• Despite the recovery in crude oil prices, coupled with the firmer Ringgit against the Greenback, the FBM KLCI (-0.4%) closed lower for the second straight session as profit taking activities were evident amongst selective banking heavyweights. The lower liners, however, ended higher, while the Consumer Products (+0.3%) sub-index remained the sole outperformer on the broader market.
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• Market breadth stayed negative as losers outnumbered gainers on a ratio of 422-to- 329 stocks. Traded volumes fell by 14.0% to 1.49 bln share due to the negative market sentiment that saw most market players remaining on the sidelines.
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• Banking heavyweights like Hong Leong Financial Group (-50.0 sen), Maybank (- 8.0 sen) and Public Bank (-8.0 sen) fell, while other notable decliners on the big board were PPB Group (-20.0 sen) and Genting (-19.0 sen). Notable losers on the broader market include Perstima (-16.0 sen), Ta Ann (-15.0 sen), Genting Plantations (-12.0 sen), Manulife (-11.0 sen) and Inari (-10.0 sen).
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• In contrast, consumer products stocks like Ajinomoto (+48.0 sen), Panasonic (+40.0 sen), Nestle (+32.0 sen) and Dutch Lady (+24.0 sen) continue to dominate the broader market’s gainers lists, while Pecca Group jumped 29.0 sen on its debut on Bursa Malaysia. Key winners on the FBM KLCI include BAT (+44.0 sen), Sime Darby (+10.0 sen), CIMB (+5.0 sen), AmBank (+3.0 sen) and Tenaga (+2.0 sen).
• Asian benchmark indices rebounded as the Nikkei jumped 3.7%, lifted by the rally in export stocks after the Japanese Yen weakened against the US Dollar. Tracking the positive developments on Wall Street overnight coupled, with the stabilising commodity prices, the Shanghai Composite and the Hang Seng Index rose 0.3% and 1.3% respectively. ASEAN benchmark indices, meanwhile, ended mostly higher.
• U.S. stockmarkets rebounded overnight as the Dow rose 0.6% to close marginally above the 18,000 level for the first time since July 2015. On the broader market, the S&P 500 reversed all its intraday losses to close 0.7% higher, lifted by the stronger-than-expected earnings from Hasbro Inc (+5.8%) and Walt Disney Co (+3.4%).
• European benchmark indices also closed higher – the FTSE (+0.2%), CAC (+0.3%) and DAX (+0.7%) all rebounded from their intraday lows as investors shrugged off the failed meeting between major oil producers. Meanwhile, Spain’s Caixabank launched a takeover bid for Portugal’s BPI at €1.113 per share for the 55.9% of the remaining shares that it does not own.

THE DAY AHEAD

• Despite the positive performance of regional stock indices, the Malaysian stockmarket continues to dither on the back of the sustained lack of fresh catalysts and market interest, both from domestic and foreign sources. This trend looks to continue despite the calmer global market conditions as we think the lack of market interest will continue to stifle the FBM KLCI’s recovery.
• Therefore, we expect the FBM KLCI to continue trending within the tight range of between the 1,700-1,730 levels over the near term with the weakness on selective index heavyweights likely to continue amid the mild profit taking activities.
• The lower liners and broader market shares are also likely to continue seeing limited movements as there are still few leads to entice retail players.

COMPANY BRIEFS

• Boustead Heavy Industries Corportaion Bhd’s unit, BHIC Shipbuilding and Engineering Sdn Bhd has secured a RM54.9 mln contract from KFS Support Services Sdn Bhd for three 45-tonne Bollard Pull ASD Harbour Tugs.
• The contract is subject to KFS fulfilling the conditions of the contract with Konsortium Pelabuhan Kemaman Sdn Bhd and a support letter from a financial institution confirming the funds for the project. (Bernama)
• The Seremban High Court has struck out all claims by seven plaintiffs who said the RM359.5 mln sale and purchase agreement (SPA) signed between Mah Sing Group Bhd's and three land trustees in 2015 to be deemed invalid.
• Earlier on 5th August 2015, the seven plaintiffs – all of which are undivided registered proprietors/beneficial owners to the land, has served a writ and statement of claim against Mah Sing claiming that the SPA was invalid.
• Prior to that, on 11th August 2014, Mah Sing had entered into a SPA with three vendors who are the surviving trustees appointed by all the registered and beneficial owners of the land to be their sole and absolute trustees in respect of the land.
• The 425.4-ha. land in Rantau, Seremban, was to be developed into a mixed development with a gross development value of RM7.50 bln. (The Edge Daily)
• Hong Leong Industries Bhd’s (HLIB) 3QFY16 net profit rose 27.4% Y.o.Y to RM58.7 mln on higher contribution from an associate company, which was offset by higher production cost due to the unfavourable foreign exchange losses from the consumer products segment. Revenue for the quarter, improved marginally by 0.7% Y.o.Y to RM555.0 mln.
• For 9MFY16, cumulative net profit climbed 36.9% Y.o.Y to RM177.7 mln. Revenue for the period increased marginally, by 0.6% Y.o.Y to RM1.62 bln. A second interim dividend of 19.0 sen per share and a special interim single-tier dividend of 10.0 sen per share for FY16, payable on 24th May 2016, was announced. (The Edge Daily)
• Syarikat Takaful Malaysia Bhd’s 1Q2016 net profit was flat at RM46.6 mln as the lower tax expense during the quarter offset the higher operational costs. Revenue for the quarter, however, grew 12.6% Y.o.Y to RM633.3 mln. (The Edge Daily)
• Cycle & Carriage Bintang Bhd’s 1Q2016 net profit rose 43.1% Y.o.Y to RM9.5 mln on higher sales of lower-priced vehicles. Revenue for the quarter grew 19.8% Y.o.Y to RM315.1 mln. (The Edge Daily)
• Integrated Logistics Bhd (ILB) is selling two of its Hong Kong-based warehousing facilities for HK$137.3 mln (RM69.1 mln), in line with its aim to divest most of its remaining business operations in China as it contends with an increasingly competitive business environment there. ILB plans to utilise HK$119.0 mln or 86.7% of total proceeds to repay borrowings.
• In addition, the group expects to realise interest savings of approximately HK$4.2 mln per annum from the repayment of the borrowings. Subsequent to the disposal, which is estimated to be completed by 3Q2016, ILB's gearing ratio will decline to 0.2x, from 0.3x as at 2015. (The Edge Daily)
• Crest Builder Holdings Bhd will be launching its RM1.10 bln transit-oriented development named Latitud8 by 4Q2016.
• Preliminary construction works for the project has already commenced in March and is looking to get works in full swing by the end-2016. The group aims to sell 50.0% of the 420 residential units within the first six months of launching.
• The 2.72-ac. mixed development project will be jointly developed by Intan Sekitar Sdn Bhd, a 51.0%-owned unit of Crest Builder, and Syarikat Negara Bhd (Prasarana). Prasarana will be entitled to 21.2% of the project's GDV, which is equivalent to about RM233.2 mln. (The Edge Daily)

Source: M+ Online Research - 20 Apr 2016