The FBM KLCI ended marginally higher by less than 0.1%, on the back of buying support on selected heavyweights despite the weaker crude oil prices. The lower liners were positive as the FBM Small Cap (+0.5%), FBM Fledging (+0.1%) and FBM ACE (+0.1%) advanced, while the majority of broader market stocks finished on a positive note.

Market breath was positive as gainers outnumbered losers on a ratio of 436-to- 358 stocks. Traded volume also regained some 13.0% to 2.37 bln shares as buying interest is noted amongst the lower liners.

Driving the FBM KLCI higher were banking heavyweights like Hong Leong Financial Group (+48.0 sen), Public Bank (+20.0 sen) and Hong Leong Bank (+18.0 sen), while plantation heavyweights like Sime Darby (+11.0 sen) extended its gains. BAT rose RM1.14 to close at its intra-day high of RM51.4. Leading the gainers on the broader market include Panasonic (+86.0 sen), Scientex (+23.0 sen) and UMW Holdings (+21.0 sen), while F&B giants – Nestle and Fraser & Neave gained 36.0 sen and 32.0 sen respectively. HSS Engineers rose 7.0 sen after its debut on the Ace Market of Bursa Malaysia today.

On the other side of the trade, significant decliners on the broader market were Apex Healthcare (-17.0 sen), Pintaras Jaya (-13.0 sen), Warisan (-12.0 sen), MSM Malaysia Holdings (-10.0 sen) and Aeon Credit Service (-8.0 sen). Meanwhile, PPB Group (-12.0 sen), KLCC Property & REITs (-10.0 sen), Tenaga Nasional (-10.0 sen), Maybank (-5.0 sen) and RHB Bank (-5.0 sen) dominated the losers on the key index.

Most Asian stockmarkets closed lower amid the renewed weakness in crude oil prices as higher-than-expected U.S. crude oil inventory and increasing crude oil supply from Saudi Arabia fuelled worries of a supply glut. The Nikkei reversed its gains from the morning session to trade down 0.2% as trading volumes thinned ahead of the national holiday. The Shanghai Composite Index (-0.2%) closed in the red after a choppy trading session, while the Hang Seng (+0.1%) clawed back some of its losses to close marginally higher. ASEAN indices, meanwhile finished mixed.

U.S. equities traded lower as global stockmarkets declined due to the oil-price volatility. The Dow (-0.2%) erased Tuesday’s gains as weakness in energy sector offset gains by blue chip counters such as Walt Disney, which rose 1.2% after reporting better-than-expected earnings result. Meanwhile, the S&P 500 and the Nasdaq fell 0.3% and 0.4% respectively.

Most of the key benchmark European indices retreated alongside crude oil prices on the back of ballooning supply and increasing production. The FTSE inched higher by 0.2%, underpinned by gains in the materials and financial-related stocks. The CAC, however lost 0.4% after its factory output fell 0.8%, as opposed to the 0.1% increase expected by the analysts. The DAX lost 0.4%, closing slightly above the 10,650 points, after trading in the negative zone for the entire session.

THE DAY AHEAD

The FBM KLCI is starting to look toppish as it is finding it difficult to convincingly clear the 1,670 level over the past two sessions amid the bouts of mild profit taking activities. This is again leaving the key index at the crossroads and further near term gains appears difficult to come by over amid a slightly more cautious market environment as foreign markets are also showing tentative signs.

Therefore, we also expect the Malaysia stockmarket to also consolidate anad could linger within the 1,670 level over the near term with the 1,680 level remaining the key resistance, while the 1,650 level is the main near term support.

While interest on the heavyweights pauses, we expect interest on the lower liners and broader market shares to remain active amid the continuing trading activities from retail players. Once again, this helps to keep market breadth above its three-month average.

COMPANY BRIEFS

Malayan Banking Bhd's (Maybank) subsidiary, Maybank Asset Management Group Bhd has sold a 99.99% stake, comprising of 27.0 mln shares in Maybank Asset Management Thailand Co. Ltd (MAMT) to Capital Link Holding Ltd of Thailand. The sale was completed as part of the group's effort and strategy to improve its regional business operations and optimise the company’s current resources in the most efficient manner. (The Star Online)

Tenaga Nasional Bhd (TNB) has received a letter from the Energy Commission (EC) relating to the Commission's conditional award to Tadmax Resources Bhd, to develop a 1,000MW combined-cycle gas-fired power plant in Pulau Indah, Selangor. TNB said that it will be evaluating the offer and its role in the project.

To recap, Tadmax had announced on 3rd August 2016 the award by the EC for the new power plant, with TNB to be invited to participate in the project. However, the following day (4th August 2016), TNB said it had not been notified of the EC's decision to invite the group to participate in the project. (The Edge Daily)

The number of passengers passing through the 39 airports in the country that Malaysia Airports Holdings Bhd (MAHB) manages, rose 8.5% Y.o.Y to 7.8 mln in July 2016 and it indicates existence of latent demand for air travel. This is the highest passenger volume handled by the system of airports for a month to-date. (The Edge Daily)

Ho Wah Genting Bhd and Korea-based SM Dutyfree Co Ltd have signed a Memorandum of Understanding (MoU) to collaborate and evaluate the feasibility of opening duty free outlets in Malaysia. Ho Wah’s subsidiary, HWG Duty Free Sdn Bhd plans to establish duty free outlets in Malaysia, while SM Dutyfree is in the business of operating duty free outlets in South Korea. (The Edge Daily)

Daibochi Plastic and Packaging Industry Bhd's 2Q2016 net profit fell 15.5% Y.o.Y to RM6.1 mln, impacted by higher operating costs from the group's revised wage policy in January 2016, less favourable product mix and higher production wastage. Revenue for the quarter, however, rose 8.2% Y.o.Y to RM97.0 mln.

For 1H2016, cumulative net profit declined 5.9% Y.o.Y to RM12.6 mln. Revenue for the period, however, gained 6.2% Y.o.Y to RM186.7 mln. A second interim dividend of 1.33 sen per share, payable on 22nd September 2016 was declared. (The Edge Daily)

Malaysia Smelting Corp Bhd’s (MSC) 2Q2016 net loss narrowed to RM10.3 mln from RM14.9 mln in the previous corresponding quarter, on higher revenue, favourable valuation adjustment on tin inventory arising from a higher quarterly closing tin price and a positive impact from foreign currency translations. Revenue for the quarter grew 15.0% Y.o.Y to RM396.3 mln.

For 1H2016, cumulative net profit stood at RM14.7 mln vs. a net loss of RM17.8 mln in the previous corresponding period. Revenue for the period climbed 10.8% Y.o.Y to RM804.7 mln. (The Edge Daily)

Source: M+ Online Research - 11 Aug 2016