The FBM KLCI staged another minor pullback to around the 1650 level to close 0.4% lower, which was in-line with the performance of regional stockmarkets. The FBM Small Cap (+0.04%) was flattish, while the FBM Fledging (+0.5%) and FBM ACE (+1.0%) indices reversed earlier losses to close in the green. Meanwhile, most of the broader market sunk into the red on profit taking activities.

Market breadth remained negative as decliners marginally outpaced advancers on a ratio of 372-to-347 stocks. Traded volumes contracted 1.7% to 1.74 bln shares in the absence of fresh catalysts to spur investors’ trading interest.

Oil and gas heavyweights like Petronas Dagangan (-20.0 sen) and Petronas Gas (- 20.0 sen) dragged the key index lower, while other key index losers include PPB Group (-38.0 sen), Ambank (-19.0 sen) and Sime Darby (-15.0 sen). Elsewhere, significant decliners were Panasonic Malaysia (-22.0 sen), Lafarge Malaysia (- 20.0 sen) and Malaysia Airport Holdings (- 16.0 sen). Meanwhile, breweries-related counters like Calsberg and Heineken Malaysia declined 18.0 sen each.

Key advancers on the broader market were United Plantations (+42.0 sen), Sam Engineering (+34.0 sen), SLP Resources (+21.0 sen), Press Metal (+15.0 sen) and Warisan (+15.0 sen). Hong Leong Financial Group (+24.0 sen), KLCC (+18.0 sen), Axiata (+8.0 sen) and Genting (+7.0 sen) were the gainers on the FBM KLCI. BAT (+14.0 sen) pared off its earlier day gains to close slightly up after it announced that it has signed a contract to sell its Petaling Jaya land to LGB Properties.

The Nikkei closed 1.0% lower to 16,668.4 points due to a stronger Yen, which hit a five-week high against the U.S. Dollar. There were no trading in Hong Kong and Mainland China as the Hang Seng and the Shanghai Composite Index were closed for the Dragon Boat Festival holidays.

A general negative tone surrounded U.S. stockmarkets as the Dow fell 0.1%, in-line with falling crude oil prices. The S&P 500 contracted 0.2%, beaten down by materials and financial stocks, while the Nasdaq lost 0.3%.

European stockmarkets also slid yesterday following the plunge in mining and housing stocks after the Royal Institution of Chartered Surveyors forecasts that the home prices in the U.K will drop over the next three months. The FTSE tumbled 1.1%, while, the CAC shed 1.0%. Meanwhile, the DAX declined 1.3% on the back of ECB’s bond buying program and worries over U.K.’s exit from the E.U.

THE DAY AHEAD

It appears that the key index has reached its near term target of 1,660 level, which is also proving to be a significant resistance for the FBM KLCI to clear. At the same time, the past two day’s corrective phase has also placed the key index at the 1,650 support level, thereby leaving it at the crossroads.

With the general market sentiments turning slightly weaker, however, we think that the consolidation may persist over the near term and the 1,640 support level could come back into play. The dearth of fresh leads, coupled with the lower oil prices, could profit prompt further profit taking on the heavyweights.

The trading environment on the lower liners and broader market shares will also continue be mixed as the market awaits the U.S. interest rate and Brexit decisions over the next few weeks.

COMPANY BRIEFS

Eco World Development Group Bhd (EW Bhd) is undertaking a new joint-venture (JV) mixed development project next to Setia Alam, the award-winning township in Shah Alam that is developed by SP Setia. EW Bhd’s unit, Eco Grandeur Sdn Bhd has entered into a JV with Cascara Sdn Bhd, a company controlled by Sarawak businessman, Tan Sri Bustari Yusuf to develop an eco-themed mixed residential and commercial development, known as Eco Ardence with a potential gross development value (GDV) of RM8.58 bln.

The project will be developed over 15 years on 533.9-ac. of freehold land in Bukit Raja and will feature a mix of landed bungalows, semi-detached houses and terrace houses along with integrated high, mid-and-low-rise residential and commercial units within a fully strata-titled gated and guarded environment. (The Star Online)

AWC Bhd, an integrated facilities management service provider, has been awarded an RM130.0 mln contract from the Government for the maintenance of Terminal Bersepadu Selatan (TBS) in Bandar Tasik Selatan. The contract is for a period of five years, effective from 1st September 2016.

TBS is a new main long-distance bus terminal in Kuala Lumpur which integrates with the Bandar Tasik Selatan Rail Interchange Station and together forms the TBS-BTS 24-hour integrated transportation hub.

This project award extends AWC’s involvement in the maintenance works undertaken by the group under the concession segment from the Federal Government for the states of Johor, Malacca, Negri Sembilan and Sarawak. (The Star Online)

The Singapore Exchange (SGX) has granted approval to Top Glove Corp Bhd for the glovemaker’s proposed secondary listing on the Main Board of the SGX. The glove producer has received a letter of conditional eligibility-to-list from SGX with several conditions.

Among conditions are that the company needs to maintain its primary listing on Bursa Malaysia and that it submits a written undertaking stating it will comply with requirements of the listing manual of the SGX-ST. (The Edge Daily)

ML Global Bhd will see changes at its management level after LBS Bina Group Bhd assumed control with a 51.2% stake in the company. ML Global will focus on construction jobs moving forward and is currently tendering for government jobs.

To recap, a total of 232,696 ML Global shares were sold to LBS Bina during and after the latter's unconditional mandatory takeover offer period, which closed on 24th May 2016. LBS Bina, however, already announced that it wants to maintain ML Global's listing status. (The Edge Daily)

Menang Corp (M) Bhd’s Chairman Datuk Abdul Mokhtar Ahmad has pared down his direct stake in the company to 0.013%, from 1.3% on 24th May 2016. The Chairman disposed of 3.4 mln shares in six tranches between 18th May 2016 and 1st June 2016.

Apart from the direct stake of 0.013%, he also owns an indirect stake of 11.3% in the company. (The Edge Daily)

Malaysia Building Society Bhd (MBSB) has fixed the issue price for its rights issue at RM1.00 each with the entitlement basis of one rights share-for-every one existing MBSB share held.

The first call of 59.0 sen for each rights share will be payable in cash on application, while the second call of 41.0 sen will be capitalised from MBSB's share premium account. The entitlement date of the rights issue is 24th June 2016, while the date of the sale of provisional allotment of rights is 1st July 2016. (The Edge Daily)

Magna Prima Bhd’s wholly-owned subsidiary, Magna City Shah Alam Sdn Bhd (MCSASB) has proposed to acquire a piece of leasehold land measuring about 5.3-ac. in Shah Alam, from Regalia Raintree Sdn Bhd (RRSB) for RM43.0 mln, to undertake a residential development.

MCSASB will undertake the development, construction and completion of the proposed residential development on the land which has an estimated gross development value of RM220.8 mln. The total development cost is estimated to be RM180.7 mln with an expected gross profit of RM40.1 mln. The development is expected to commence in 3Q2016 and is estimated to be completed by 2019. (The Edge Daily)

Source: M+ Online Research - 10 June 2016