Tracking the positive sentiment in the regional stockmarkets and higher crude oil prices, on the back of a potential fall in crude oil supply, the FBM KLCI (+0.5%) closed higher. Most of the lower liners also ended on a higher note, with the exception of the FBM ACE (-0.3%). Meanwhile, the Mining sector was the sole underperformer amongst the broader market.

Market breadth remained positive as advancers outpaced decliners on a ratio of 463-to-302 stocks. Traded volumes fell 8.4% to 1.35 bln shares as investors stayed on the sidelines amid the global uncertainties.

Anchoring the advancers on the key index was BAT (+56.0 sen), followed by Hong Leong Financial Group (+38.0 sen), RHB Bank (+24.0 sen), Kuala Lumpur Kepong (+22.0 sen) and Petronas Gas (+16.0 sen). Notable gainers on the broader market include Scientex (+90.0 sen), MPI (+45.0 sen), Time Dotcom (+40.0 sen), Bintulu Port Holdings (+37.0 sen) and Nestle (+32.0 sen)

Meanwhile, among the biggest decliners of the day include Malaysia Airport Holdings (-24.0 sen), MSM (-17.0 sen), SCGM (-13.0 sen), Dutch Lady (-12.0 sen) and Hong Leong Industries (-9.0 sen). There were only two losers on the FBM KLCI – Maybank (-7.0 sen) and Genting Malaysia (-2.0 sen).

Japanese stockmarkets rallied after Japan’s Prime Minister, Shinzo Abe indicated possible stimulus measures to weather the global uncertainties arising from Britain’s decision to leave the European Union. The Nikkei jumped 1.6%, while the Shanghai Composite rose 0.7%, led by gains in drugmakers, industrial and consumer-staples companies. Meanwhile, Hong Kong’s Hang Seng Index climbed 1.3%. ASEAN stockmarkets, meanwhile, closed mostly higher.

Wall Street rallied alongside global markets for the second consecutive day as fears of a global economic slowdown after the Brexit vote last Friday receded. The Dow added 1.6%, while the S&P 500 gained 1.7% as crude oil prices (+4.2%) soared, bolstering energy stocks. Meanwhile, the Nasdaq gained 1.9% to close at 4,779.3 points.

European key benchmark indices recouped most of its earlier losses as market sentiment recovered on expectations that the status quo in the European Union will remain unchanged after Britain’s exit, at least in the near future. The FTSE (+3.6%) finished significantly higher, led by gains in the oil and gas-related counters and home-builders, albeit slightly offset by travel stocks following the recent terror attacks in Turkey. Meanwhile, banking heavyweights like Barclays (+4.9%) and HSBC (+2.1%) also helped fueled the market’s advance, despite Moody’s announcement to downgrade the U.K’s outlook from stable to negative. Similarly, the CAC and the DAX also closed on a positive note, higher by 2.6% and 1.8% respectively.

THE DAY AHEAD

With most key global indices making a strong comeback after the Brexit vote results, we think stocks on Bursa Malaysia will follow suit and move higher over the near term amid the improved market sentiments. This will also allow the mild bargain hunting and window dressing activities to continue over the near term.

Still, we think the upsides on the FBM KLCI could be limited to the 1,650 level for now as we also expect quick profit taking activities to materialise amid the continuing market wariness and the Brexit events are still unfolding, which will continue to leave equity markets in a choppy environment over the intermediate term.

The wariness is also expected to keep most investors on the sidelines and market breadth will stay thin. Therefore, we think that trading on the lower liners and broader market shares will remain mixed for now

COMPANY BRIEFS

Maxis Bhd's unit, Maxis Broadband Sdn Bhd (MBSB), is planning to raise up to RM10.0 bln via a Sukuk issuance of up to 30 years in tenure.

The funds raised will be used to finance the acquisition of businesses from its two other subsidiaries, which are Maxis Mobile Sdn Bhd and Maxis Mobile Services Sdn Bhd, as well as to fund the group’s capital expenditure and working capital needs. (The Star Online)

Hai-O Enterprise Bhd posted a 24.2% Y.o.Y growth in its 4QFY16 net profit to RM11.2 mln, from RM9.0 mln a year ago, while revenue for the quarter rose 25.8% to RM88.6 mln, from RM70.4 mln in the previous corresponding quarter.

