• The FBMKLCI closed in the positive territory last Friday, albeit trading in the red for most of the session, due to buying support amongst selective banking and telco heavyweights, trimming its weekly losses to 1.4% W.o.W. The lower liners ended higher, while the Industrial (-0.4%), Consumer Products (-0.3%) and Industrial Products (-0.7%) sub-indices bucked the generally positive market trend.
• Market breadth turned positive as gainers outstripped losers on a ratio of 426-to- 346 stocks, while traded volumes rose 12.5% to 1.58 bln shares on the back of the bargain hunting activities.
• Among the strongest advancers on the big board were Public Bank (+20.0 sen), and Maybank (+14.0 sen), while Hong Leong Bank, Maxis and PPB Group rose 6.0 sen each. Notable advancers on the broader market were Nestle (+50.0 sen), Carlsberg (+22.0 sen) and Apex Healthcare (+19.0 sen), while SCC and Quality Concrete gained 14.0 sen and 13.0 sen respectively.
• In contrast, Ajinomoto (-30.0 sen) was among the biggest decliners on the broader market, followed by Hartalega (- 13.0 sen), QL Resources (-12.0 sen) and Batu Kawan (-10.0 sen). ECS ICT fell 10.0 sen after announcing a weak set of quarterly earnings. Notable key index losers were BAT (-RM1.30), followed by oil & gas heavyweights like Petronas Gas (- 20.0 sen), Petronas Dagangan (-16.0 sen), Public Bank (-16.0 sen), Petronas Chemicals (-13.0 sen) and SapuraKencana Petroleum (-1.0 sen).
• Asian benchmark indices closed lower last Friday as the Shanghai Composite was lower by 2.8% due to the disappointing manufacturing data, while the Hang Seng Index and Nikkei fell 1.7% and 0.3% respectively. ASEAN stockmarkets, meanwhile, closed mostly lower.
• U.S. stockmarkets advanced last Friday as the Dow added 0.5% as the overall slowdown in the U.S. jobs report tempered expectations for an interest rate hike in June. On the broader market, the S&P 500 and Nasdaq ended the week slightly lower, despite gaining 0.3% and 0.4% respectively on Friday, due to the mixed economic data and slowing global growth.
• European benchmark indices also closed mixed as the FTSE recouped its intraday losses to close up (+0.1%), while the DAX rose 0.2%, although the CAC fell by 0.4%.

THE DAY AHEAD

• We think that the FBM KLCI will maintain its near-term recovery after last Friday afternoon’s turnaround to adjust from its bout of oversold. The positive performance of key global stocks indices at the end of last week will also help to provide some vibes for the key index to sustain its short term recovery.
• Although we think the FBM KLCI is poised for a near term recovery, we do not think that the upsides will be significant as the cautious market conditions are still prevalent due to the continuing global economic uncertainties and the unsettled 1MDB issues, where another interest payment is due on Wednesday. Therefore, the ongoing uptrend is merely an adjustment from oversold and the upsides could be capped at its near term resistances at the 1,650-1,680 levels. The 1,630 level, meanwhile, will continue to serve as the main near term support.
• We also think that the interest on the lower liners and broader market shares could pick up amid the ongoing technical rebound as retail players are likely to undertake short-term trading activities and this will help to temporarily shore-up market breadth.

