Despite trading mostly in the negative zone, the FBM KLCI eked out a gain of 0.01%, mainly on an end-of-day buying support on selected heavyweights. The majority of the lower liners, however, were higher, with the exception of FBM Fledgling, which fell by 0.2%. The broader market, meanwhile, closed mixed.

Market breadth was positive as advancers marginally outrun losers on a ratio of 374- to-369 stocks. Traded volumes, however, lost 13.3% to 1.40 bln shares as investors stayed on the sidelines, waiting for fresh catalysts.

Topping the heavyweights gainers was Sime Darby (+12.0 sen), Tenaga Nasional (+6.0 sen), Hong Leong Financial Group (+4.0 sen), RHB Bank (+3.0 sen) and SapuraKencana Petroleum (+3.0 sen). Notable broader market leaders were Panasonic Manufacturing (RM1.80), Dutch Lady Milk Industries (+40.0 sen), Oriental Interest Bhd (+21.0 sen), Ajinomoto (+20.0 sen) and Malaysia Holdings (+19.0 sen).

On the other side of the trade, among the key decliners of the day include Fraser & Neave Holdings (-32.0 sen) and Boustead (-21.0 sen), followed by United Plantations (-20.0 sen), Heineken Malaysia (-18.0 sen) and Nestle (-16.0 sen). Blue-chip decliners include Petronas-related counters such as Petronas Chemicals Group (-11.0 sen), Petronas Dagangan (-4.0 sen) and Petronas Gas (-4.0 sen) fell after Petronas dropped the July crude price factor to US$2.95 per barrel, from US$3.30 per barrel. Other key index losers include BAT (-28.0 sen), Kuala Lumpur Kepong (-12.0 sen), Maxis (-9.0 sen) and KLCC (-6.0 sen).

Major Asian benchmark indices finished on a positive note as the Nikkei extended its two day rally to close 2.5% higher, backed by financials-related counters amid a retracement in the Yen.

Meanwhile, China stocks registered solid gains as the Shanghai Composite Index rose 1.8% ahead of China’s Quarterly GDP data due on Friday and the Hang Seng (+1.7%) climbed higher. ASEAN stockmarkets, meanwhile, closed mostly in the green.

U.S. equities rallied on Tuesday, mainly due to a rebound in the crude oil prices which fueled gains in energy shares. The Dow rose 0.7%, boosted by financials and energy companies. Meanwhile, on the broader market, the S&P (+0.7%) advanced as technology, materials and energy stocks lead the index higher. The NASDAQ also increased by 0.7% to close at 5,022.8 points.

European benchmark indices were mostly higher, as political uncertainties in the U.K. subsided following Theresa May’s replacement as the Prime Minister. After a choppy trading session, the FTSE (-0.03%) declined marginally, on the back of profit-taking activities in blue chips such as Mediclinic International (-5.0%) and Randgold Resources (-4.3%). The DAX and CAC, however, rose 1.3% and 1.6% respectively.

THE DAY AHEAD

As it is, quick profit taking activities have hampered the FBM KLCI’s ascend yesterday and resulted in Bursa Malaysia stocks mostly decoupling from the more positive regional performance. The generally mixed performance is also a sign that the hit and run tactics are prevalent and has kept a lid on the local stockmarket’s upsides.

However, after yesterday’s bout of profit taking, we think stocks on Bursa Malaysia could stage another upturn as more bargain hunting returns with global market sentiments remain positive.

Therefore, we expect the FBM KLCI to maintain its modest uptrend over the near term to re-challenge the 1,660 level with the 1,650 level continuing to serve as the main near term support level.

COMPANY BRIEFS

Vivocom International Holdings Bhd has proposed a one-for-four bonus issue which would involve the issuance of up to 870.3 mln new shares. The bonus issue is intended to reward its shareholders, many of whom had been with the company when it previously known as Instacom.

The bonus issue is also aimed at increasing its issued and paid-up share capital to a level which would be more reflective of its current scale of operations and assets employed. Its orderbook is more than RM1.40 bln with its subsidiaries involved in construction, manufacturing and telecommunications segments. (The Star Online)

AirAsia Bhd has clarified that a dual listing is not an option the budget airline is formally considering at the moment and also highlighted that the company is not pursuing any new joint venture in China. It was reported earlier that the low-cost carrier is eyeing a Hong Kong listing as it expands into North Asia.

Instead, the company continues to focus on launching AirAsia Japan as well as strengthening their existing joint venture airline operations within ASEAN and India. (The Edge Daily)

Berjaya Assets Bhd (BAssets) will acquire the remaining 50.0% in Megaquest Sdn Bhd for RM108.0 mln to fully control the company involved in lottery games in Sarawak. Bassets’ subsidiary, Tropicfair Sdn Bhd has entered into a share sale agreement for the proposed acquisition comprising 3.5 mln ordinary shares in Megaquest from Violet Circle Sdn Bhd at RM30.80 per share.

Megaquest is the number forecast lotteries operator in Sarawak under the licence of Sarawak Turf Club via Natural Avenue Sdn Bhd. The cash consideration for the proposed acquisition will be funded from borrowings of BAssets.

Separately, BAssets has appointed an exclusive marketing agent for the sale of a piece of freehold land in Imbi for some RM130.0 mln. Measuring 41,990 sq.ft., the land, located next to the integrated Berjaya Times Square commercial development, was acquired 22 years ago. (The Edge Daily)

Harn Len Corp Bhd is buying three adjacent plots of freehold land located in Taman Perindustrian Cemerlang, Johor from Jotech Metal Fabrication Industries Sdn Bhd, for investment purposes. The plots have factory buildings erected on them.

The properties are located in the vicinity of factories occupied by reputable firms such as Meiban, Toyoplus and London Biscuits. Hence, an appreciation in value is foreseen. The properties purchased will be rented back to the vendor for five years with a rental yield of 8.0%. (The Edge Daily)

Ireka Corporation Bhd has aborted the acquisition of a freehold land measuring 21.5 ac. (8.7-ha.) in Senawang, Negeri Sembilan, citing non-fulfillment of the conditions precedent under the agreement which it had inked with the Aeon Co (M) Bhd.

The construction outfit first announced the land acquisition deal worth RM21.8 mln in December 2014. (The Edge Daily)

Malaysia Airports Holdings Bhd (MAHB) has reported that passenger movements at its airports, including Istanbul's Sabiha Gocken International Airport (SGIA), fell 4.2% Y.o.Y to 9.1 mln in June 2016. The slowdown was mainly due to the seasonally-lesser travelling during the Ramadhan period, which affected both its Malaysian and Turkey operations.

However, the group still registered a 4.2% Y.o.Y growth in 1H2016 as both local and foreign carriers filled the void left by a restructured Malaysia Airlines Bhd. Overall aircraft movements in June decreased 6.7% Y.o.Y with a reduction in international and domestic movements by 1.7% Y.o.Y and 9.6% Y.o.Y respectively. (The Edge Daily)

Source: M+ Online Research - 13 Jul 2016