The FBM KLCI contracted 0.3%, dragged down by losses in selected banking and plantation heavyweights after the crude palm oil prices fell to RM2,220 per tonne yesterday. The lower liners, however, finished on a positive note amid a mostly negative broader market. The Finance (- 0.6%) sector continued to tank as investors foresee the OPR cut to weigh on banks’ profits.

Market breadth was relatively even as decliners marginally outweigh advancers on a ratio of 383-to-381 stocks. Traded volumes fell by 7.5% to 1.58 bln shares as investors remained on the sidelines in the absence of fresh direction from institutional players.

Significant key index losers include PPB Group (-18.0 sen), AmBank (-11.0 sen), CIMB Bank (-11.0 sen) and KLCC (-10.0 sen). Maybank (-10.0 sen) revised its base rate (BR) to 3.0% from 3.2% previously, while,its base lending rate was also reduced to 6.65% from 6.85%. Other notable decliners were United Plantations (-26.0 sen), Apex Healthcare (-22.0 sen), Sarawak Oil Palms (-17.0 sen) and Panasonic Manufacturing (-14.0 sen). Meanwhile, UOA Development erased most of its previous day’s gains to close 16.0 sen lower.

Frontrunners on the broader market include consumer-related stocks like Dutch Lady (+80.0 sen) Ajinomoto (+36.0 sen), Nestle (+24.0 sen) and Heineken Malaysia (+22.0 sen), followed DKSH (+30.0 sen). Meanwhile, BAT (+20.0 sen), Genting (+14.0 sen), Hong Leong Financial Group (+10.0 sen), Genting Malaysia (+6.0 sen) and Kuala Lumpur Kepong (+4.0 sen) lead the key index higher.

Japanese equities climbed higher as investors look forward to further stimulus measures to boost the deflating Japanese economy after Shinzo Abe’s landslide election win recently. The Nikkei rose 1.0% after trading mostly in the positive zone, while the Hang Seng Index rose 1.1%. The Shanghai Composite (-0.2%), however, staged a mild retracement after hitting a three-month high, on the back of a slowdown in consumer demand in China. ASEAN stockmarkets, meanwhile, finished mostly higher.

U.S. stockmarkets closed at another new high overnight amid positive earnings from big banks, rising crude oil prices and optimism of more stimulus from global central banks to support the economy. The Dow rose by 0.7%, buoyed by banking-heavyweights such as JP Morgan, which was higher by 1.5% after reporting stronger-than-expected quarterly revenue. On the broader market, the S&P and the NASDAQ advanced 0.5% and 0.6% respectively as the Dollar rallied to nearly a three-week high against the Japanese Yen.

Key European benchmark indices closed mostly up after clawing back some of its losses following the Bank of England (BoE) unexpected decision to leave interest rates unchanged. The FTSE ended down by 0.2%, pulled down by retailers such as Marks & Spencer Group (-7.8%) and Burberry Group (-2.3%). Anglo American rose 3.8% after a JP Morgan Chase raised its target price for the group. On the other hand, the DAX and the CAC was higher by 1.4% and 1.2% respectively, as investors look forward to future easing measures by the BoE by August.

THE DAY AHEAD

After the mild consolidation yesterday, stocks on Bursa Malaysia may stage some near term upside in tandem with the positive overseas market performance on many key global indices overnight, including another record high on U.S equities.

However, we continue to think that the near term upsides could once again be limited to the 1,660 level amid the continuing weak following on Malaysian stocks and the corresponding lack of domestic catalysts.

Therefore, we think the upside will only be on mild bargain hunting activities on selective index heavyweights, while the broader market and lower liner stocks will continue to see a mixed following with quick profit taking activities still prevalent as retail investors are likely to take profit on their short-term winning positions.

COMPANY BRIEF

Amcorp Properties Bhd (AmProp) plans to invest in a portfolio of real estate development and value-added projects in Madrid and other cities in Spain. Amcorp Horizon Sdn Bhd has signed an agreement with Grosvenor Europe Investments Ltd (GEIL) and its manager, Grosvenor Fund Management Spain, SLU, to set up a joint venture (JV) company known as Urban Value Add I (Spain), S.L.

The capital commitment of €35.0 mln (RM153.1 mln) to be fork out by Amcorp Horizon for the JV company will be funded by advances from AmProp by way of the internally generated funds of AmProp group and bank borrowings, the breakdown of which would be ascertained at a later date. (The Edge Daily)

Axiata Group Bhd has announced that Datuk Seri Shazalli Ramly, the Chief Executive Officer (CEO) of its wholly-owned unit, Celcom Axiata Bhd has been appointed as the group's regional CEO for Southeast Asia beginning 1st September 2016. Shazalli, who has been with Celcom for 11 years and will have his tenure extended for another three years, will also hold the posts of Corporate Executive Vice President. (The Edge Daily)

Yen Global Bhd saw 28.3 mln shares, representing a 20.7% stake in the company, traded off market on 14th July 2016 for RM14.2 mln. Yen Global's shares were moved in eight direct business transaction blocks at 50 sen per share, which is 15 sen, or 23.0% lower than the 65 sen closing price of its shares.

In Yen Global's latest annual report, its Executive Chairman Goh Kok Beng and former Managing Director Goh Kok Heng are the largest shareholders, have a deemed interest of 24.0% in the company via their shareholdings in Extreme Lifestyle (M) Sdn Bhd. (The Edge Daily)

Rubber compound and related products manufacturer, Goodway Integrated Industries Bhd was slapped with an Unusual Market Activity query after a 15.6% jump in its share price on 14th July 2016. The stock has been on the uptrend since 27th June 2016, climbing as much as 102.3% to a one-year high of 44.5 sen. (The Edge Daily)

Atlan Holdings Bhd's 1QFY17 net profit rose 21.4% Y.o.Y to RM15.7 mln. Revenue for the quarter added 24.3% Y.o.Y to RM231.8 mln, mainly due to increase in duty free revenue, coupled with higher net foreign exchange gain of RM1.3 mln.

A first interim single tier ordinary dividend of 12.5 sen per share, payable on 19th August 2016, was declared. (The Edge Daily)

Bintai Kinden Corporation Bhd has clinched a RM18.0 mln contract from Kajima (Malaysia) Sdn Bhd to provide electrical and extra-low voltage services to the construction of a logistic centre in Shah Alam. The project is expected to be completed by March 2018. (The Edge Daily)

Full-services engineering solutions provider, Spring Gallery Bhd is planning to halve the par value of its existing ordinary shares of 50 sen each to reduce its accumulated losses. The company also plans to do the same for the par value of its existing Irredeemable Convertible Preference Shares of 5.0 sen each.

The corporate exercises should give rise to as much as RM44.4 mln in credit, which it intends to use to offset its accumulated losses of RM30.1 mln at the company level and RM29.1 mln at the group level as at financial year ended 30 June 2015. (The Edge Daily)

Source: M+ Online Research - 15 Jul 2016