Following the U.S. Federal Reserve’s decision to maintain its interest rates near record low, the FBM KLCI (+0.7%) closed higher yesterday as the index registered its’ third straight winning day. The lower liners ended mostly higher as the FBM Small Cap and FBM ACE indices added 0.7% and 1.0% respectively, while the broader market closed in the green.

Market breadth stayed positive as gainers outnumbered losers on a ratio of 529-to- 313 stocks. Traded volumes climbed 23.9% to 2.11 bln shares amid the return of risk appetite for higher yields in the equities market.

More than two-thirds the key index constituents advanced, led by BAT (+RM1.20), followed by DIGI (+18.0 sen), Hong Leong Financial Group (+14.0 sen), Petronas Gas (+14.0 sen) and Sime Darby (+14.0 sen). Significant advancers on the broader market include Concrete Engineering (+20.0 sen), KESM Industries (+19.0 sen), DKSH (+16.0 sen) and Genting Plantations (+16.0 sen). Glomac jumped 4.0 sen after reporting a strong set of quarterly earnings.

Among the biggest losers on the broader market were Dutch Lady (-80.0 sen), Atlan Holdings (-30.0 sen), Panasonic (-26.0 sen) and MSM (-9.0 sen). Ekovest slipped 5.0 sen after announcing the disposal of a 40.0% in Duta-Ulu Klang Expressway (DUKE) for RM1.13 bln to the Employees Provident Fund (EPF). There were only three decliners on the big board – Genting Malaysia (-13.0 sen), IHH (-12.0 sen) and KLCC (-5.0 sen).

Asia stockmarkets advanced as the Shanghai Composite added 0.5%, boosted by property shares, while the Hang Seng Index added 0.4%, tracking the upbeat market sentiment on Wall Street overnight. Japanese stockmarkets, however, were closed for the Autumnal Equinox public holiday. ASEAN stockmarkets, meanwhile, ended mostly higher.

Wall Street closed higher overnight as the Dow gained 0.5% on better-than-expected weekly jobless claims data, which fell to the lowest level since July 2016. On the broader market, the S&P 500 added 0.7%, with 90% of the components stocks closing in the green, while the Nasdaq climbed 0.8% to register another record closing.

Earlier, European benchmark indices - the FTSE (+1.1%), CAC (+2.3%) and DAX (+2.3%) all rallied on the delay in the monetary tightening policies from the U.S. Federal Reserve. Mining and oil & gas companies stocks like BHP Billiton (+4.1%), Rangold Resources (+4.4%) and BP PLC (+1.9%) were higher.

THE DAY AHEAD

We see further near term upsides on Bursa Malaysia as investors are likely to capitalise on the mildly positive market environment to continue their buying and trading activities. This is likely to see the key index surpassing the 1,670 level and target the next critical resistance at the 1,680 level. Meanwhile, the key support remains at the 1,650 level.

The positivity is also expected to be broad-based with retail participation also taking hold after the recent lull and we expect interest on the lower liners, along with the broader market shares, to gain further traction. Therefore, market breadth, which has been insipid for the past month, is expected to pick up strength over the near term.

COMPANY BRIEF

Carimin Petroleum Bhd is planning to diversify into the construction business following the downturn in the downturn in the oil and gas industry. This follows the group’s proposed acquisition of a 60.0% equity stake in Noblecorp Builders (now known as Carimin Bina Sdn Bhd), which is mainly involved in general civil contracting and geotechnical work, for RM838,000 in July 2016.

The new segment is expected to contribute more than 25.0% of its earnings in the future. (The Star Online)

Malaysia Airports Holdings Bhd rose as much as 56 sen or 8.0% to RM7.30 on 22th September 2016 before closing at RM6.80 on speculation the Malaysian Cabinet had approved an upward revision to the airport passenger service charge (PSC).

It was speculated that the new PSC would be raised to RM11.00 for domestic flights from RM9.00 currently and RM73.0 for international flights from RM65.0 at KLIA and RM32.00 at KLIA2.

Transport Minister Datuk Seri Liow Tiong Lai has confirmed that a new set of higher PSC rates would be implemented by 1st January 2017, but no details were provided on the revision. (The Edge Daily)

Daya Materials Bhd has secured a 17-month contract to build retail facilities for the Aspen Vision City Sdn Bhd in Batu Kawan, Penang for RM224.0 mln.

Aspen Vision City is a joint-venture (JV) arrangement between Aspen Group and Ikano Group, the operator of Swedish furniture store IKEA in Singapore, Thailand and Malaysia. The development will feature Ikano’s first IKEA store in Penang. (The Star Online)

Comintel Corp Bhd's 2QFY17 net profit jumped 228.4% Y.o.Y to RM2.5 mln, from RM880,000 in the previous corresponding period, attributed by the improved performance of its manufacturing segment. Meanwhile, revenue came in 14.8% Y.o.Y higher at RM85.8 mln, from RM74.7 in 2QFY16.

Cumulative 1HFY17 net profit rose more than two-fold to RM7.9 mln, from RM2.7 mln a year ago, alongside revenue, which was 19.9% higher at RM189.5 mln vs. RM158.1 mln previously.

The group was also shortlisted for some advanced gasification system projects overseas and expects the award announcements by end-2016 or early 2017. (The Edge Daily)

DRB-Hicom Bhd is proposing to sell its 90.0% equity stake in Corwin Holding Pte Ltd to Columba Holdings Pte Ltd for S$189.7 mln (RM575.3 mln) - a 40.0% discount to the selling price of an aborted disposal deal in December last year.

The group had previously wanted to sell its Corwin stake to Evolutyon Real Estate Investment Holding Pte Ltd for S$317.0 mln (RM964.6 mln). However, the deal fell through in May 2016 when the former failed to fulfil its contractual obligations by the agreed date.

Corwin owns The Verge leasehold commercial development comprising an eight-level shopping mall building, valued at S$140.0 mln as at March 31, 2016 and another eight-storey building known as The Chill. (The Star Online)

Berjaya Land Bhd (BLand) slipped into a 1QFY17 net loss of RM27.2 mln vs. a net profit of RM9.9 mln a year ago, dragged down by the weaker contributions from its subsidiaries, Berjaya Sports Toto Bhd and H.R.Owen Plc. Quarterly revenue, however, rose 3.3% Y.o.Y to RM1.55 bln from RM1.5 bln last year.

Further, BLand has also signed a sale and purchase agreement with its parent company, Berjaya Corp Bhd to acquire 871.0 acres of freehold land in Sungai Tinggi, Ulu Selangor for RM155.0 mln to increase its land bank.

The land is located within an area zoned for industrial use but it is currently an oil palm estate. (The Star Online)

NetX Holdings Bhd has proposed to cancel three sen a share off the par value of its ordinary shares of five sen each to two sen, which could raise up to RM56.3 mln to write-off its accumulated losses of RM37.3 mln.

As at 21st September 2016, NetX had an issued and paid-up share capital of RM62.5 mln (1.2 bln shares). Any surplus after debt cancelling would be credited as retained earnings for future corporate exercises or to set off against any future accumulated losses.

The group expects to complete the corporate exercise by 1Q2017. (The Edge Daily)

Source: M+ Online Research - 23 Sep 2016