The FBM KLCI (-0.6%) traded in the red territory last Friday amid the continued selling pressure. The key index also extended its losses to a third consecutive week as well, closing 0.6% lower. The lower liners mostly retreated, with the exception of the FBM Ace (+0.2%), while on the broader market, the Consumer Products (+0.3%) and Technology (+0.6%) sub-indices bucked the overall negative trend to finish in the green.

Market breadth was negative as losers outnumbered gainers on a ratio of 461-to- 300 stocks. Traded volumes, however, rose 6.4% to 1.85 bln shares due to some mild buying support on selective heavyweights on the Main Board.

Petronas Gas (-20.0 sen) led the heavyweights losers on the key index, followed by Hong Leong Financial Group (-18.0 sen), Genting (-15.0 sen), Digi (- 13.0 sen) and Petronas Chemicals (-12.0 sen). On the broader market, decliners include PIE Industrial (-30.0 sen), Top Glove (-10.0 sen), Boustead Heavy Industries Corp (-9.0 sen) and UEM Edgenta (-8.0 sen). Meanwhile, Genting Plantations dropped 8.0 sen as Malaysian crude palm oil fell due to lower demand.

On the contrary, chart-toppers were Calsberg (+26.0 sen), Panasonic Malaysia (+22.0 sen), United Uli Corp (+17.0 sen), Air Asia (+12.0 sen) and Ajinomoto (+12.0 sen). Only six out-of-thirty stocks on th FBM KLCI advanced last Friday, which included BAT (+RM1.10), PPB Group (+8.0 sen), Tenaga (+8.0 sen), KLK (+4.0 sen) and Sime Darby (+1.0 sen).

Asian key benchmark indices was splashed in red as the Nikkei closed 0.4% lower, dragged down by the declining crude oil prices and cautious investors sentiment ahead of the Bank of Japan’s monetary policy this week. Meanwhile, the Hang Seng and Shanghai Composite index surrendered 1.2% and 0.3% respectively after reports of George Soros’ bearish bets against China. ASEAN stockmarkets were mostly down on the last day of the week.

Wall Street finished on low note as worries over global growth and a sharp fall in crude oil prices sent the three major U.S. indices lower. The Dow decreased by 0.7% for the second consecutive day, mainly due to the drag on financial stocks. The S&P 500 (-0.9%) was beaten down to 2,96.1 points, while the Nasdaq shed 1.3%.

European stockmarkets ended in the negative zone, owing to the weakening of the Euro vs. the Dollar, as well as sharp declines in banking and commodity-related stocks. The FTSE lost 1.9%, while the CAC and the DAX plunged 2.2% and 2.5% respectively. Meanwhile, the benchmark 10-year German bond yields fell to a new low last Friday as investors fled the equity market for less risky assets ahead of Britain’s possible exit from the European Union.

THE DAY AHEAD

The past two session’s weak spell is nullifying the FBM KLCI’s recent recovery and is leaving the market in a frail mode once again. It also means that the market is finding strong resistance around the 1,650-1,660 levels and the market is likely to continue trending lower over the near term amid the weakness on key overseas stockmarkets last Friday.

Market sentiments will also be affected by the wariness over the upcoming FOMC meeting, albeit the odds are against a rate hike this month, as well as the Brexit referendum towards the end of the month, where Britons are leaning towards leaving the European Union.

Under the prevailing environment, we expect the market consolidation to continue with the 1,640 level unlikely to provide a strong support and the FBM KLCI may retrace back to the 1,620 support level in due course.

COMPANY BRIEFS

Hektar Real Estate Investment Trust (Hektar REIT), is acquiring 1Segamat Shopping Centre from EcoFirst Consolidated Bhd’s unit Tashima Development Sdn Bhd for RM104.0 mln. The mall, which opened in August 2013, has net lettable area of 223,439 sq.ft. and enjoys an occupancy rate of 96.4%.

In conjunction with the proposed acquisition, the company proposes to undertake a renounceable rights issue of new units in Hektar REIT to the unitholders on an entitlement date to be determined later to raise gross proceeds of up to RM75.0 mln to part-finance the purchase and to issue new units to the manager as part of the acquisition fee of RM1.0 mln. (The Star Online)

MKH Bhd is buying a 75% stake in Indonesia’s PT Sawit Prima Sakti (PTSPS) for RM15.0 mln cash. PTSPS owns 2,445-ha. of plantation land in East Kalimantan. As part of the acquisition, it will also absorb debts amounting to US$7.1 mln or RM29.0 mln, bringing total cost of land to some RM44.0 mln.

The purchase of the sale shares is at a discount of about RM2.5 mln, based on the adjusted market value of the plantation. (The Edge Daily)

Berjaya Food Bhd’s (BFood) 4QFY16 net profit dipped 50.6% Y.o.Y to RM3.2 mln due to lower contribution from the Kenny Rogers Roasters operations in Malaysia as Malaysian consumers became more cautious and prudent in their spending, post implementation of the goods and services tax (GST), coupled with steep depreciation of the Ringgit which had weighed down on the profit margin of Starbucks’ operations. Revenue for the quarter, however, added 7.9% Y.o.Y to RM139.1 mln.

For FY16, cumulative net profit shrunk 87.1% Y.o.Y to RM22.9 mln. Revenue for the year, however, grew 47.1% Y.o.Y to RM554.2 mln. A fourth interim dividend of one sen a share, payable on 28th July 2016 was declared. (The Edge Daily)

Perisai Petroleum Teknologi Bhd has again delayed the delivery of its second jack-up rig Perisai Pacific 102 to no later than 31st October 2016, due to soft market conditions.

Perisai has reached an agreement with PPL Shipyard Pte Ltd on the second delay. Both parties have further agreed that Perisai will not bear cost for the Perisai Pacific 102 from 1st April 2016 onwards. (The Edge Daily)

Trive Property Group Bhd was issued with an Unusual Market Activity (UMA) query by Bursa Malaysia on the recent surge in its share price and volume. Its share price has more than doubled to 10.5 sen on 10th June 2016, from 4.5 sen — the closing price it recorded on 8th June 2016.

Trading volume on last Friday was at 176.1 mln, significantly higher than its 200-day average volume of 4.2 mln. (The Edge Daily)

Source: M+ Online Resesarch - 13 June 2016