bhd, a major gateway for import and export of containers in Port Klang. NCB also operates a haulage cum logistics business via Kontena Nasional Bhd. (The Edge Daily)
• Olympia Industries Bhd is proposing a capital reduction exercise by cancelling nine sen out of RM1.00 par value of every existing ordinary share, to pare down its accumulated losses. The proceeds of RM921.1 mln will be utilised to offset its accumulated losses and some retained as capital reserves.
• The group is planning to eliminate its audited accumulated losses as at 30th September, 2014 of RM477.4 mln and unaudited accumulated losses as at 30th September, 2015 of approximately RM446.5 mln, via the proposed par value reduction. The proposals are expected to be completed by the 2Q016.
• Following the completion of the proposed exercise, Olympia’s issued and paid-up capital will be valued at RM102.3 mln, down from RM1.02 bln previously. (The Edge Daily)
• SYF Resources Bhd 1QFY16's net profit jumped 110.2% Y.o.Y to RM10.8 mln due to improved revenue from its property development, increased board sales and rubberwood furniture exports and the stronger Greenback. Revenue for the quarter came in 58.0% higher Y.o.Y at RM94.9 mln, from RM60.0 mln in 1QFY15.
• On its future prospects, the group plans to increase the exports of processed rubber wood materials to other Asian countries, especially to China and India.
• As for property development activities, SYF expects the two new projects, namely Kiara Plaza and Wira Heights 3 to continue contributing significantly to its revenue. In addition, a joint-venture residential development in Sungai Long is set to be launched in early 2016. (The Edge Daily)
• Poh Kong Holdings Bhd has reported a fall of 89.1% Y.o.Y in its 1QFY16 net profit to RM336,000, attributed to lower sales volume, while revenue came in 11.2% Y.o.Y lower at RM172.3 mln from RM194.0 mln in the previous corresponding quarter, due to the weak market sentiment, decline in demand for gold investment and jewellery products. (The Edge Daily)
• Pos Malaysia Bhd has accepted the conditional offer from DRB-Hicom Bhd to sell its entire stake in KL Airport Services Sdn Bhd (KLAS) and a parcel of freehold industrial land in Petaling Jaya, Selangor to the latter for RM835.2mln.
• The sale and purchase agreements (SPA) would be executed within three months from the acceptance of the offer or such other mutually agreed period and will be paid via the issuance of 250.8 mln new ordinary shares in Pos Malaysia at an issue price of RM3.33 per share. (The Star Online)

Source: M+ Online Research - 17 Dec 2015