Tracking the positive sentiment on the regional key indices and favorable U.S. employment data, the FBM KLCI (+0.6%) snapped its two-straight sessions of losses to close in the green and traded in the positive territory for the entire trading session. The broader market also ended higher with the exception of the Technology (-0.3%) sub-index.

Market breadth turned positive as winners outnumbered losers on a ratio of 439-to- 327 stocks. Traded volumes improved 31.2% to 1.61 bln shares amid the positive market sentiment and increased foreign buying.

More than two-thirds the counters on the Main Board of Bursa advanced. Significant gainers include BAT (+58.0 sen), Genting (+25.0 sen), PPB Group (+22.0 sen), Maxis (+16.0 sen) and Petronas Dagangan (+16.0 sen). Meanwhile, the broader market advancers were Calsberg (+0.5 sen), Boustead Holdings (+39.0 sen), Nestle (+26.0 sen), Heineken Malaysia (+24.0 sen) and UMW Holdings (+24.0 sen).

Leading the decliners on the broader market were Dutch Lady (-RM1.80 sen), and Panasonic Manufacturing (-14.0 sen), while Enra Group, Pestech International and Shangri-La Hotels lost 10.0 sen each. Meanwhile, on the FBM KLCI, Hong Leong Financial Group (-34.0 sen), Telekom Malaysia (-2.0 sen), Genting Malaysia (- 1.0 sen) and Maybank (-1.0 sen) retreated.

Japanese stockmarkets finished strongly on Monday, as the Nikkei surged 4.0% following Prime Minister Shinzo Abe’s major election victory last Sunday. The Hang Seng index rose by 1.5%, while the Shanghai Composite grew 0.2%. Nintendo jumped 25.0% following the success of its new Pokemon GO smartphone game, which is the most downloaded game in the U.S. App store. ASEAN stockmarkets, meanwhile, closed mostly higher.

U.S. stockmarkets climbed as the Dow rose another 0.4%, backed by gains in the industrials, materials and financial-related counters. The S&P (+0.3%) closed at 2,137.2 points, its highest level since May 2015 as the Dollar rallied. Meanwhile, the Nasdaq added 0.6%.

European equities extended their winning streak for a third consecutive day as worries about global slowdown eased following better-than-expected U.S. employment data and hopes of fresh stimulus measures from Japan’s government after Shinzo Abe’s ruling coalition won the election. The FTSE (+1.4%) entered a bull market with more than 20.0% gains since its February low. Commodity-related counters like Anglo American (+8.6%) and Glencore (+6.3%) also buoyed the FTSE as miners rallied together with rising industrial metal prices. The DAX and CAC, meanwhile, surged 2.1% and 1.8% respectively.

THE DAY AHEAD

We expect stocks on Bursa Malaysia to continue their upsides on the back of the more positive global market undertone. As it is, equity markets are surging as investors expect more stimulus measures by central banks in view of the still anemic global economic growth environment and potentially an extension of the low interest rate environment due to the Brexit concerns.

On Bursa Malaysia, we expect the key index to retest the 1,660 level after the 1,650 level was cleared yesterday with market players taking advantage of the positive environment to undertake more trading activities, including the lower liners stocks.

COMPANY BRIEFS

SapuraKencana Petroleum Bhd's units and their partner have reached a mutual agreement with Petroliam Nasional Bhd (Petronas) to cease the Berantai Risk Service Contract (RSC).

The agreement for the development and production of petroleum from the Berantai field, located offshore Peninsular Malaysia, was signed between its units Sapura Energy Ventures Sdn. Bhd. and Kencana Energy Sdn Bhd with Petrofac Energy Developments Sdn Bhd for the RSC on 31st January 2011.

With the cessation of the RSC, which will be effective on 30th September 2016, Petronas will reimburse all outstanding capital and operational expenditures to the contractors by June 2017. As part of the arrangement, the ownership of Berantai FPSO will be transferred to Petronas. (The Star Online)

Borneo Oil Bhd, whose shares had seen a sharp rise in its trading volume, has prompted Bursa Malaysia Securities to issue an Unusual Market Activity (UMA) query on the company on 11th July 2016

Borneo Oil chairman, Tan Kok Chor reported that the company had taken advantage of the surge in gold price to unload some of its gold inventories last year and reaped some profits. In 2015, gold shot up to around US$1,285 per ounce from a low of US$1,050 per ounce. (The Star Online)

LPI Capital Bhd's 2Q2016 net profit jumped 148.0% Y.o.Y to RM212.6 mln, boosted by its stronger underwriting profit and also equity investments. Revenue for the quarter rose 11.3% Y.o.Y to RM339.3 mln.

For 1H2016, cumulative net profit added 94.5% Y.o.Y to RM278.0 mln. Revenue for the period rose 10.6% Y.o.Y to RM659.8 mln. An interim dividend of 25.0 sen was declared. (The Star Online)

DiGi.Com Bhd’s 2Q2016 net profit fell 9.4% Y.o.Y to RM420.6 mln due to an unrealised foreign exchange and derivatives losses of RM12.7 mln. Revenue for the quarter declined 3.9% Y.o.Y to RM1.66 bln.

For 1H2016, cumulative net profit decreased 13.1% Y.o.Y to RM819.7 mln. Revenue for the period dipped 5.7% Y.o.Y to RM3.31 bln. A second interim dividend of 5.4 sen per share, payable on 30th September 2016, was declared. (The Edge Daily)

Press Metal Bhd has proposed a share split and bonus issue as part of an internal reorganisation that will see a new entity assume its listed status. The share split involves the subdivision of its 50 sen shares into two shares of 25 sen each. The bonus issue will comprise up to 1.2 mln new subdivided shares to be offered on the basis of two bonus shares-for-every five subdivided shares.

The internal reorganisation proposes the assumption of the listing status of Press Metal by an entity tentatively called Newco, whereby Newco will be admitted to Bursa in place of Press Metal.

The Newco will be incorporated on the basis of one Newco share for every one subdivided share held. Press Metal also proposed a warrants exchange of all the outstanding 2011/2019 Warrants C Press Metal with new warrants in the Newco on the basis of one new Newco warrant-for-every one existing Press Metal warrant held. (The Edge Daily)

Southern Steel Bhd has terminated the services of Italian plantmaker Danieli & C. Officine Meccaniche S.p.A on 7th July 2016 for the design, manufacture and supply of a thin slab casting unit for the production of hot rolled coils (HRCs), claiming the latter has failed to fulfill its contractual obligations. The original agreement, amounting to RM427.0 mln, was inked on 16th June 2011. (The Edge Daily)

Payment service provider, GHL Systems Bhd has teamed up with the Philippines’ Rizal Commercial Banking Corp (RCBC) to provide e-payment services to merchants in the Philippines for credit card transactions.

This new service will enable GHL Philippines to directly contract with merchants to provide credit card payment services with RCBC acting as the underlying bank that will obtain authorisation for the credit card transactions. (The Edge Daily)

Genting Hong Kong Ltd, 17.8%-owned by Genting Bhd, will spend €100.0 mln (RM439.8 mln) to turn MV Werften, the three shipyards it acquired in April 2016, into one of the most efficient and innovative cruise shipbuilders in Europe.

This follows the completion of the acquisition of the three shipyards in Wismar, Warnemunde and Stralsund. Lloyd Werft, another shipyard located in Bremerhaven, Germany, that Genting HK bought last September, will focus on its prior business of repairs, conversion and building of megayachts. (The Edge Daily)

Source: M+ Online Research - 12 Jul 2016