Despite opening lower at the start of the trading bell, the FBM KLCI staged a rapid intraday recovery into the positive territory before closing 0.4% higher to register its fourth straight winning day. Gains were underpinned by buying interest in selective oil & gas and banking heavyweights. The lower liners also ended positive – the FBM Small Cap (+0.6%), FBM Fledgling (+0.2%) and FBM Ace (+0.01%) all rose, while the broader market ended higher.

Market breadth remained positive as gainers pipped losers on a ratio of 449- to-412 stocks. Traded volumes climbed 14.4% to 2.31 bln shares.

Topping the key index winners’ list were Tenaga (+24.0 sen), followed by Sime Darby (+10.0 sen), KLCC (+9.0 sen), SapuraKencana Petroleum (+7.0 sen) and Hong Leong Bank (+6.0 sen) sen). Other significant gainers of the day were KESM Industries (+73.0 sen), Oriental Holdings (+50.0 sen), Dutch Lady (+24.0 sen) and Lii Hen (+22.0 sen). Tek Seng jumped 4.0 sen after reporting a surge in its quarterly results.

Panasonic Malaysia (-22.0 sen), P.I.E Industrial (-19.0 sen), Syarikat Takaful (- 16.0 sen), UMW (-15.0 sen), Pestech (- 13.0 sen) and Ajinomoto (-14.0 sen) were amongst the biggest decliners in the broader market. On the FBM KLCI, BAT (- 24.0 sen), Hap Seng (10.0 sen), MISC (- 7.0 sen), Westports (-6.0 sen) and Maxis (-4.0 sen) were amongst the biggest decliners.

Japanese stockmarkets retreated as the Nikkei fell 0.3% after enduring a choppy trading session. The Shanghai Composite jumped 2.4%, lifted by renewed speculation on the launch of Shenzhen- Hong Kong Stock Connect, while the Hang Seng Index (+0.7%) rose for the fourth straight session after insurance shares rallied. ASEAN indices, meanwhile, ended mostly positive.

US stockmarkets advanced to record highs overnight as the Dow added 0.3% with the CBOE Volatility Index traded near multi-year lows at 11.81. On the broader market, the S&P 500 gained 0.3% with 29 of the key components hits 52-weeks high, while the Nasdaq closed 0.6% higher.

Earlier, European key indices closed mostly higher as the FTSE (+0.4%) rose after the British Pound continued to weaken in the wake of new monetary policy easing by the Bank of England, while the DAX gained 0.2% . The CAC, however, erased all its intraday losses to close 0.1% lower.

THE DAY AHEAD

As Wall Street soared to another all-time-high position, the FBM KLCI may extend its short term gains above the 1,680 level as further inflows of foreign funds into the local stockmarket.

Also, with the improved crude oil and crude palm oil prices, we could expect further attention to be drawn into oil & gas and plantations heavyweights, such as Sapura Kencana and IOI Corp over the near term. Retail market participation may spillover towards government-linked companies.

Besides that, the broader market and small cap stocks should be trending positively in line with the recent gains in index heavyweights.

COMPANY BRIEFS

Zecon Bhd has entered into a Heads of Agreement (HoA) with PR1MA Corp Malaysia for a proposed residential property development within an estimated 22 ha. (54.8 ac.) tract at Sarawak's Salak Land district in Kuching. The agreement is subject to the fulfilment of the conditions set out in the HoA by Zecon within three months from the date of the HoA. (The Edge Daily)

IGB Corporation Bhd has announced the disposal of Renaissance Kuala Lumpur Hotel (Renaissance KL) to Ventura International Sdn Bhd for RM765 .0 mln. IGB plans to use the sale proceeds for working capital and to fund higher-yield investment opportunities in the future.

IGB noted that Renaissance KL contributed about 8.0% to the group's revenue 2015. The group foresees a net profit of RM85.0 mln from the disposal in 2017, which will increase the net assets per share and earnings per share by 6.0 sen apiece. The sale is expected to be completed within four months from the date of fulfilment of the conditions precedent as specified in the Sale and Purchase Agreement. (The Edge Daily)

Ann Joo Resources Bhd returned to the black with a 2Q2016 net profit of RM92.4 mln, from a net loss of RM10.9 mln in 2Q2015 - mainly due to improved cost structure amid the recovery in steel prices. Meanwhile, revenue rose 17.0% Y.o.Y to RM584.7 mln, from RM501.3 mln last year.

