Tracking the positive developments on key regional indices, the FBM KLCI (+0.7%) extended its gains for the third straight session yesterday as the key index traded in the positive territory for most of the trading session. The lower liners – the FBM Small Cap (+0.4%), FBM Fledgling (+0.4%) and the FBM ACE (+1.3%) also advanced, while the Mining sector (-0.8%) underperformed in the mostly positive broader market.

Market breadth stayed positive as gainers outnumbered losers on a ratio of 412-to- 341 stocks. Traded volumes gained 11.4% to 1.73 bln shares amidst the positive market sentiment.

More than two-thirds the key index constituents rose, led by Maybank (+RM1.40), followed by Genting (+18.0 sen), Hong Leong Financial Group (+16.0 sen), Petronas Gas (+16.0 sen) and KLK (+12.0 sen). Amongst the biggest advancers on the broader market include Lafarge (+35.0 sen), Panasonic (+28.0 sen), United Plantations (+28.0 sen) and Nestle (+22.0 sen). Padini added 8.0 sen to close at a fresh 10-year high.

In contrast, Frasers & Neave (-36.0 sen), Advanced Packaging (-26.0 sen), MSM (- 21.0 sen) and Ajinomoto (-18.0 sen) were amongst the biggest decliners on the broader market. Kerjaya Prospek fell 4.0 sen despite bagging RM146.7 mln contract for the construction of a 33- storey building. Meanwhile, Maybank (-2.0 sen) and Maxis (-1.0 sen) were the only two decliners on the FBM KLCI.

Asia benchmark indices extended their gains as the Nikkei climbed 0.3%, shored up by gains in financial stocks. The Shanghai Composite recovered all its intraday losses before closing 0.7% higher on gains in consumer and industrial stocks, while the Hang Seng Index (+0.6%) rose for the fourth straight session. ASEAN stockmarkets, meanwhile, ended mostly higher.

Wall Street closed higher overnight as the Dow (+0.3%) advanced for the third straight session after the ISM Non-Manufacturing PMI for August slowed to six-and-half years low to 51.4, clouding the possibility of an interest rate hike in September. On the broader market, the S&P 500 added 0.3%, while the Nasdaq (+0.5%) hit a fresh record closing.

Key European indices, however, closed mostly lower as the FTSE and CAC fell 0.8% and 0.2% respectively as the former was dragged down by banking stocks like Lloyds Banking Group PLC (-2.1%) and Royal Bank of Scotland. PLC (-3.0%). The DAX, meanwhile, pared off most of its intraday gains before closing 0.1% higher.

THE DAY AHEAD

There remains no change to our immediate market view and we expect stocks on Bursa Malaysia to maintain their upward trajectory over the near term as the calmer market conditions, brought about by optimism that the easy monetary environment, will prolong. This comes after the recent mixed economic data suggest that the economic outlook is still insipid and stimulus measures are still necessary.

Therefore, we expect institutional investors to continue bargain hunt on selective stocks, while the lower liners and broader market stocks will continue to garner trading interest from retail investors.

On the upside, the 1,690 level should be cleared with relative ease, but we see a stronger resistance at the 1,700 points level amid the toppish market valuations. The 1,680 level is now the immediate support level, followed by the 1,670 level.

COMPANY BRIEF

Sunway Bhd and Singapore-based real estate developer, Hoi Hup Realty Pte Ltd has won a tender to buy a 21,015 sq.m. land in Singapore slated for an Executive Condominium development for S$241.0 mln (RM725.0 mln). The 99-year leasehold land at Anchorvale Lane, Sengkang was acquired from the Housing and Development Board (HDB) of Singapore.

The land will be acquired by a proposed new joint-venture (JV) company at the tender price, in which Hoi Hup, SDPL, Oriental Worldwide Investments Inc and Azuki Investments Pte Ltd will have equity interest in the proportion of 62:30:5:3. SDPL’s cost of investment in the JV is S$72.3 mln (RM217.6 mln).

The proposed condominium project is slated to commence on 5th September 2016 and targeted to be completed within 48 months. (The Star Online)

CIMB Group Holdings Bhd’s subsidiary, CIMB Bank Bhd, plans to set up operations in Hanoi, Vietnam, by year-end after clinching an operating license from the State Bank of Vietnam on 6th September 2016 to operate a 100%-owned subsidiary in the country. The move is part of its expansion plans and CIMB aims to complete its Asean footprint by 2018, in line with its T18 initiative. (The Star Online)

British American Tobacco (M) Bhd’s (BAT) shareholders have approved the proposed sale of its properties in Petaling Jaya to LGB Properties (M) Sdn Bhd for RM218.0 mln at the company's extraordinary general meeting on 6th September 2016. The sale comprises land, offices, factories and warehouses within Virginia Park located in Petaling Jaya. For now, BAT will sell the land and rent it for a year from LGB. (The Edge Daily)

Khind Holdings Bhd has declared an interim dividend of 10 sen per share for the financial year ending 31st December 2016. The tax-exempt interim dividend will be paid on 7th October 2016 to shareholders. (The Edge Daily)

Loss-making Trive Property Group Bhd has proposed to buy out homebuilder Pakadiri Sdn Bhd, which owns a 20.9-ha. land in Kemaman, Terengganu, for RM19.6 mln cash. The land is located roughly 4km from Kertih Airport and the leasehold land had a market value of RM20.0 mln The company plans to co-develop the land with state government's Lembaga Tabung Amanah Warisan Negeri Terengganu.

Trive Property is still finalising the development plans for the Kertih Project and the company plans to seek financing for half of the RM19.6 mln cash payment, which theoretically could raise its borrowings by RM9.8 mln.

After deducting the cash in hand, its net borrowings could then be at 0.2x the shareholders' funds of RM41.0 mln. (The Edge Daily)

7-Eleven Malaysia Holdings Bhd has bought back 990,000 of its shares at RM1.50 apiece on 6th September 2016. The convenience store operator has been consistently conducting share buybacks throughout the year and so far doubled the treasury shares. With the earlier share buyback, it has purchased 81.7 mln, or 6.6%, of its shares and held them as treasury shares. (The Edge Daily)

Ho Wah Genting Bhd plans to place out up to 94.7 mln new shares to independent third party investors to raise funds to purchase copper rods for its wires and cables business. The purchases is intended to increase its inventory level for the production of wires and cables andr to expedite delivery period of finished goods to customers and to maintain competitiveness.

The issue price of the placement shares will not be less than the par value of its shares, which is five sen. The exercise may be undertaken in tranches. With a theoretical price of 5.5 sen per share, Ho Wah looks to raise as much as RM5.2 mln from the cash call. (The Edge Daily)

Source: M+ Online Research - 7 Sep 2016