COMPANY BRIEFS

• Bursa Malaysia has publicly reprimanded Ire-Tex Corp Bhd for failing to ensure that its 4Q2014 quarterly report, which was submitted on 27th February 2015, was factual and accurate after taking into account various adjustments that the company later revealed on 8th May 2015. The adjustments included impairment of trade receivables and the reversal of a provision for profit guarantee in its other income.
• Consequently, there was a deviation between the group’s net profit as stated in the quarterly results and the audited financial statements. The group’s net profit of RM2.8 mln in 2014 turned out to be a loss of RM6.2 mln. (The Star Online)
• MISC Bhd’s 1Q2016 net profit rose 55.3% Y.o.Y to RM795.4 mln, boosted by gains from associates following the inclusion income from non-controlling interests of RM224.4 mln, which offsets a net impairment provision of RM73.4 mln. Revenue for the quarter, however, slipped 3.8% Y.o.Y to RM2.39 bln. (The Star Online)
• The KLCC Property Holdings Bhd (KLCCP), 1Q2016 earnings rose 2.4% Y.o.Y to RM182.8 mln due to higher rental rates. Revenue for the quarter also gained 2.4% Y.o.Y to RM334.8 mln. An interim dividend of 8.6 sen (KLCCP: 2.85 sen; KLCC REIT: 5.75 sen) was declared. (The Star Online)
• British American Tobacco (M) Bhd’s (BAT) Managing Director, Stefano Clini will vacate his current position in the cigarette company after concluding his current assignment at the company. (The Star Online)
• NWP Holdings Bhd's Chief Executive Officer (CEO), Wong See Ming has been re-designated as Executive Director (ED) of the company with immediate effect. Wong was appointed to the Board of Directors on 29th January 2001 as ED and was re-designed as CEO on 18th August 2008. (The Edge Daily)
• TSR Capital Bhd has bagged a RM90.0 mln contract, under Package DPT 203, to undertake earthworks and other associated works for the Serdang depot as part of the Mass Rapid Transit Sungai Buloh-Serdang-Putrajaya Line. The project's construction period is 24 months and shall commence upon the notification of date for site possession by project delivery partner. (The Edge Daily)
• Luxchem Corp Bhd's 1Q2016 net profit jumped soared 351.6% Y.o.Y to RM7.0 mln as the previous corresponding quarter’s earnings were skewed by share option expenses amounting to RM8.5 mln. Revenue for the quarter, however, fell 7.3% Y.o.Y RM160.0 mln. (The Edge Daily)
• Icon Offshore Group Sdn Bhd (IOGSB), a subsidiary of Icon Offshore Bhd, has bagged a vessel order worth RM42.0 mln from ExxonMobil Exploration and Production Malaysia Inc, marking its first contract win in 2016. The contract is for the provision of two straight supply vessels and will commence in May 2016 for a period of two years with an extension option of one year. (The Edge Daily)
• Flonic Hi-Tec Bhd’s subsidiary, Jiwa Project Sdn Bhd has bagged a project management and subcontract works for an affordable housing project in Malacca from B.S. Civil Engineering Sdn Bhd worth RM30.9 mln. Under the contract, Flonic Hi-Tec is tasked to undertake the project management and subcontract works for a proposed affordable housing development project at Taman Sutera Wangi, Melaka (Fasa 3). (The Edge Daily)
• Silk Holdings Bhd's wholly-owned Jasa Merin (Labuan) Plc has received a RM55.3 mln Islamic financing from Affin Islamic Bank to finance 70.0% of its acquisition of three units of oil/chemical tankers. The Murabahah term financing-I 1, 2 and 3, Wa'ad Mulzim/Bay Al Sarf Islamic Forex Risk-I has an eight-year tenure, including a one-year grace from the first drawdown. (The Edge Daily)
• mTouche Technology Bhd is expected to recover a RM6.3 mln loss from to a financial irregularity in 2009 following a favourable judgment from the Kuala Lumpur High Court over its civil suit against Pearl Legend International Ltd (PLIL) and two individuals.
• The decision involves the termination of an agreement dated 2nd January 2009 between mTouche's wholly-owned unit, Mobile Touchetek Sdn Bhd (MTSB) and PLIL. mTouche expects to recover RM1.7 mln in 10 monthly installments (inclusive of interest payments) from Goh Eugene and Tan Wee Meng from 28th May 2016 to 28th February 2017. (The Edge Daily)
• The Employees Provident Fund (EPF) has re-emerged as Top Glove Corporation Bhd's substantial shareholder with a shareholdings of 5.3%. EPF was accumulating shares in the world's largest rubber glove maker since end April. EPF has picked up 4.0 mln Top Glove shares from 28th April 2016 to 3rd May 2016. EPF had ceased to be a substantial shareholder in Top Glove in March 2015. (The Edge Daily)
• The High Court of Malaya had today rejected the judicial review application by CLIQ Energy Bhd's management team, led by Managing Director and Chief Executive Officer Ahmad Ziyad Elias to prevent the company from being liquidated. The judicial review application followed the Securities Commission Malaysia's decision last February to reject CLIQ's request for more time to pursue its qualifying acquisition. (The Edge Daily)
• LKL International Bhd, en route to listing on Bursa Malaysia’s ACE Market, has received an oversubscription rate of 92.8x for its 8.0 mln shares made available for public subscription. A total of 12,642 applications for 750.7 mln shares were received from the public (including 6,621 applications for 351.0 mln shares under the Bumiputra category). The applications for the Bumiputra category represented an oversubscription of 86.7x for the 4.0 mln shares on offer. (Bernama)

Source: M+ Online Research - 9 May 2016