Its cumulative 1H2016 net profit stood at RM97.9 mln vs. a net loss of RM5.5 mln in the preceding year, while revenue expanded 5.0% Y.o.Y to RM1.07 bln from RM1.02 bln. Ann Joo also proposed a special dividend of 6.0 sen per share, payable on 28th October 2016, in conjunction with the group's 70th anniversary.

Petronas Dagangan Bhd (PetDag) reported a 21.3% Y.o.Y drop in its 2Q2016 net profit to RM215.0 mln, dragged by lower contribution from its retail segment. Quarterly revenue plunged 17.5% Y.o.Y to RM5.33 bln. Despite the weaker earnings, PetDag has declared an interim dividend of 14.0 sen per share, payable on 9th September 2016.

The group's cumulative 1H2016 net profit fell 9.3% Y.o.Y to RM434.4 mln, from RM479.0 mln in the same period last year, while revenue lost 18.3% Y.o.Y to RM10.24 bln from RM12.54 bln. (The Edge Daily)

Daya Materials Bhd has secured a three-year contract from Schlumberger Ltd to provide specialised well services in Saudi Arabia, starting from 3Q2016. The value of the project was undisclosed. (The Edge Daily)

Supermax Corporation Bhd has clarified that a previous court case involving its 98.0%-owned subsidiary, SuperVision Optimax Sdn Bhd (SVO) will not have a substantial impact to the group.

The five-year injunction order to restrain SVO and its employee, Ting Chong Chai from using spincasting technology will expire in October 2016. (The Edge Daily)

HSS Engineers Bhd‘s associate, HSS Integrated Sdn Bhd (HSSI) was awarded a RM41.3 mln contract to provide construction supervision services for the Selangor Alignment of the West Coast Expressway from the IJM Construction Sdn Bhd and Kumpulan Europlus Bhd joint venture (JV).

Project works include construction supervision for the expressway's Section 1 (Banting Interchange-SKVE Interchange), Section 2 (SKVE Interchange-SAE Interchange), Section 6 (Kapar Interchange-Assam Jawa Interchange) and Section 7 (Assam Jawa Interchange-Tg Karang Interchange). The contract is expected to be completed within 39 months to 41 months. (The Edge Daily)

ConnectCounty Holdings Bhd has aborted its plans to acquire a 51.0% equity stake in Kejuruteraan Asastera Sdn Bhd (KASB), following the expiry of the Heads of Agreement (HoA) exclusivity period on 14th August 2016. (The Edge Daily)

Tomei Consolidated Bhd edged into the black with a 2Q2016 net profit of RM485,000, from a net loss of RM5.3 mln a year earlier, on the back of stronger revenue contribution, which was 17.0% Y.o.Y higher at RM107.1 mln vs RM91.8 mln in 2Q2015.

For 1H2016, cumulative net profit jumped to RM3.9 mln, from RM126,000 in the previous corresponding year. Revenue for the period slipped 12.0% Y.o.Y to RM230.4 mln, from RM261.4 mln in 1H2015. (The Edge Daily)

YSP Southeast Asia Holdings Bhd’s (YSPSAH) 2Q2016 net profit spiked 99.2% Y.o.Y to RM6.8 mln, from RM3.4 mln, helped by lower cost margin in the product mix and unrealised forex gains. Revenue for the quarter, however only expanded 2.4% Y.o.Y to RM51.8 mln, from RM50.6 mln.

Its cumulative 1H2016 net profit shed 8.3% Y.o.Y to RM11.7 mln, compared to RM12.8 mln – mainly due to higher cost of goods sold, despite stronger revenue contribution at RM118.1 mln, from RM110.0 mln a year ago. (The Edge Daily)

Salutica Bhd reported a 51.7% Y.o.Y drop in its 4QFY16 net profit to RM7.5 mln, from RM15.6 mln a year earlier, on higher income tax due, although revenue expanded 57.6% Y.o.Y to RM73.0 mln, from RM45.7 mln in 4QFY15.

FY16 net profit also shed 11.2% Y.oY to RM24.3 mln, from RM27.4 mln. Meanwhile, revenue for the year rose 25.1% Y.o.Y to RM241.8 mln vs RM192.5 mln. A first interim dividend of 0.6 sen per share was proposed. (The Edge Daily)

SCH Group Bhd is planning to raise RM20.6 mln via a bonus issue of 206.1 mln warrants, on the basis of one warrant-for-every two SCH shares. The entitlement date and exercise price was undisclosed.

The group has also proposed to increase its authorised share capital to RM100.0 mln, comprising of 1.0 bln SCH shares. (The Edge Daily)

Source: M+ Online Research - 16 Aug 2016