• Despite the pullback on Friday, the FBM KLCI managed to stage a weekly rebound on the back of gains in telco and O&G heavyweights. The lower liners, however, ended in the positive territory amid the mixed broader market, while the other outperforming sub-indices were the Technology and Properties which rose 0.6% and 0.5% respectively.
• Nevertheless, market breadth was positive as gainers outpaced losers on a ratio of 426-to-382 stocks. Traded volumes, however, fell by 4.8% to 1.59 bln shares.
• Genting (-19.0 sen) led the heavyweight losers on the key index, followed by IOI Corporation (-15.0 sen), CIMB (-9.0 sen) and Astro (-4.0 sen). On the broader market, other major decliners were Scientex (-14.0 sen), CI Holdings (-12.0 sen), Amway (-10.0 sen), Pestech (-11.0 sen) and Pharmaniaga (-9.0 sen).
• On the other side of the trade, the key winners include Vitrox (+19.0 sen), Ta Ann (+15.0 sen), Dayang (+13.0 sen) and Eng Kah (+11.0 sen). Meanwhile, MISC (+15.0 sen), Tenaga (+4.0 sen), KLK (+4.0 sen) and Public Bank (+4.0 sen) were among the heavyweight gainers on the big board.
• On the regional markets, the Nikkei fell 1.4% amid a stronger Yen, while the Hang Seng and Shanghai Composite Index also fell 0.4% and 0.1% respectively. ASEAN indices, meanwhile, closed mixed.
• U.S. stockmarkets ended mostly unchanged on Friday amid the slight drop in crude oil futures. Despite the relatively calmness, the Dow and S&P 500, however, registered their best weekly gains since November 2015, led by gains in the consumer discretionary and technology sectors during the week. The broader market gains, meanwhile, was pared down by losses in the materials sector.
• Similar to its U.S. peers, the FTSE also managed to log in its best weekly gain despite the lower Friday session closing, while the DAX and CAC fell by 0.8% and 0.4% respectively. Concurrently, some of the other gainers include gold producers like Fresnillo Plc and Rangold Resources Plc.

THE DAY AHEAD

• We think the market will continue with its consolidation trend over the near term after the bout of overbought last week. We also continue to think that the pullback will remain mild for the time being as the selling pressure has mostly evaporated after the steep falls at the start of the year. At the same time, oil prices are also recovering and this will provide some measure of calmness to market sentiments.
• For now, the 1,650 level is the main near term support, while the 1,680 level is still the immediate resistance, Beyond the level, the 1,700 points level is still the key resistance.
• Although we had expected increased market participation as more investors return to the market after the Lunar New Year break, the pickup in market activity has been relatively muted and this has limited the market’s potential upsides. Given that the market interest remains moderate, we think that trading among the lower liners and broader market shares will remain mixed and the upsides will be limited over the near term.

COMPANY BRIEFS

• Property developer Tropicana Corp Bhd’s 4Q2015 net profit plunged 85.4% Y.o.Y to RM29.1 mln as earnings normalised after a land sale gain of RM167.9 mln and fair value adjustments from investment properties of RM17.1mln was recorded in the previous corresponding quarter. Revenue for the quarter dipped 66.2% Y.o.Y to RM304.9 mln.
• For 2015, cumulative net profit declined 33.1% Y.o.Y to RM223.3 mln .Revenue for the year fell 28.8% Y.o.Y to RM1.25 bln. An interim single-tier dividend of two sen per share was declared. (The Star Online)
• Malakoff Bhd’s 4Q2015 net profit dropped 5.0% Y.o.Y to RM107.0 mln due to lower capacity factors registered by its coal fired and gas fired power plants and the scheduled outages taken by certain power plants as part of their maintenance cycles. Revenue for the quarter declined 7.1% Y.o.Y to RM1.37 bln.
• For 2015, cumulative net profit rose 32.6% Y.o.Y to RM453.2 mln. Revenue for the year, however, declined 5.2% Y.o.Y to RM5.30 bln. (The Star Online)
• Zelan Bhd’s 4Q2015 net loss stood at RM18.5 mln vs. a net profit of RM12.6 mln in the previous corresponding quarter. Revenue for the quarter, however, climbed 28.9% Y.o.Y to RM112.0 mln.
• For 2015, cumulative net profit sank 38.0% Y.o.Y to RM30.5 mln. Revenue for the year, however, increased 42.5% Y.o.Y to RM409.1 mln. (The Edge Daily)
• Petronas Dagangan Bhd’s (PetDag) 4Q2015 net profit sky-rocketed 207x to RM92.1 mln on higher margin contribution from the retail segment and higher other income from an accounting reclassification from the goods and services tax (GST) implementation as well as higher interest income. Revenue for the quarter, however, fell 18.9% Y.o.Y to RM6.05 bln.
• For 2015, cumulative net profit rose 57.5% Y.o.Y to RM790.0 mln. Revenue for the year, however, declined 22.2% Y.o.Y to RM25.17 bln. An interim dividend of 20 sen per share for the quarter, payable on 17th March 2016 was declared. (The Edge Daily)
• Sunway Bhd is acquiring four plots of land in Selangor for a total of RM68.6 mln to develop into industrial properties. Ekuiti Meranti (M) Sdn Bhd has signed a sale and purchase agreement (SPA) with its wholly-owned subsidiary, Sunway Dimension Stones Sdn Bhd, View2pick Sdn Bhd (V2P) and Chen Yew Plastics Sdn Bhd (CYP) to acquire three parcels of leasehold land with a 60-year tenure totaling 2.6 ha. for RM32.7 mln.
• Two of the parcels of land (PT 7 and PT 8) are located in Subang and one (PT 2049) is in Sungai Buloh. The purchase consideration for the 2.3-ac. PT 8 and the 2.0-ac. PT 2049 is RM9.0 mln each. Meanwhile, Ekuiti Meranti will acquire the 2.1-ac. PT 7 from Sunway Dimension for RM12.5 mln.
• The acquisition of the three pieces of land will provide it with additional land bank of 4.3 ac. for industrial development, which is expected to be launched by 1H2017 and completed no more than two-and-a-half years later.
• Separately, Sunway’s wholly-owned subsidiary, Sunway Holdings Sdn Bhd has inked an SPA with Tamura Electronics (M) Sdn Bhd to acquire a freehold land with an industrial factory and warehouse erected on it in Sungei Way Free Industrial Zone, Petaling Jaya, measuring 2.0 ha. for RM35.8 mln. All four deals are expected to be completed by 2H2016. The acquisitions will be funded through bank borrowings and internal funds. (The Edge Daily)
• Cypark Resources Bhd has received a letter of intent (LoI) on 12th February 2016 from Perbadanan PR1MA Malaysia (PR1MA) for the latter to en bloc purchase 562 units of PR1MA Homes in Sungai Long, Selangor at a price mutually to be agreed by parties.
• The PR1MA Homes comprise apartment units and nine shoplot units that are situated on an 8.6-ac. piece of freehold Malay Reserve Land in Sungai Long. (The Edge Daily)

Source: M+ Online Research - 22 Feb 2016