The FBM KLCI (-0.3%) erased all its previous session’s gains as the key index traded in the negative territory for the entire trading session. The lower liners also ended mostly lower as the FBM Small Cap and FBM Ace fell 0.6% and 0.2% respectively, while the Technology (+1.1%), Properties (+0.3%) and Plantations (+0.1%) sectors outperformed the negative broader market.

Market breadth turned negative as losers outstripped gainers on a ratio of 466-to- 300 stocks. Traded volumes, however, added 26.7% to 2.22 bln shares as profit taking activities escalated.

Half of the key index constituents traded lower, dragged down by BAT (-RM1.60), followed by Genting (-39.0 sen), Petronas Dagangan (-6.0 sen), AmBank (-5.0 sen) and Sime Darby (-5.0 sen). Significant losers on the broader market were Chin Teck Plantations (-39.0 sen), Lafarge (- 23.0 sen), Amway (-20.0 sen) and Bintulu Port (-17.0 sen). Nestle fell 10.0 sen to close lower for the third straight session.

Consumer products stocks like Panasonic (+RM1.38), Dutch Lady (+50.0 sen), Ajinomoto (+48.0 sen) and Apollo (+14.0 sen) dominated the gainers list on the broader market, while Perak Corporation added 22.0 sen. Among the biggest gainers on the big board include Westports (+5.0 sen), Hong Leong Financial Group (+4.0 sen), Axiata (+3.0 sen), Telekom (+2.0 sen) and Tenaga (+2.0 sen).

Asia benchmark indices closed mostly lower as the Nikkei fell 1.1% ahead of the two-day Bank of Japan policy meeting, whilst the Japanese Yen strengthened against the U.S. Dollar. The Hang Seng Index (-0.2%) retreated from its YTD high, but the Shanghai Composite (+0.1%) closed marginally higher after enduring a chopping trading session. ASEAN stockmarkets, meanwhile, ended mixed.

U.S. stockmarkets ended mixed after the Dow fell 0.1% to mark its fourth straight session of decline. The S&P, however, added 0.2%, boosted by stronger-than-expected corporate earnings from Facebook, (+0.2%), Harley-Davidson (+0.9%), Hershey (+2.9%) and MasterCard (+2.4%), while the Nasdaq gained 0.3%.

European benchmark indices retreated as the CAC and DAX fell 0.6% and 0.4% respectively on a slew of poor corporate earnings from Royal Dutch Shell (-3.9%), Telefonica (-5.6%) and Carrefour (-5.0%). The FTSE also ended 0.4% lower ahead of the Bank of England monetary policy meeting.

THE DAY AHEAD

Once again, the lack of significant and positive market catalysts is likely to leave the key index to drift within a narrow band. As it is, the market’s cautiousness remains in place amid the unsettled 1MDB issue and the ratings cut on Petronas by Fitch. Therefore, the weak sentiments are likely to see increased profit taking activities ahead of the weekend.

With the key index slipping below the 1,660 level, it will now serve as the immediate resistance level, while the next resistance is at 1,670. The 1,650 level, meanwhile, will continue to serve as the key near term support level.

On the broader market and among the lower liner stocks, we expect the mixed-to-lower environment to also prevail as many retail investors are expected to close out their open positions ahead of the weekend.

COMPANY BRIEF

Tenaga Nasional Bhd's (TNB) 3QFY16 net profit spiked 192.0% Y.o.Y to RM2.31 bln, from RM789.4 mln a year earlier, attributed to significant lower recognition of over recoverability of ICPT (imbalance cost pass through) and increased electricity consumption. Its revenue for the quarter was also 22.0% Y.o.Y higher at RM12.13 bln from RM9.91 bln in the previous corresponding period.

For the cumulative 9MFY16, net profit rebounded 6.0% Y.o.Y to RM5.61 bln, from RM5.29 bln in 9MFY15, contributed by stronger revenue, which stood at RM33.29 bln from RM31.54 bln in the previous corresponding period. Moving forward, TNB maintains a cautious outlook on its prospects, in view of widespread global uncertainties. (The Star Online)

Public Bank Bhd registered a 5.0% Y.oY increase in its 2Q2016 net profit to RM1.26 bln from RM1.20 bln a year ago, buoyed by higher net interest and Islamic banking income, while revenue rose to RM5.02 bln from RM4.74 bln. The group has also proposed a dividend of 26.0 sen per share. The dividend's ex and payment dates fall on 10th August 2016 and 22th August 2016 respectively.

