The FBM KLCI (+0.7%) snapped a streak of three consecutive days of losses yesterday as the key index hovered in the positive territory for the entire day, owing to the strong buying support on the big board, coupled with the recovery in crude oil prices. Both lower liners and the broader market shares also closed in the positive with the exception of the Properties sub-index which closed unchanged.

Market breadth remained positive as gainers outpaced losers on a ratio of 507- to-351 stocks. Traded volumes improved by 13.9% to 1.99 bln shares amidst the positive market sentiments.

Genting (+46.0) led the big board gainers list, followed by Hong Leong Financial Group (+30.0 sen), Petronas Gas (+20.0 sen) and BAT (+10.0 sen) Maxis added 2.0 sen after reporting a strong set of quarterly earnings. Notable gainers on the broader market were consumer products stocks like Fraser & Neave (+60.0 sen), Dutch Lady (+30.0 sen) and Panasonic (+30.0 sen), while Malaysia Airport Holdings and SCC rose 27.0 sen and 26.0 sen respectively.

Among the biggest decliners on the broader market include Nestle (-30.0 sen), Allianz (-20.0 sen), Advanced Packaging (- 10.0 sen), SAB (-10.0 sen) and YNH Property (-10.0 sen). Maybank (-2.0 sen), meanwhile, was the sole decliner on the FBM KLCI.

Asia benchmark indices closed mostly higher as the Nikkei climbed 2.7% to close above the 17,000 psychological, taking cue from the positive sentiment on Wall Street. The Hang Seng Index added 1.8%, but the Shanghai Composite fell 0.7% on a choppy trading session. ASEAN benchmark indices, meanwhile, ended mostly higher.

U.S. stockmarkets retreated overnight as the Dow (-0.6%) snapped a streak of three consecutive days of gains to close below the 18,000 psychological level as crude oil prices fell from YTD high. On the broader market, the S&P 500 ended 0.5% lower with nine of the ten main sectors ending the day in the red, dragged down by the weaker-than-expected corporate earnings from Verizon Communications (-3.3%) and Travelers Cos. (-6.1%).

European benchmark indices also closed mostly lower as the FTSE and CAC fell 0.5% and 0.2% respectively after the European Central Bank held interest rates unchanged. The DAX, however, added 0.1% to close positive in the final trading hour after Volkswagen AG (+5 .1%) reached a deal with the Justice Department to address its excess diesel emissions.

THE DAY AHEAD

The Malaysian stockmarket seems to have found some near term impetus after a period of lackluster trading with market breadth picking up yesterday – a potential sign that market players are more comfortable with the present market conditions. This could point to more near term upsides, albeit a slight pullback could first permeate the market after yesterday’s better-than-expected gains and following the insipid performance on Wall Street overnight.

Any pullback will also be mild with the key index likely to find ample support around the 1,720 level and the market is poised for further upsides after the brief consolidated. On the upside the 1,730 level will be the next resistance, followed by the 1,740-1,750 levels.

Meanwhile, we think interest on the lower liners and broader market shares will continue to pick up amid the calmer market conditions, but quick profit taking could limit the near term upsides ahead of the weekend.

COMPANY BRIEFS

Maxis Bhd's 1Q2016 net profit rose 26.3% Y.o.Y to RM518.0 mln as it benefited from lower marketing costs and lower tax rate. Revenue for the quarter, however, fell marginally by 0.4% Y.o.Y to RM2.14 bln. A first interim dividend of five sen per share was declared. (The Star Online)

Bumi Armada Bhd's unit, Armada Balnaves Pte Ltd (ABPL) has filed a claim in the Australian court against Woodside Energy Julimar Pty Ltd over the latter's cancellation of a contract and is seeking US$283.5 mln (RM1.10 bln) in compensation.

ABPL is seeking damages of US$275.8 mln – the amount of the termination payment it was entitled to had the contract not been terminated and also US$7.7 mln for work done and materials supplied. (The Star Online)

IHH Healthcare Bhd's indirect 59.6%-owned Turkish entity, Acibadem Saglik Hizmetleri Ve Ticaret AS (Acibadem) plans to acquire Bulgaria's largest healthcare provider, Tokuda Group and also merge with the Bulgarian City Clinic Group in a cumulative deal amounting to RM437.3 mln. The transactions will lead to the creation of the largest private healthcare provider in Bulgaria.

Acibadem has entered into a share purchase agreement (SPA) with vendor, Dr Torao Tokuda and Tokushukai Inc for the sale and purchase of 100.0% Tokushukai-Sofia EOOD's common company stock at a cost of €65.0 mln (RM286.1 mln). The second deal involve the merger with City Clinic Group, Acibadem and Clinical Hospital Acibadem Sistina Skopje, a 30.0%-indirect subsidiary of IHH has entered into a share sale purchase agreement with 11 entities and individuals, to buy the share capital of City Hospitals and Clinics AD (City Clinic Group) for €34.3 mln (RM151.2 mln). The deals are expected to be completed in three months. (The Edge Daily)

Compugates Holdings Bhd’s 70.0%-owned subsidiary, Compugates Development and Mining Sdn Bhd, plans to dispose of a piece of land in Dengkil, Selangor to Bangsawan Bumimaju Sdn Bhd for RM62.1 mln. The land measures 25.1-ha. and is designated for agricultural use with a net book value of RM3.8 mln as at 31st December 2015. Its market value stands at RM60.0 mln, as appraised by private valuers. (The Edge Daily)

TMC Life Sciences Bhd’s 3QFY16 net profit rose 12.7% Y.o.Y to RM3.3 mln, mainly due to higher recorded revenue and interest income earned. Revenue for the quarter added 18.8% Y.o.Y to RM31.4 mln.

For 9MFY16, cumulative net profit climbed 60.0% Y.o.Y to RM9.5 mln. Revenue for the period increased 24.2% Y.o.Y to RM92.8 mln. Going forward, the company plans to open a new TMC Fertility Centre branch in Ipoh and a retail pharmacy in Johor Bahru in FY16. (The Edge Daily)

Malakoff Corp Bhd has allocated RM900.0 mln in capital expenditure (capex) for its expansion plans in 2016, of which RM700.0 mln has been earmarked for the new 1,000 MW Tanjung Bin Energy power plant. The group is eyeing opportunities for expansion both domestically and overseas to meet the targeted capacity of 10,000 MW by 2020. Malakoff has also noted that the group's gearing of about 2.3x is still low, allowing some room for further borrowings to fund it capex. (The Edge Daily)

Eversendai Corp Bhd's wholly-owned subsidiary, Eversendai Energia Sdn Bhd (EESB) is being sued by Poratha Corporation Sdn Bhd (PCSB) which is claiming RM7.5 mln and interest for flue gas desulfurization (FGD) ducting, miscellaneous piping works, firefighting piping works and other incidental costs. The case management has been fixed on 16th May 2016 at the Shah Alam High Court. (The Edge Daily)

AmFirst Real Estate Investment Trust’s (AmFirst REIT) 4QFY16 net property income rose 4.8% Y.o.Y to RM16.5 mln on lower operational expenses. Revenue for the quarter, however, decreased slightly by 0.1% Y.o.Y to 26.0 mln.

For FY16, cumulative net property income declined 8.3% Y.o.Y to RM61.1 mln. Revenue for the year fell 6.6% Y.o.Y to RM99.8 mln. A distributable income per unit of 3.07 sen per unit was declared. (The Edge Daily)

Source: M+ Online Research - 22 Apr 2016