Despite trading mostly in the negative territory, last minute buying support among selective telco heavyweights sent the FBM KLCI to close 0.2% higher yesterday. The lower liners, however, ended mostly higher as the FBM Small Cap and FBM Fledgling added 0.6% and 0.4% respectively, while the Industrial Products (-0.7%) and Construction (-0.6%) sectors underperformed the positive broader market.

Market breadth stayed positive as gainers outpaced losers on a ratio of 401-to-392 stocks. Traded volumes, however, fell by 10.1% to 1.70 bln shares on quick profit taking on recent gains.

On the key index, Maxis (+15.0 sen), BAT (+14.0 sen), Axiata (+10.0 sen), Genting (+10.0 sen) and Petronas Gas (+10.0 sen) were amongst the biggest winners. Meanwhile, United Plantations (+54.0 sen), KESM Industries (+36.0 sen), Ajinomoto (+20.0 sen) and Dutch Lady (+20.0 sen) topped the broader market advancers list. MBM Resources jumped 24.0 sen after its first fuel efficient sedan – Perodua Bezza was opened for booking over the weekend.

In contrast, Malaysia Airport Holdings (- 33.0 sen) topped the losers lists after the failed Turkish coup dampened global airtravel stocks, while other notable decliners include Far East Holdings (-28.0 sen), BLD Plantations (-18.0 sen), LPI Capital (-16.0 sen) and Heineken (-14.0 sen). Notable losers on the FBM KLCI were Petronas Chemicals (-17.0 sen), Hong Leong Financial Group (-8.0 sen), Westports (-4.0 sen), Telekom (-3.0 sen) and SapuraKencana Petroleum (-2.0 sen)

Chinese equities extended their losses for the third straight session as the Shanghai Composite fell 0.4% on weakness in property and financial stocks. The Hang Seng Index, however, added 0.7%, extending its sixth consecutive winning day, while Japanese stockmarkets were closed for the Marine Day public holiday. ASEAN stockmarkets, meanwhile, finished mostly higher.

U.S. stockmarkets advanced overnight as the Dow (+0.1%) closed at another record high after extending its gains for the seventh straight day – the longest winning streak in four months. On the broader market, the S&P (+0.3%) also closed at a record high, boosted by stronger-than-expected earnings from Bank of America (+3.3%).

The unrest in Turkey sent financial and travel-related stocks lower as the CAC reversed all its intraday gains before falling 0.3%, while the DAX closed 0.04% lower after enduring a choppy trading session. The FTSE (+0.4%) however, outperformed, anchored by gains from technology stocks like ARM Holdings Plc (+40.9%) after Japan’s Softbank agreed to purchase the company for US$32.2 bln.

THE DAY AHEAD

Although the FBM KLCI rose yesterday, the market’s pace was still uneven as many investors opted to lock-in profit instead, placing a dampener on its upside prospects. The mixed trend appears likely to continue over the near term as market players, particularly retail participants, will likely maintain their hit and run tactics over the near term amid the still uncertain market conditions.

Therefore, the ongoing market upsides, which is brought about by the more positive overseas stockmarket environment, is likely to continue at a slow pace, punctuated by the bouts of profit taking. On the upside, the 1,680 remains the immediate target, while the 1,660 level is still the near term support.

COMPANY BRIEF

Ekovest Bhd has secured several significant tenants such as GSC, Village Grocer, Borders Books, Starbucks and Coffee Bean for its EkoCheras Mall, which is scheduled for completion by the first quarter of 2018.

Separately, the group has also announced its plans to issue a 23-year RM3.64 bln Sukuk to partly finance the acquisition of Setiawangsa-Pantai Expressway (formerly known as the Duke Phase-3 Expressway). (The Star Online)

Heineken Malaysia Bhd (formerly Guinness Anchor Bhd) reported a 38.3% Y.o.Y growth in its 2Q2016 net profit to RM60.9 mln from RM44.0 mln in the previous corresponding year, mainly due to higher sales revenue which was 15.6% Y.o.Y higher from RM397.6 mln in 2Q2015 to RM459.6 mln. The group has also declared a second interim dividend of 35.0 sen per share, payable on 7th October, 2016.

The group had previously changed its financial year-end from June 2016 to December 2016. (The Edge Daily)

Vivocom Intl Holdings Bhd has repudiated rumours that its Chief Executive Officer (CEO), Datuk Seri Dr Yeoh Seong Mok intends to leave the company.

The group further clarified and confirmed that its CEO will be remaining with the company and that he has no intention of leaving the company as reported in the press. (The Star Online)

Following a Letter of Intent (LoI) from Bank Kerjasama Rakyat Malaysia Bhd (Bank Rakyat), Microlink Solutions Bhd will be cooperating with the former to enhance Bank Rakyat’s existing core banking system created by Microlink.

Both parties are currently engaged in detailing the enhancements to the platform, which is designed to provide Bank Rakyat and its customers with the tools required for future banking operations. (The Edge Daily)

Affin Holdings Bhd’s conventional banking arm, Affin Bank Bhd is lowering its base rate (BR) by 19.0 basis points to 3.8% per year, from 3.99%, effective from 19th July, 2016. Its base lending rate (BLR) and Affin Islamic Bank Bhd's base financing rate will also be reduced to 6.66% and 6.85% respectively.

The group expects the interest rates reduction to result in cost savings for its customers in the long run and assist in expanding their businesses further in this challenging environment. (The Star Online)

Goodway Integrated Industries Bhd is buying security solutions provider, S5 Systems Sdn Bhd from NSA Technology Sdn Bhd for RM900.0 mln. The former has entered into a share sale agreement with NSA for the injection of the entire equity interest of S5 Systems into Goodway for 1.8 bln new Goodway shares at an issue price of 50.0 sen each share.

Further, there will be an offer-for -sale by NSA of up to 165.8 mln Goodway shares to existing Goodway shareholders at 50.0 sen per share, on the basis of three shares-for-every two shares held. NSA is also planning to place up to 440.0 mln Goodway shares to investors, which are not yet disclosed at a price to be determined via book building. (The Star Online)

Sunway Bhd’s wholly-owned subsidiary Sunway Holdings Sdn Bhd and 70.0%- owned subsidiary, Sunway IBS Sdn Bhd has inked a joint-venture (JV) agreement with Singapore-based company, PopBox Asia Pte Ltd to invest in the logistics business.

The JV entity, which targets the growing demand for convenient parcel collection and returns, will be used to operate automated parcel lockers and to set up parcel collection and return points at convenient locations nationwide, thus facilitating automated parcel collection and returns between consumers and merchants as the e-commerce industry expands. (The Edge Daily)

Source: M+ Online Research - 19 Jul 2016