Tracking the positive developments on Wall Street overnight after the U.S. Federal Reserve left interest rate unchanged again, the FBM KLCI (+0.6%) recovered most of its losses from its previous session, but the key index halted a four consecutive weekly winning streak to close 1.0% W.o.W lower. The broader market ended mixed, while the FBM Fledgling (+0.2%) was the main outperformer among the lower liners.

Market breadth turned positive as gainers edged losers on a ratio of 357-to-331 stocks. Traded volumes, however, dipped 28.8% to 1.60 bln shares as investors opt to remain on the sidelines ahead of the Brexit vote.

More than two-thirds of the key index constituents advanced, led by BAT (+64.0 sen), followed by Hong Leong Bank (+44.0 sen), UMW (+32.0 sen), PPB Group (+30.0 sen) and MISC (+20.0 sen). United Plantations (+78.0 sen) topped the broader market gainers list, while consumer products stocks like MSM (+22.0 sen), Nestle (+22.0 sen) and Calsberg (+18.0 sen) advanced. DKSH added 12.0 sen after the EPF emerged as a substantial shareholder in the company.

Notable losers on the broader market were Aeon Credit (-26.0 sen), Lysaght Galvanized (-18.0 sen), Riverview Rubber (-18.0sen), Warisan (-17.0 sen) and Magni-Tech (-14.0sen). There were only four decliners on the big board – Hong Leong Financial Group (-24.0 sen), Petronas Dagangan (-12.0 sen), SapuraKencana Petroleum (-2.0 sen) and Genting Malaysia (-1.0 sen).

Japanese stockmarkets rebounded as the Nikkei gained 1.1%, but recorded its biggest weekly decline since February 2016, falling 6.0% W.o.W. The Hang Seng index rose 0.7% led by gains in banks and insurance companies, while the Shanghai Composite index climbed 0.4%, boosted by the consumer and healthcare sector. ASEAN stockmarkets, meanwhile, ended mostly positive.

Wall Street retreated last Friday as the Dow closed 0.3% lower after risk appetite dwindled ahead of the Brexit referendum. On the broader market, the S&P 500 fell 0.3% as the weakness in healthcare sector (-1.1%) outweigh the gains in the energy sector (+0.8%), while the Nasdaq slipped 0.9%, dragged down by Apple Inc (-2.3%)

Earlier, European stockmarkets rebounded from a four-month low as the FTSE gained 1.2% to re-take the 6,000 psychological level amid the abating Brexit fears. Both the CAC and DAX added 1.0% and 0.9% respectively, while the Athex Composite jumped 5.4% after Eurozone Finance Ministers agreed to disburse fresh loans worth €7.50 bln to Greece.

THE DAY AHEAD

With the Brexit vote looming, we think that market breadth on Bursa Malaysia could continue to stay thin over the next few days as investors are likely to continue staying on the sidelines. The FBM KLCI, however, should remain rangebound on the back of the support from domestic institutions and linger within the 1,620 and 1,630 levels over the near term.

For the day, however, we think that stocks could retreat slightly on profit taking as well as on last Friday’s weakness on Wall Street. Still the downside risk will be cushioned by the thin volumes.

We also think similar conditions will prevail among the lower liners and broader market shares as retail investors continue to stay on the sidelines.

COMPANY BRIEFS

SP Setia Bhd has determined the issue price of the new shares issued under its fifth dividend reinvestment plan (DRP) to be at RM2.70 each. The issue price was based on calculated on a 19.0 sen adjustment made to the 5-day VWAMP to RM2.90 per share, with a further 29.0 sen (10.0%) discount given.

The entitlement’s dates has been fixed on 4th July 2016, while the expected date for the allotment and issuance of the new shares, as well as payment for the cash dividend to shareholders, is 3th August 2016. (The Edge Daily)

Ivory Properties Group Bhd is partnering with LLK Properties Sdn Bhd and its three directors who will act as guarantors, to jointly develop a mixed development project on 29 plots of land, which collectively measure 3,351 sq. m. located in the Klang Valley.

LLK has obtained the conditional development order and layout approval dated 7th March 2016 and LLK will be entitled to 27.0% of the total value of all the units sold on the development. (The Star Online)

Hiap Teck Venture Bhd's (Hiap Teck) rights issue of its 5.0% Redeemable Convertible Unsecured Islamic debt Securities (RCUIDS), which will raise up to RM213.7 mln for working capital, has been oversubscribed by 17.6%.

The company announced that it has received 274.7 mln and another 60.6 mln from excess applications on 13th June 2016 - the date for the closing and acceptance of payment. The RCUIDS is issued on the basis of two RCUIDS-for-every five existing shares held. (The Edge Daily)

Johore Tin Bhd has proposed a corporate exercise which includes a 1-to-2 share split and up to 77.8 mln bonus issue to its shareholders.

The bonus issue will be on the basis of 1 bonus share-for 3 shares after the subdivision. The proposals are expected to be completed by the 3Q2016 but the entitlement’s date has yet to be fixed.

Astino Bhd has re-designated its Chief Executive Director, Ng Back Teng as the group's Executive Chairman. He will be replaced by Ng Hung Seh who was previously the group's Chief Operating Officer.

Hung Seh is responsible for the marketing and sales of metal roofing and awning products for the group and has more than 20 years of experience and expertise in the building related materials business, while Back Teng is responsible for the growth of the group's metal roofing and awning products. (The Edge Daily)

Sarawak Consolidated Industries Bhd has announced that the Executive Non-Independent Director and Chief Executive Office of Kretam Holdings Bhd, Freddy Lim Nyuk Sang has emerged as its substantial shareholder.

Lim has acquired 11.0 mln shares off-market on 14th June 2016 representing a 15.0% equity stake in the company for RM7.0 mln. The purchase price was at 63.5 sen apiece, which was 9.3% lower as compared with its open market price of 70.0 sen a share then.

Poh Kong Holdings Bhd's 3QFY16 net profit fell 23.2% Y.o.Y to RM6.08 mln from RM7.9 mln per share in the previous corresponding period, due to weaker sales volume. Revenue also contracted 3.7% Y.o.Y to RM202.5 mln compared to RM210.3 mln in 3QFY15.

The company’s cumulative 9MFY16 net profit fell 56.2% Y.o.Y to RM8.2 mln from RM18.7 mln in 9MFY15, due to weaker revenue, which was 6.9% Y.o.Y lower at RM578.2 mln, compared to RM620.8 mln a year ago. (The Edge Daily)

Source: M+ Online Research - 20 June 2016