• The FBM KLCI (+0.2%) edged higher last Friday led by buying support among selective banking heavyweights. The key index managed to gain 0.1% W.o.W. The lower liners, however, ended mostly lower as the FBM Fledgling and FBM ACE fell 0.1% and 0.5% respectively, while the broader market closed on a mixed note.

• Market breadth stayed positive as gainers were ahead of losers on a ratio of 386-to- 331. Traded volumes, however, dwindled 16.0% to 1.28 bln shares amid the directionless market.

• Petronas Dagangan (+14.0 sen) led the big board advancers list, followed by Hong Leong Financial Group (+8.0 sen), Maxis (+6.0 sen), Maybank (+6.0 sen), and Tenaga (+6.0 sen). Notable advancers on the broader market include plantations stocks like United Plantations (+50.0 sen), Batu Kawan (+14.0 sen) and Kim Loong (+9.0 sen), while Panasonic and Nestle added 42.0 sen and 24.0 sen respectively.

• In contrast, Frasers & Neave (-26.0 sen), SAM (-23.0 sen), Lafarge (-19.0 sen) and Apex Healthcare (-18.0 sen) were the biggest decliners on the broader market. KPJ Healthcare decline 2.0 sen after announcing its disposal of 30% stake in Hospital Penawar Sdn Bhd. Big board losers include MISC (-13.0 sen), RHB Bank (-6.0 sen), Hap Seng (-6.0 sen), Genting Malaysia (-5.0 sen) and IHH (-4.0 sen).

• Asia benchmark indices ended in the red as the Nikkei fell 0.5%, dragged down by the weakness in machinery and electrical shares after the Japanese Yen strengthened against the U.S. Dollar. The Hang Seng declined 1.4% to close 0.7% W.o.W lower, while the Shanghai Composite Index closed 0.9% lower for the day and falling 0.6% W.o.W ahead of the opening of the trading link between Hong Kong and Shenzhen exchanges. ASEAN stockmarkets, meanwhile, ended mostly lower.

• U.S. stockmarkets closed mixed last Friday as the Dow (-0.1%) retreated from its all-time high level after the rally in financial shares faded. On the broader market, however, the S&P 500 gained 0.04% after enduring a choppy trading session, led by the advance in the real estate sector (+1.2%).

• Key European benchmark indices extended their losses – the FTSE (-0.3%), CAC (-0.7%) and DAX (-0.2%) all fell, but managed to trim their intraday losses ahead of Italy’s constitutional referendum over the weekend. Notable decliners include banking shares like Banco Popular (-4.6%), Royal Bank of Scotland (-3.2%) and BNP Paribas (-2.3%).

The Day Ahead

• Although the key index tipped higher last Friday, the market environment is still largely insipid, judging by the thin market breadth. There also remain few noteworthy leads on the domestic front, while the post U.S. Presidential election rally seemed to have run its course.

• Under the prevailing market environment, we expect the mostly rangebound trend to prevail for longer. We expect the FBM KLCI to range between the 1,620-1,630 levels over the near term with bargain hunting activities and buying support to help maintain the key index above the 1,620 support level. Meanwhile, we think the 1,630 level will still be difficult to clear as the buying momentum is still weak ahead of the U.S. interest rate decision next week and the unstable Ringgit.

• The lower liners and broader market shares are also expected to remain listless as retail players are likely to continue staying on the sidelines amid the cautious market environment.

Company Briefs

• Scanwolf Corp Bhd is partnering Nissha Printing Co Ltd, Tokyo to manufacture plastic-related products, which includes luxury vinyl tiles and related products, calendar moulding related products and construction materials.

• Both parties inked a joint-venture (JV) contract on 2nd December, 2016 and Scanwolf’s participation in the JV will be funded via internally generated funds and is expected to be completed in 15 months. (The Edge Daily)

• Sasbadi Holdings Bhd and Universiti Malaya (UM) has inked a 10-year Memorandum of Agreement (MoA) which will see both parties collaborating to conduct research and product development on robotics education in science, technology, engineering and mathematics (STEM).

• The collaboration also includes syllabus development, conducting workshops for students and teachers, workbook development, and certification for students and teachers with the key objective of enhancing Malaysian students' STEM education and higher order thinking skills (HOTS). (The Edge Daily)

• Sunsuria Bhd has earmarked projects with an estimated gross development value (GDV) of RM1.55 bln to be launched in FY17. Moving forward, the group expects the aforementioned projects and the expansion of its first township, Sunsuria City to contribute positively to its performance by 2017. Sunsuria posted a 430.0% Y.o.Y jump in its 4QFY16 net profit to RM24.5 mln, from RM4.6 mln, while revenue nearly tripled to RM87.7 mln vs RM32.2 mln. The stellar performance was contributed by ongoing commercial developments like The Forum at Setia Alam and new commercial projects situated at Sunsuria City, Bell Avenue and Jasper Square.

• Full year net profit soared 230.0% Y.o.Y to RM44.0 mln, from RM13.3 mln in FY15, alongside a 137.0% surge in revenue to RM202.4 mln, from RM85.6 mln previously. (The Edge Daily)

• NTPM Holdings Bhd's 2QFY17 net profit fell 6.0% Y.o.Y to RM16.0 mln, from RM17.0 mln in the previous corresponding period – mainly due to a decline in foreign currency translation income. Revenue, however, came in 8.0% higher at RM164.2 mln, from RM152.6 mln in 2QFY16. The group has also declared a first interim single-tier dividend of 1.6 sen per share, payable on 6th January, 2017.

• For 1HFY17, net profit shed 15.0% Y.o.Y to RM25.4 mln, from RM30.0 mln a year ago – led by higher losses from the post commencement of Vietnam's initial tissue operation and higher cost of sales, despite revenue rising 7.0% to RM315.6 mln, from RM296.03 mln.

• Moving forward, the group remains cautiously optimistic on its prospects, citing weakened Malaysian consumer sentiment and increase in electricity and natural gas tariffs since the beginning of 2016. (The Edge Daily)

• QL Resources Bhd is planning to launch two additional FamilyMart outlets located at the TTDI station of the Sungai Buloh Kajang MRT line and KLIA2 by the end of this year, after having already launched two outlets to date. New services like banking and bill payment services will also be rolled out in phases from January onwards.

• The group is targeting to open about 300 outlets locally in five years with more outlets to be opened in the Klang Valley. The partnership with FamilyMart Co Ltd, is expected to breakeven in three to five years. (The Star Online)

• Mudajaya Group Bhd has clinched a contract worth RM810.0 mln to construct the Ayer Itam-Lebuhraya Tun Dr Lim Chong Eu by-pass in Penang, from Consortium Zenith BUCG Sdn Bhd. The project is expected to be completed in 36 months from the date of site possession by 2H2017. (The Star Online)  

Source: Mplus Research - 5 Dec 2016