The FBM KLCI endured a choppy trading session yesterday before closing 0.1% higher to record its’ fourth consecutively winning streak, led by selective banking and telco heavyweights. Amid the mixed broader market, however, the lower liners closed mostly lower as the FBM Fledgling and FBM Small Cap fell 0.2% and 0.9% respectively.

Market breadth turned negative as losers outpaced gainers on a ratio of 406-305 stocks. Traded volumes decreased 17.9% to 1.11 bln shares as investors retreated to the sidelines ahead of the Brexit referendum.

A-third of the key index constituents rose, led by Tenaga (+24.0 sen), followed by KLK (+12.0 sen), Genting Malaysia (+11.0 sen), Maxis (+6.0 sen) and CIMB (+4.0 sen). Notable gainers on the broader market were consumer products stocks like Heineken (+42.0 sen), Dutch Lady (+20.0 sen) and Carlsberg (+12.0 sen), while United U-Li Corporation and SAM Engineering added 39.0 sen and 19.0 sen respectively.

On the other side of the trade, Far East Holdings (-37.0 sen), Khind Holdings (- 15.0 sen), Lii Hen (-13.0 sen) Aeon Credit (-12.0 sen) and Kein Hing (-11.0 sen) were amongst the biggest decliners on the broader market. Petronas linked companies – Petronas Gas (-12.0 sen), Petronas Dagangan (-10.0 sen) and Petronas Chemicals (-4.0 sen) all fell, while other big board losers include BAT (- 22.0 sen) and Sime Darby (-7.0 sen).

Asia benchmark indices closed mostly higher as the Nikkei added 1.1%, anchored by steel manufacturers like JFE Holdings (+5.6%) and Nippon Steel & Sumitomo Metal (+5.5%), while the Hang Seng Index closed 0.4% higher. The Shanghai Composite Index, however, fell 0.5%, dragged down by the materials sector (- 0.9%). ASEAN stockmarkets, meanwhile ended mixed.

U.S. stockmarkets rallied overnight as the Dow gained 1.3% on optimism that the U.K. will vote to remain in the European Union, offsetting the weak new home sales data for May. On the broader market, the S&P 500 jumped 1.3%, led by gains in the financial sector (+2.1%), while the Nasdaq closed 1.6% higher.

European benchmark indices – the FTSE (+1.2%), CAC (+2.0%) and DAX (+1.9%), also rallied to close at three-week high ahead of the Brexit referendum outcome. Key winners on the Stoxx Europe 600 Index were the financial (+2.2%) and oil & gas (+1.9%) sectors.

THE DAY AHEAD

With the counting of the Brexit vote underway and suggestions that Great Britain is likely to remain in the European Union, we think the Malaysian stock market could continue to head higher to end the week. The positive overnight market performances of key global stock indices would also provide some optimism to the Malaysian stockmarket.

On the way up, the FBM KLCI could head towards the 1,650 level, where the key index could see some resistance. On the downside, meanwhile, the 1,620 level is the main support for now.

Meanwhile, the more positive market undertone could also entice more retail investors back into the market, but we think their interest could be mostly muted as the general market cautiousness could result in quick profit taking activities and limit their upsides.

COMPANY BRIEFS

Vivocom International Holdings Bhd has clinched two construction contracts worth a cumulative RM37.8 mln in Sungai Buloh, Selangor, and Lorong Stonor, Kuala Lumpur.

The group was appointed by Kiara 5 Development Sdn Bhd as its turnkey contractor for the construction of a 19-unit low-density apartment block in Kampung Ara, Sungai Buloh, valued at RM25.0 mln. The project would start upon site possession, with completion expected within 18 months.

Further, Vivocom also secured a RM12.8 mln contract from Lim Hoo Seng Construction Sdn Bhd for the design, fabrication, supply, delivery and installation of aluminium and glazing works for a 41-storey serviced apartment on Lot 256, Section 63, Lorong Stonor. The project is slated to be completed within 35 months from 28th March 2016. (The Star Online)

Sime Darby Bhd has sold all of it’s shareholding in Hotel Equatorial Melaka to Permodalan Nasional Bhd (PNB) for RM55.4 mln in cash.

Its 55.0% equity shareholding in Syarikat Malacca Straits Inn Sdn Bhd (SMSI) and also its 78.6% equity interest in SMSI’s Redeemable Preference shares was disposed via its wholly-owned unit, Sime Darby Property Bhd. The transaction was completed on 21st June 2016. (The Edge Daily)

AMMB Holdings Bhd (Ambank Group) has disposed its entire 80.0% equity interest in AmTrustee Bhd (AmTrustee) to several parties, including Rockwills International Group chairman Johari Low Abdullah, for RM9.1 mln.

The other buyers include PL Advisory Services Sdn Bhd, PLAS Capital Sdn Bhd and PLAS Equity Sdn Bhd. (The Edge Daily)

Gabungan AQRS Bhd has received a Letter of Intent (LOI) from PR1MA Corp Malaysia on 21st June 2016 for the purchase of 1,140 units of affordable homes along with 19.0 ac. of a leasehold land located in Putra Perdana, Sepang, for RM314.0 mln.

A definitive contract is expected to be executed in three months from the date of the LOI. The project is expected to be completed in three-and-a half years. (The Edge Daily)

Benalec Holdings Bhd has obtained the Department of Environment's (DoE) approval for the reclamation works for Phases 2 and 3 of its Tanjung Piai Integrated Petroleum & Petrochemical Hub and Maritime Industrial Park project, which includes a man-made island to be sited off the south-western coast of Johor.

The project entails land reclamation of the hub and the industrial park, which totals 3,487 ac., as well as the development of oil storage terminals and related marine facilities, which will be capable of accommodating vessels up to 350,000 dead weight tonnes

Benalec has also secured the development order and earthwork plans for its 1,672.8 ac. Pengerang Maritime Industrial Park at Teluk Ramunia, Johor, on 16th June. (The Edge Daily)

RCE Capital Bhd (RCECap) has set-up a Sukuk Murabahah asset-backed securitisation programme of up to RM900.0 mln in nominal value, via Al Dzahab Assets Bhd. The first issuance under the sukuk programme was launched on 21st June 2016, amounting to RM155.5 mln.

RCEM, a wholly-owned subsidiary of RCE Capital, is the originator of the loan receivables, forming the underlying assets for the sukuk programme. The former has also been appointed to act as the servicer of the debt. (The Star Online)

NTPM Holdings Bhd’s 4QFY16 net profit contracted 23.7% Y.o.Y to RM10.1 mln, from RM13.2 mln in the previous corresponding quarter, due to higher energy expenditures and labour costs. Revenue for the quarter, however, was 7.3% Y.o.Y higher at RM144.7 mln, from RM134.8 mln in 4QFY15. The group has proposed a single tier final dividend of 8.0%.

For FY16, NTPM recorded a 35.2% Y.o.Y jump in its net profit to RM57.7 mln, from RM42.6 mln in the last financial year, buoyed by stronger sales performance and margin improvements in its paper products segment and the lower selling, distribution and advertisement cost for its personal care products segment. Similarly, revenue also rose 9.9% Y.o.Y to RM601.7 mln, from RM547.5 mln in FY15. (The Edge Online)

Source: M+ Online Research - 24 June 2016