Mild window dressing activities sent the FBM KLCI (+0.7%) higher for the third straight session as the key index traded in the positive territory throughout the entire trading session. The lower liners also ended mostly higher with the exception of the FBM Ace (-0.3%), while the Properties (-0.4%) and Plantations (-0.1%) sectors underperformed the mostly positive broader market.

Market breadth was relatively even with 385 gainers and 387 losers stocks. Traded volumes rose 8.6% to 1.46 bln shares on a slight return of risk appetite.

Topping the big board gainers was BAT (+RM1.90), followed by Genting (+13.0 sen), Sime Darby (+13.0 sen), Petronas Chemicals (+11.0 sen) and Public Bank (+10.0 sen). Consumer products stocks like Dutch Lady (+50.0 sen), Panasonic (+18.0 sen) and MSM (+16.0 sen) advanced, while other notable gainers on the broader market were KESM (+37.0 sen) and Tasek Corporation (+20.0 sen).

Among the biggest decliners of the day include Scientex (-46.0 sen), Frasers & Neave (-38.0 sen), MPI (-25.0 sen), Pharmaniaga (-18.0 sen) and Ta Ann (- 15.0 sen). Meanwhile, the biggest decliners on the FBM KLCI were Westports (-5.0 sen), Telekom Malaysia (- 5.0 sen), IOI Corporation (-3.0 sen), MISC (-2.0 sen) and Astro (-1.0 sen).

The Nikkei (+0.1%) closed marginally higher as most of its intraday gains were wiped off after the Japanese Yen rallied against the U.S. Dollar. The Hang Seng Index jumped 1.8% to close 0.1% higher Q.o.Q, but the Shanghai Composite (- 0.1%) halted a three day rally after enduring a choppy trading session. ASEAN stockmarkets, meanwhile, closed mostly higher.

U.S. stockmarkets registered their biggest three-day rally since February 2016 as the Dow gained 1.3%. On the broader market, the S&P 500 added 1.4%, led by consumer staples sector (+2.2%) as the index recorded a 1.9% Q.o.Q gain, while the Nasdaq closed 1.3% higher.

European benchmark indices also closed higher, led by the FTSE (+2.3%) after the Bank of England are reportedly considering loosening its monetary policy to tackle the Brexit fallout. Meanwhile, the CAC and the DAX added 1.0% and 0.7% respectively. Banking stocks, however, came under pressure after Deutsche Bank AG (-1.3%) and Banco Santander (-1.4%) failed a stress test, whereas Lloyds Banking Group Plc (-2.6%) fell after Fitch Ratings downgraded the U.K. government-guaranteed debt ratings to ‘AA’, from ‘AA+’.

THE DAY AHEAD

The FBM KLCI ended the month on a firmer note, albeit it is 2.3% YTD down for 1H2016. Although the window dressing activities are over and the key index made some decent headway, we think that there is still some upsides ahead of the Hari Raya break in the middle of next week. This could see the key index inching up to the 1,660 resistance level as we think that mild institutional support will continue to lift the market on the back of the firmer global market sentiments after the Brexit vote a week ago.

At the same time, there is still positivity among the key global stock indices and this will also help to provide some impetus for Bursa Malaysia stocks to head higher over the near term.

Although we expect the FBM KLCI to make further headway, the lower liners and broader market shares are likely to remain mixed with retail players likely to continue their quick profit taking activities ahead of the weekend, while others will opt to stay on the sidelines due to the generally cautious market environment.

COMPANY BRIEFS

Salcon Bhd is planning to acquire a plot of freehold commercial plot in Australia, which houses a carpark and a two-storey office building for A$37.9 mln (RM113.9 mln) in cash. The group expects to redevelop the land into a high-rise residential development with 336 apartment units and a retail podium space with an estimated gross development value (GDV) of A$230.0 mln (RM691.8 mln). (The Star Online)

Tan Chong Motor Holdings Bhd’s long-term corporate credit rating and the group’s RM1.5 bln medium-term notes programme (2014/2034) rating was downgraded to “A1/Stable”, from “AA2/Negative” by RAM Ratings.

Meanwhile, the short-term corporate credit rating of the group and its RM1.5 bln commercial papers programme (2014/2021) has been reaffirmed at “P1”.

The downgrade was due to the weakening fundamentals of Tan Chong’s financial profile, significant thinning of its profit margin, stiff competition and a challenging business environment which has left it susceptible to negative forex fluctuations. (The Star Online)

Hibiscus Petroleum Bhd has announced that the valuation of its interest in Anasuria Cluster oil and gas field was at US$208.0 mln (RM851.0 mln), which rose 84.0% from the previous valuation of US$113.0 mln. (The Edge Daily)

Chemical Company of Malaysia Bhd (CCM) is selling its 100.0% shareholding in both CCM Agriculture Sdn Bhd and CCM Agriculture (Sabah) Sdn Bhd, as well as certain trademarks relating to the Cock's Head brand to Hextar Fertilizers Group Sdn Bhd for RM48.6 mln.

The group has also agreed to dispose of two parcels of land, inclusive of the buildings on the land in Bintulu, Sarawak for RM35.0 mln. (The Star Online)

Muda Holdings Bhd‘s RM34.0 mln glazed paper machine will begin operations next month, after a one-year delay due to to some technical difficulties. The machine, used to produce glazed paper, is expected to cater to the rising demand for glazed paper in the overseas market. (The Star Online)

Yinson Holdings Bhd registered a 1QFY16 net profit jumped of 114.2% Y.o.Y to RM22.4 mln, from RM10.5 mln a year ago, on the back of improved gross profit margin and declining fair value loss on derivatives, despite the weaker revenue which shed 17.6% Y.o.Y to RM211.4 mln, from RM256.6 mln in 1QFY15. (The Edge Daily)

MRCB-Quill Real Estate Investment Trust (MRCB-Quill REIT) is purchasing Menara Shell in KL Sentral from Malaysian Resources Corp Bhd (MRCB) for RM640.0 mln, effectively raising the MRCB-Quill REIT’s asset portfolio size to RM2.27 bln, from RM1.63 bln as at December 2015.

Menara Shell includes a 33-storey office tower, a 5-storey podium, and a 4-storey basement car park with 915 parking bays and 110 motorcycle bays. The building has 557,053 sq. ft. of net lettable area and a current occupancy of 99.9%. (The Star Online)

KKB Engineering Bhd has secured two contracts collectively worth RM11.4 mln related to the supply of steel products.

The first contract from Cityon Development Sdn Bhd (CDSB) is for the supply of mild steel concrete lined pipe and specials for the proposed Bekalan Air Luar Bandar project in Sarawak is expected to be completed within the 1Q2017.

Meanwhile, the contract from Syarikat Sesco Bhd is for the annual supply and delivery of steel products and is scheduled to be completed within the 3QFY17. (The Edge Daily)

Insas Bhd is collaborating with GreenTech Catalyst Sdn Bhd, a government-linked company, to import electric vehicles into the country.

Insas and its 55.0% indirectly-owned subsidiary, PRAC Logistics Sdn Bhd, signed an agreement a joint-venture (JV) agreement with GreenTech Catalyst to formalise the relationship and responsibilities for the collaboration. (The Edge Daily)

The audit conducted by the Royal Malaysian Customs Department on Southern Steel Bhd‘s (SSB) subsidiary, Southern Steel Pipe Sdn Bhd (SSP) has concluded, with all documents previously taken into custody returned to the group. Consequently, orders to freeze its bank accounts were also lifted. (The Edge Daily)

Source: M+ Online Research - 01 Jul 2016