The FBM KLCI extended its gains for the second straight week, rising 0.7% W.o.W amid window dressing activities, albeit losing 0.5% last Friday, on the back of a mild pullback to close at the 1,646.22 points. The FBM ACE (+0.2%) were the only advancer among the lower liners, while the Finance (+0.2%) and Plantations sub-sectors (+0.1%) bucked the negative trend on the broader market last Friday.

Market breadth was negative as losers outrun gainers on a ratio of 413-to-295 stocks. Traded volumes thinned, contracting 22.7% to 1.13 bln shares as trading activities experienced a slowdown due to the upcoming Hari Raya holidays.

BAT (-20.0 sen) led the heavyweight losers on the key index, followed by Genting (-19.0 sen), Axiata (-12.0 sen), PPB (-12.0 sen) and Genting Malaysia (- 10.0 sen). On the broader market, other major decliners were Lebtech (-33.0 sen), SLP Resources (-28.0 sen), Time Dotcom (-19.0 sen), Panasonic Manufacturing Malaysia (-18.0 sen) and Kawan Food (- 15.0 sen).

On the contrary, chart toppers include Nestle (+38.0 sen), followed by Heineken Malaysia (+32.0 sen), Scientex (+26.0 sen), Batu Kawan (+20.0 sen) and Triplc (+16.0 sen). Meanwhile, banking heavyweights such as Maybank (+6.0 sen) and Hong Leong Bank (+2.0 sen) advanced, while other significant Main Board gainers were Maxis (+6.0 sen), IHH Healthcare (+1.0sen) and IOI Corporation (+1.0 sen).

On the regional markets, the Nikkei rose 0.7%, marking its fifth consecutive day of gains, while the Hang Seng expanded 1.8%, buoyed by financials-related stocks and the Shanghai Composite Index gained 0.1%. ASEAN stockmarkets, meanwhile, closed mostly in the green.

In-line with the rally in global markets, Wall Street finished on a positive note for the fourth-straight day, backed by better-than-expected U.S. manufacturing data. The Dow rose by 0.1% to close slightly below the 17,950 level, while, the S&P expanded 0.2% on the back of gains from consumer discretionary stocks. The Nasdaq also added 0.4% to close higher last Friday. Micron Technology Inc., however, lost 9.2% - its biggest fall since October 2015, after it reported a 3QFY16 net loss and expects another loss in the next quarter.

European stockmarkets rallied on Friday, boosted by expectations that the European Central Bank would provide stimulus to support markets amid uncertainties after the Brexit. The FTSE gained 1.1%, while the DAX and the CAC was up by 0.1% and 0.9% respectively. Mining and exploration company, Fresnillo jumped 7.1% alongside the sharp rise in silver as well as other metal prices.

THE DAY AHEAD

With the Hari Raya break approaching, couple with few leads from overseas equity markets, we think that the stocks on Bursa Malaysia are likely to turn sideways as market interest wanes. Already, this is evidence by the thinning market volumes last Friday as many investors are staying on the sidelines ahead of the break as well as the continuing wariness over the Brexit events, even though many foreign equity markets are rallying.

Therefore, we think that the key index is likely to linger within the 1,640-1,650 levels with some mild institutional support. We also think that market interest will remain thin and this is likely to see the lower liners remaining on the wayside. MACRO BRIEF

Malaysia’s Nikkei Manufacturing Purchasing Managers' Index (PMI) in June fell to 47.1, down from 47.2 in May, marking its 15th consecutive month of decline. Underpinning the contraction in total new orders was a drop in international demand, with new export orders declining for the first time in five months.

The rate of decline was the sharpest in over three-and-a half years. Firms mainly linked the falls in international demand to the increase in sales tax reducing global competitiveness and unstable market conditions. (The Edge Daily)

COMPANY BRIEFS

Yong Tai Bhd has entered into a Memorandum of Understanding (MoU) with PGCG Assets Holdings Sdn Bhd to jointly develop and construct a mixed development properties in Puncak Alam, Ijok with a Gross Development Value (GDV) of about RM510.0 mln. Some 1,039 units of mixed development properties will be constructed on the leasehold land measuring approximately 22-ha.