Meanwhile, its 1H2016 net profit expanded to RM2.49 bln from RM2.37 bln a year ago, mainly due to improved net interest income and a gain in revenue, which was 7.7% higher to RM10.06 bln from RM9.34 bln in the prior corresponding year. (The Star Online)

CIMB Group Holdings Bhd and Fajr Capital are planning to work together in a bid to expand the marketing and distribution network of both firms' products and services. The partnership will facilitate deal origination, cross-distribution and collaborative marketing of the respective firms' core products and services through their network in the Asia Pacific and the Middle East respectively.

CIMB also said that the partnership is in-line with its recalibration strategies to achieve its T18 aspirations and will be focusing on Islamic treasury, capital market solutions, asset management services and strategic investments.

Accordingly, CIMB Group will close its operations in Bahrain once the necessary approvals have been obtained from the relevant regulators. (The Edge Online)

Naim Holdings Bhd‘s 70:30 joint-venture (JV) with Gamuda Bhd has secured a RM1.57 bln works package on the Pan Borneo Highway from Lebuhraya Borneo Utara Sdn Bhd.

The contract includes the development and upgrading of Phase 1 of the highway in Sarawak, covering the stretch from Pantu Junction to Batang Skrang and is to be completed within 51 months from the date of site possession. (The Star Online)

Mudajaya Corporation Bhd has also obtained a contract worth RM1.33 bln in the same highway project. The contract is for the development and upgrading of the stretch of highway from the Sungai Kua Bridge to Sungai Arip Bridge and will be undertaken together with Musyati Sdn Bhd via the JV-company which will be 70.0%-owned by Mudajaya, with the remainder to be held by Musyati. The project is expected to be completed by October 2020. (The Star Online)

Malaysia Airports Holdings Bhd (MAHB) registered a 2Q2016 net profit of RM9.4 mln compared to a net loss of RM19.9 mln in 2Q2015, mostly attributed to significant lower finance cost, while revenue rose 6.1% Y.o.Y to RM997.6 mln, from RM940.0 mln a year earlier.

Meanwhile, its 1H2016 net profit more-than-doubled to RM26.4 mln from RM12.2 mln in the previous corresponding period, in-line with the stronger revenue contribution, which was 11.1% up to RM2.02 bln from RM1.82 bln previously, as well as higher contributions from its associates and jointly-controlled entities.

The group has proposed a single-tier interim dividend of four sen a share with the ex and payment dates on 10th August and 26th August respectively. (The Edge Online)

Practice Note 17 (PN17) company, Malaysia Pacific Corp Bhd (MPCorp) has entered into a Memorandum of Understanding (MoU) with Singapore-based Terra Pontus Pte Ltd for the partial sale of Wisma MPL for RM250.0 mln.

MPCorp has sold some of the units in the 23-storey complex and kept the rest for Terra Pontus. The Sale and Purchase Agreement (SPA) is slated to be signed within two months from the date of the MoU.

Separately, the group has submitted an application for extensions of time up to 28th February 2017 to make a requisite announcement and up to 15th April 2017 to submit its regularisation plan to Bursa Malaysia. (The Edge Online)

Rental income from the recently acquired DaMen Mall and Intermark Mall pushed Pavilion Real Estate Investment Trust’s (PavREIT) 2Q2016 net property income (NPI) higher by 13.3% Y.o.Y to RM81.4 mln, from RM71.9 mln a year earlier. Quarterly revenue was also lifted by 14.7% Y.o.Y to RM118.0 mln, from RM102.9 mln in 2Q2015.

Its cumulative 1H2016 NPI grew 8.4% Y.o.Y to RM157.1 mln, from RM144.8 mln in 1H2015, while, revenue came in at RM224.7 mln, gaining 8.0% Y.o.Y compared to RM16.7 mln a year ago. .

Meanwhile, it declared a distribution per unit (DPU) of 4.16 sen, an increase of 1.8% from RM4.09 sen per unit distributed for in the previous corresponding period. The latest DPU will be payable on 6th September, 2016. (The Edge Online)

Source: M+ Online Research - 29 Jul 2016