Tracking the positive close on Wall Street overnight, the FBM KLCI traded in the positive territory for most of the trading session yesterday, before finishing 0.5% higher, anchored by gains on selective telco and banking heavyweights. On the lower liners, the FBM ACE (-0.6%) underperformed, while the Properties sector fell marginally by 0.02%.

Market breadth remained negative as decliners slightly outnumbered losers on a ratio of 363-to-338 stocks. Traded volumes also fell by 11.0% to 1.01 bln shares amid the lack of fresh local catalysts.

Telco-related heavyweights like Maxis (+15.0 sen) and Axiata (+9.0 sen) rose after spectrum reallocation talks advanced by the telco players and EPF’s increased shareholdings in the two counters. Other key index leaders include BAT (+RM1.50), CIMB (+9.0 sen) and AmBank (+8.0 sen). Among the biggest gainers on the broader market include sin stocks Heineken Malaysia (+74.0 sen) and Calsberg (+32.0 sen), while other advancers include Fraser & Neave (+38.0 sen), LebTech (+33.0 sen) and Panasonic Manufacturing (+22.0 sen).

Hong Leong Industries (-22.0 sen) topped the broader market decliners list, followed by Lafarge Malaysia (-16.0 sen), Goldis (- 12.0 sen), Oriental Food Industries (-10.0 sen) and Amway (-9.0 sen). Significant decliners on the big board were Hong Leong Bank (-4.0 sen), Public Bank (-2.0 sen) and Astro (-1.0 sen). Petronas Chemicals and Petronas Dagangan also shed 2.0 sen each, despite higher crude oil prices at US$49.2 per barrel.

The Japanese stockmarket inched higher as the Nikkei (+0.6%) rose for the sixth consecutive day after investors shakes off the negative sentiments from Britain’s impending departure from the European Union, betting on support from global policy-makers to steady the markets. The Hang Seng Index jumped 1.9%, while the Shanghai Composite expanded 1.4%. ASEAN benchmark indices, meanwhile, ended mostly higher.

U.S. stockmarkets were closed on Monday for the U.S. Independence Day holiday, but European stocks slumped as banking stocks were beaten down, offsetting gains by the miners. The FTSE fell 0.8%, dragged down by home-builders, following Standard Life Investments' decision to halt the trading of its US$3.9 bln U.K. Real Estate fund as withdrawals increased on expectation of a property market slowdown. Meanwhile, the CAC slumped 0.9%, while the DAX lost 0.7%. Germany's largest electricity producer, RWE rose 3.8% after it announced plans of venturing into renewable energy, grid and retail business.

THE DAY AHEAD

The market is likely to stay on the quiet side on a shortened trading session ahead of the Hari Raya break as most market players likely to stay on the sidelines. However, we think there should be further upsides amid the continuing mild support from domestic institutions as they take advantage of the calmer market conditions to bargain hunt on selected index heavyweights.

This may result in the key index retesting the 1,660 resistance level, but we think the upsides will be limited given the lack of participation and fresh market catalyst. The broader market shares and lower liners are expected to remain mixed-to-lower as retail investors would likely remain on the sidelines.

COMPANY BRIEFS

NWP Holdings Bhd has been appointed by Listari Marina (MM2H) Sdn Bhd as the main contractor on the proposed development of 160 units services suites in Malacca. NWP was required to seek for own funding and financing to carry out the works for the project.

Separately, NWP has also entered into a strategic partner MoU with SCEGC Installation Group Company Ltd to jointly develop a strategic partnership for any construction work in Malaysia. Under the MoU, any construction project obtained by either SCEGC or NWP shall be conducted through a joint venture which shall be limited strictly to the construction of property projects. (The Star Online)

MAA Group Bhd has declared an interim special dividend of 35.0 sen per share which will go ex on 21st July 2016 and payable on 5th August 2016. The company has sold its 75.0% stake in MAA Takaful Bhd to Zurich Insurance Co Ltd for RM393.7 mln and is looking to venture into manufacturing and education sectors to diversify its earnings. (The Star Online)

Tenaga Nasional Bhd (TNB) is seeking a judicial review of the directions issued by the Energy Commission (EC) and the Minister of Energy, Green Technology and Water, in relation to a new power purchase agreement (PPA) that it is negotiating with YTL Power Generation Sdn Bhd. The review is on an EC direction dated 7th April 2016 compelling TNB "to remove the incorporation of conditions precedent required by TNB" in a new PPA with YTL Power. (The Edge Daily)

Comintel Corporation Bhd has been given approval by the Energy Commission to provide renewable energy (RE)-derived power to TNB. The approval was issued to its subsidiary, Comintel Green Technologies Sdn Bhd's after it applied for a permanent license. (The Edge Daily)

KNM Group Bhd has accepted the offer for blanket working capital (BWC) facilities of up to RM160.0 mln from Affin Islamic Bank Bhd to part finance the projects the group has secured in relation to the Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor. The full utilisation of the BWC facilities could raise the group's gearing from 0.27x, as at 31st December 2015, to 0.32x. (The Edge Daily)

LTKM Bhd is buying a one-ac. freehold land for RM12.6 mln. The land is adjoined to a slightly bigger plot which the company purchased in January 2016 at Mukim Petaling, Kuala Lumpur. The total land area of 2.9-ac. will enhance the potential of the two plots as a whole. The acquisition will be undertaken by the group's wholly-owned subsidiary LTK (Melaka) Sdn Bhd from 11 individuals. (The Edge Daily)

Silver Ridge Holdings Bhd plans to halve the par value of its shares to 5.0 sen from 10.0 sen each, to reduce the group's accumulated losses of RM6.8 mln with the credit that will arise from the proposed corporate exercise. There could be at least RM6.1 mln credit arising from the move — assuming none of its outstanding warrants are exercised into new shares prior to the par value reduction or as much as RM8.8 mln, assuming the full conversion of its warrants. (The Edge Daily)

Zecon Bhd plans to reduce the par value of its shares by cancelling 90 sen out of the par value of every existing ordinary share of RM1.00 to reduce its existing accumulated losses, which amounted to RM80.4 mln as at 31st March 2016. The corporate exercise should give rise to asmuch as RM147.0 mln in credit. The group also proposed a bonus issue of 163.3 mln shares, on a one-for-one basis, on an entitlement date to be fixed.

Upon completion of the bonus issue, Zecon will implement a renounceable rights issue with free warrants, which entails the issuance of up to RM136.1 mln nominal value of five-year, 5.0% Redeemable Convertible Unsecured Loan Stocks. (The Edge Daily)

Source: M+ Online Research - 05 Jul 2016