Being the registered owner of the land, PGCG is entitled to 20.0% of the final GDV of the mixed development or at such percentage or GDV as may be mutually agreed upon at a later date between the two parties. The estimated GDV may be revised accordingly during the negotiation of the terms of the definitive agreement. (The Star Online)

Tropicana Corp Bhd’s indirect unit Tropicana Desa Mentari Sdn Bhd (TDM) is disposing of a freehold land with 251.6-ac. of developable area in Gelang Patah, Johor, for RM569.9 mln to Tiarn Oversea Group Sdn Bhd. As at 31st December

2015, the land has a net book value of RM413.7 mln. TDM originally bought the land for RM366.6 mln in September 2013. Tropicana expects a gain from the disposal was about RM55.5 mln (net of tax payable). The disposal was expected to be completed in 2H2022. (The Star Online)

Malaysian Resources Corp Bhd (MRCB) has bagged a RM188.7 mln contract from the Irrigation and Drainage Department to rehabilitate Pahang River. The main component of the project was to extend an additional 345 m in length to the breakwater constructed earlier and river protection works under the Pahang River Estuary Rehabilitation Project (Phase 3, Package 2) in Pekan. The construction works, spanning 24 months, is to be completed by July 2018. (The Star Online)

Astral Supreme Bhd is planning to undertake a high-rise residential project with an estimated Gross Development Value of RM152.2 mln on a leasehold plot of land in Seri Kembangan, Selangor, via a joint venture with the soon-to-be owner of the plot, Paragon Residencia Sdn Bhd.

The development is a 28-storey apartment with 256 residential units. The plot of land on which it will be built measures 3.2-ac. and is currently listed for agricultural use.

The project's gross development cost is estimated to be RM124.0 mln, which will yield a gross profit of RM28.2 mln. The project should commence in 1Q2017 and be completed in five years. (The Edge Daily)

Tiger Synergy Bhd has partnered with a private property developer Kemajuan Rowther Sdn Bhd (KRSB) to develop nine plots of land in Kuala Lumpur for an estimated cost of RM28.5 mln. Tiger Synergy will finance the proposed joint venture through internally-generated funds and bank borrowings. (The Edge Daily)

Travel services provider Warisan TC Holdings Bhd has inked a joint venture (JV) agreement with nine individuals to establish a travel and tourism business in Thailand. The JV is part of its regional expansion plan to establish a travel and tourism entity in Bangkok, Thailand, to provide a range of services, including corporate ticketing, inbound, outbound and corporate incentive. (The Edge Daily)

Xin Hwa Holdings Bhd, is acquiring a 1.8-ha. land in Pekan Baru Hicom in the Klang Valley from Maxis Broadband Sdn Bhd for RM25.7 mln to expand its market presence in the central region of Peninsular Malaysia. The freehold land comes with a single-storey detached warehouse with an annexed two-storey office building and other ancillary buildings.

The construction is expected to commence in 1H2017 and will be completed in 1H2018 at a cost of about RM20.0 mln. The acquisition is to be completed in three months and will be financed through a combination of internally-generated funds and bank borrowings. (The Edge Daily)

Microlink Solutions Bhd was issued an Unusual Market Activity (UMA) query by Bursa Malaysia on 1st July 2016, after the recent surge in its share price. Its share price, which was trading at RM1.22 on 23rd June 2016, has leapt 33.6% in just a week. (The Edge Daily)

Sumatec Resources Bhd has entered into a Heads of Agreement (HoA) consisting of a non-binding document, outlining the main issues relevant to a tentative agreement with Markmore Sdn Bhd proposed acquisition of 100% equity interest in Markmore Energy (Labuan) Limited from Markmore. The purchase consideration for the proposed acquisition shall be US$205.0 mln and US$45.0 mln for the reimbursement cost. (The Edge Daily)

Source: M+ Online Research - 04 Jul 2016