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M+ Online Market Pulse - Market Undertone Still Positive, FBM KLCI To Climb - 18 Feb 2016
MalaccaSecurities
Publish date: Thu, 18 Feb 2016, 11:08 AM
MalaccaSecurities
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All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my
Malacca Securities Sdn Bhd
Hotline: 1300 22 1233 / 06-336 5178 (office hours: 8.30am - 5.30pm)
Tel : +606 - 337 1533 (General)
Fax : +606 - 337 1577
Email: support@mplusonline.com.my
- The FBM KLCI ended in the red yesterday despite the number of heavyweight gainers outweighing the heavyweight losers by a margin of 2-to-1 stock. In addition, most of the lower liners like the FBM Fledging and FBM ACE also fell by 0.1% and 1.5%, respectively amid the mostly positive broader market performances.
- Market breadth was positive as gainers outpaced losers on a ratio of 440-to-402 stocks. Traded volumes increased by 2.8% to 1.75 bln shares.
- Genting (-23.0 sen) topped the heavyweight losers on the FBM KLCI, followed by Petronas Chemicals (-22.0 sen), CIMB (-11.0 sen), Ambank (-9.0 sen) and Astro (-7.0 sen). Meanwhile, the other major decliners on the broader market were LPI (-14.0 sen), Sui Wah Corporation (-14.0 sen), MSM (-10.0 sen) and Coastal (-8.0 sen).
- On the other side of the trade, some of the key winners of the day include Analabs (+18.0 sen), Tasek (+26.0 sen), Kobay (+14.0 sen), Karex (+16.0 sen) and SAM (+25.0 sen). Concurrently, some of the index-linked heavyweight gainers were Petronas Dagangan (+36.0 sen), PPB (+20.0 sen), IOI Corporation (+16.0 sen) and Axiata (+10.0 sen).
- Most Asian stockmarkets closed higher on the back of the increase in crude oil prices – the Hang Seng and Nikkei rose 1.1% and 0.2% respectively, while the Shanghai Composite Index increased by 3.3%. ASEAN indices, meanwhile, ended mixed.
- U.S. stockmarkets marked its third straight day of gains overnight as the S&P 500 climbed on gains in energy and consumer discretionary stocks after crude oil futures rallied 5.6% amid talks of production cuts among OPEC members. Some of the outperforming counters were Priceline Group and Alphabet Inc.
- Most European equities also rebounded, taking cue from the recovering oil prices, while the FTSE rose to close at its highest level since 1st February this year. Separately, the Euro fell by 1.8% against the US Dollar yesterday.
THE DAY AHEAD
- Despite yesterday’s near unchanged closing, we think the near term market undertone remains positive amid the sustained recovery of key global equity markets that would also continue to shore up confidence in the local stockmarket. Hence, we see further recovery ahead after yesterday’s pause and expect oil and gas stocks to lead the gains on the back of higher crude oil prices. We also think that there could be some bargain hunting activities on banking stocks are their recent selldown.
- On the upside, the 1,670-1,680 levels will be the key near term resistances, while the 1,650 level is the main near term support as the market awaits for the release of the country’s 4Q2015 economic performance that will be released today, where the consensus estimate points to a slower growth of 4.1% Y.o.Y.
- The lower liners and broader market stocks, meanwhile, should also continue to see some bouts of renewed trading interest as more participants re-enter the market after Lunar New Year break. The positive near term undertone would also help to entice more retail players back into the market, in our view.
COMPANY BRIEFS
- Kuala Lumpur Kepong Bhd’s (KLK) 1QFY16 net profit surged 271.2% Y.o.Y to RM795.2 mln, boosted by the sale of plantation land worth RM485.7 mln to an associate, higher selling prices of palm kernel and rubber, as well as higher crop production of both fresh fruit bunches and rubber. Revenue for the quarter increased 39.2% Y.o.Y to RM4.33 bln. (The Star Online)
- British American Tobacco (M) Bhd’s (BAT) 4Q2015 net profit increased 5.7% Y.o.Y to RM196.1 mln on lower operating expenses and lower finance costs. Revenue for the quarter, however, fell 12.2% Y.o.Y to RM1.06 bln.
- For 2015, cumulative net profit rose 1.7% Y.o.Y to RM913.3 mln. Revenue for the year, however, contracted 4.5% Y.o.Y to RM4.58 bln. (The Star Online)
- Zelan Bhd’s wholly-owned subsidiary, Zelan Construction Sdn Bhd (ZCSB) has bagged a RM307.4 mln contract from Zelan's 95%-owned unit Terminal Bersepadu Gombak Sdn Bhd to be the main contractor for the development of the Gombak Integrated Transport Terminal (GITT) in Selangor.
- Separately, Zelan has announced that Terminal Bersepadu Gombak has agreed to appoint Landasan Kapital (M) Sdn Bhd (LKSB) to be the main contractor for the MRR2 works, while LKSB agrees to appoint ZCSB to carry out subcontract works related to the MRR2 works on such terms and conditions to be agreed upon between both parties. (The Star Online)
- SAM Engineering & Equipment (M) Bhd’s 3QFY16 net profit climbed 26.8% Y.o.Y to RM14.7 mln on higher revenue in the equipment manufacturing segment resulting from higher demand for its storage device testers. Revenue for the quarter added 36.5% Y.o.Y to RM155.0 mln.
- For 9MFY16, cumulative net profit surged 137.4% Y.o.Y to RM45.7 mln. Revenue for the period rose 43.6% Y.o.Y to RM458.1 mln. (The Star Online)
- Batu Kawan Bhd's 1QFY16 net profit more soared 231.4% Y.o.Y to RM387.5 mln on higher revenue and recognition of RM485.7 mln surplus from the disposal of plantation land to an associate. Revenue for the quarter grew 38.4% Y.o.Y to RM4.45 bln. (The Edge Daily)
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