Despite opening lower at the start of the trading bell, the FBM KLCI staged a quick recovery to hover in the positive territory before extending its gains by 0.4% at the end of the day. Gains on the big board were underpinned by buying support on selective banking and telco heavyweights. The lower liners – the FBM Small Cap (+0.4%), FBM Fledgling (+0.6%) and the FBM ACE (+0.7%) also extended their gains, while the Properties sector (-0.4%) underperformed in the mostly positive broader market.

Market breadth remained positive as gainers edged losers on a ratio of 423-to- 379 stocks. Traded volumes added 8.5% to 1.56 bln shares on bargain hunting activities after the recent selldown in the lower liners.

Leading the key index gainers list was BAT (+22.0 sen), followed by Maybank (+14.0 sen), Axiata (+13.0 sen), IOI Corporation (+8.0 sen) and Maxis (+8.0 sen). Significant gainers on the broader market include UMW (+17.0 sen), Heineken (+16.0 sen), Top Glove (+14.0 sen) and Cahya Mata Sarawak (+13.0 sen). SCGM rose 13.0 sen after reporting a strong set of quarterly earnings.

Among the biggest decliners on the broader market were Ajinomoto (-30.0 sen), Advanced Packaging (-18.0 sen), AmWay (-17.0 sen) and Time dotcom (- 12.0 sen). VS Industry fell 7.0 sen after it issued a profit warning for an impairment loss on its Hong Kong associate company. On the big board, Hong Leong Financial Group (-16.0 sen), KLK (-10.0 sen), Genting (-10.0 sen), KLCC (-8.0 sen) and Public Bank (-4.0 sen) fell.

Asia benchmark indices advanced as the Nikkei gained 0.7% on the weaker Japanese Yen against the U.S. Dollar. Admid the strong capital inflow from the mainland, the Hang Seng Index jumped 1.7% to extend its YTD record closing, while the Shanghai Composite climbed 0.2%. ASEAN stockmarkets, meanwhile, ended mostly higher.

Despite a stronger-than-expected retail sales data in the Eurozone, which rose 2.9% Y.o.Y in July vs. economists’ estimates of a 1.9% Y.o.Y increase, key European benchmark indices - the FTSE (-0.2%), CAC (-0.02%) and DAX (-0.1%, all staged a mild retreat.

Meanwhile, Germany’s Markit Composite Final PMI for August rose to 53.3, but was below economists’ estimates of 54.4. Elsewhere, U.S. stockmarkets were closed for the Labor Day public holiday.

THE DAY AHEAD

We expect stocks on Bursa Malaysia to maintain their mostly upward trend amid the calmer market conditions that would encourage further bargain hunting and trading activities.

This would also allow the key index to re-test the 1,680 resistance level and if the level is breached, the next resistance is located at the 1,690 level. In the meantime, the immediate support is located at the 1,670 level.

While we think there are still upsides, we continue to think that the prevailing cautious market environment could limit strong market gains as quick profit taking activities could curtail the upsides. Also, market breadth remains moderate, thus curtailing the potential gains.

COMPANY BRIEF

Mlabs Systems Bhd has aborted the proposed RM260.0 mln takeover of footwear manufacturer Bage (China) Co Ltd (Bage HK), which would have resulted in a significant change in its business direction. Bage Holdings Ltd had decided not to extend the exclusivity period for signing the definitive agreements.

Mlabs, had on 3rd June 2016, inked a non-binding Heads of Agreement (HOA) with Bage Holdings with the intention of signing definitive agreements within 60 days, with an option to extend for another 30 days. The proposed purchase of 100% equity in Bage HK was to be settled by issuing 4.0 bln new ordinary Mlabs shares of 5.0 sen each. (The Star Online)

OSK Holdings Bhd (OSKH) has crossed the 90.0% shareholding threshold to take PJ Development Holdings Bhd (PJD Holdings) private in its latest takeover offer. OSKH had acquired 4.3 mln PJD Holdings shares and 4.0 mln of its warrants from 1st September 2016 to 5th September 2016, raising its shareholding to 90.1% of the developer’s paid-up capital (excluding treasury shares) and 70.6% of the total outstanding warrants.

To recap, OSKH had announced it was making a cash takeover offer of RM1.50 per share for the remaining PJD Holdings shares it did not own and 50 sen per warrant on 30th August 2016. On the rationale for the latest offer, OSKH said it would have a greater autonomy to reorganise the corporate structure, to rationalise the business activities and to streamline the operations of the enlarged group of companies in order to achieve greater economies of scale and to create cost synergetic benefits for the enlarged group.

The de-listing of PJD Holdings arising from the proposed offer is also expected to eliminate the administrative efforts and costs in maintaining the listing status of PJD Holdings and re-divert resources towards its core businesses. (The Star Online)

Boustead Heavy Industries Corp Bhd’s shipbuilding unit's RM54.9 mln contract to supply three harbour tugs has been called off. BHIC Shipbuilding & Engineering Sdn Bhd's contract with KFS Support Services Sdn Bhd was terminated after KFS was unable to fulfil the conditions precedent set out in the contract. (The Edge Daily)

ECM Libra Financial Group Bhd's 2QFY17 net profit fell 58.7% Y.o.Y to RM5.8 mln on slower topline growth. Revenue for the quarter dropped 54.8% Y.o.Y to RM10.1 mln.

For 1HFY17, cumulative net profit declined 60.0% Y.o.Y to RM6.2 mln. Revenue for the period slipped 48.4% Y.o.Y to RM14.5 mln. (The Edge Daily)

Kerjaya Prospek Group Bhd has won a RM146.7 mln contract from Eco Terraces Development Sdn Bhd, a subsidiary of Eco World Development Group Bhd. The contract, awarded to its wholly-owned unit Kerjaya Prospek (M) Sdn Bhd, entails main building works for the Eco Terraces project, a 34-storey building comprising 333 condominium units on Penang Island's North East District.

The work is expected to take 29 months from its commencement this month, with completion by February 2019. (The Edge Daily)

APFT Bhd's results for the quarter ended 30th June 2016, which was due to be announced by end of August, has been delayed to 7th September 2016. APFT has changed its financial year end from 31st March 2016 to 31st July 2016. APFT saw the resignation of its Chief Financial Officer Fazilah Nonsah on 19th August 2016 in pursue of her personal interests. (The Edge Daily)

Source: M+ Online Research - 6 Sep 2016