Meanwhile, its FY16 net profit expanded by 22.2% Y.o.Y to RM36.4 mln, in comparison to RM29.8 mln in the previous year, mainly due to stronger revenue recorded at RM298.1 mln, from RM239.9 mln in FY15.

The stronger earnings was due to higher contribution from its multi-level marketing (MLM) division. The group has also proposed a final single tier dividend of 11.0 sen a share. (The Edge Daily)

Berjaya Corp Bhd’s (BCorp) 4QFY16 net loss widened by 34.0% Y.o.Y to RM368.9 mln, compared to RM275.0 mln in 4QFY15, on the back of an impairment loss of RM770.8 mln. Revenue, however, was 6.9% Y.o.Y higher at RM2.48 bln, from RM2.32 bln a year earlier.

For FY16, BCorp reported a net loss of RM174.7 mln, from a net profit of RM831.7 mln in FY15, mainly due to lower revenue, weaker investment-related income and higher investment expenditure. Revenue was at RM9.02 bln, compared to RM9.51 bln in the previous corresponding year.

Despite the loss, BCorp is proposing a final dividend of three treasury shares-for-every 100 ordinary shares held by the shareholders, equivalent to 2.16 sen per share. (The Star Online)

IJM Corporation Bhd has announced that the long-term prospects of its Royal Mint Gardens mixed-development project in London, U.K. are still intact despite the Brexit referendum results. The immediate impact, however, is mostly accounting as it could record unrealised forex translation losses arising from the Pound Sterling fluctuation.

Phase 1 of the London project, located on Royal Mint Street in Central London, has a take-up rate of 90.0%, while Phase 2 is still under the planning stage. Further, IJM noted that the entire project amounted to less than 5.0% of its property division's outstanding gross development value. (The Edge Daily)

Hiap Teck Venture Bhd has announced a turnaround in its earnings from six consecutive quarters of net losses. The group logged in a 3QFY16 net profit of RM10.6 mln from a net loss of RM5.2 mln in the previous corresponding year, mainly due to higher gross profit margin, on top of a share of profit from its jointly- controlled entity, Eastern Steel Sdn Bhd. Revenue, however, dropped 15.0% Y.o.Y to RM285.1 mln, from RM335.1 mln a year ago.

The group’s 9MFY16 net loss, however, widened to RM49.4 mln, from RM8.4 mln from 9MFY15, attributed to lower other income and a bigger share of loss from its jointly-controlled entity. Similarly, revenue fell 7.0% Y.o.Y to RM877.5 mln, from RM943.6 mln last year.

Moving forward, Hiap Teck expects global steel prices to show improvements after the Chinese government introduced measures to shut down loss-making and obsolete steel plants. (The Edge Daily)

George Kent (M) Bhd registered a 52.0% Y.o.Y hike in its 1QFY17 net profit to RM15.0 mln, in comparison to RM9.9 mln in the previous corresponding period, fuelled by stronger revenue contribution from its engineering division. Meanwhile, quarterly revenue doubled to RM123.0 mln, from RM59.0 mln in 1QFY16.

The group has also announced the award of a contract from Public Utilities Board (PUB), Singapore, for the supply and delivery of 323,630 units of DN15 Brass PSM-T water meters for S$4.9 mln (RM14.7 mln). (The Edge Daily)

Gamuda Bhd's net profit for the 3QFY16 shed 4.8% Y.o.Y to RM152.7 mln, compared to RM160.4 mln a year earlier, dragged down by the slowdown in the property market in Malaysia and tapering of the underground and elevated works for the Klang Valley Mass Rapid Transit Line 1 (KVMRT1) project, while revenue lost 15.6% Y.o.Y to RM467.3 mln, from RM553.8 mln in 3QFY15.

Further, Gamuda has also proposed a second interim dividend of six sen per share, which is payable on 28th July, 2016.

Its cumulative 9MFY16 net profit was down 10.3% Y.o.Y to RM474.0 mln, from RM528.5 mln in 9MFY15, mainly due to lower demand in the property market, while revenue contracted 15.1% Y.o.Y to RM1.51 bln, from RM1.78 bln last year.

The KVMRT1 was 86.0% complete as at end-May and was on track for full completion by July 2017, with no significant cost overruns so far. (The Edge Daily)

Source: M+ Online Research Online - 30 June 2016