• Despite opening higher at the start of the trading bell, quick profit taking sent the FBM KLCI (-0.2%) lower yesterday. The lower liners, however, ended mostly higher as the FBM Small Cap and FBM Fledgling climbed 0.3% and 0.6% respectively. Meanwhile, only the Construction (+0.6%) and Properties (+0.4%) sub-sectors outperformed the negative broader market.

• Market breadth stayed positive as advancers pipped decliners on a ratio of 522-to-402 stocks. Traded volumes, added 10.8% to 3.40 bln shares on rotational play amongst the lower liners.

• BAT (-RM2.46) slumped on speculation of a cigarette price hike, while other key losers on the FBM KLCI were Petronas Dagangan (-94.0 sen), Hong Leong Financial Group (-34.0 sen), Petronas Gas (-16.0 sen) and Genting (-8.0 sen). Notable decliners on the broader market were Far East Holdings (-35.0 sen), MPI (- 18.0 sen), APM Automotive (-16.0 sen), Globetronics (-13.0 sen) and BLD Plantations (-12.0 sen).

• Amongst the biggest gainers on the boarder market were consumer products stocks like Dutch Lady (+40.0 sen), IQ Group (+28.0 sen) and Panasonic (+20.0 sen), while United Plantations and United Malacca added 50.0 sen and 17.0 sen respectively. Meanwhile, big board winners include Axiata (+8.0 sen), CIMB (+2.0 sen), Hong Leong (+2.0 sen), Public Bank (+2.0 sen) and Petronas Chemicals (+2.0 sen).

• The Nikkei (+0.1%) extended its uptrend, lifted by gains in the utilities sector (+2.3%). The Hang Seng closed 0.2% higher, but the Shanghai Composite (- 0.4%) retreated for the third straight session. ASEAN stockmarkets, meanwhile, ended mixed.

• U.S. stockmarkets ended on a mixed note as the Dow fell 0.2% as banking shares lost ground. On the broader market, however, the S&P 500 gained 0.1%, driven by the energy sector (+1.1%) after crude oil price rallied on lower-thanexpected inventory level, while the Nasdaq closed 0.4% higher.

• European benchmark indices – the FTSE (+0.4%), CAC (+0.5%) and DAX (+0.4%) all advanced as the U.K. formally applied to leave the European Union. Meanwhile, the merger between The London Stock Exchange and Deutsche Börse was blocked by the European Commission, marking its third failure to merge since 2000.

The Day Ahead

• Although the lower liners performed as expected, index-linked stocks went south yesterday instead, numbing the expected positive streak in tandem with the positive overnight performance of key global indices. The pullback has also left the key index tethering at the 1,750 level that could still prove to be a difficult level to clear convincingly.

• Still, we think the market will make another attempt at clearing the above level over the near term as the broad market undertone is largely positive and the key index could be lifted by the fresh rotational play among the index heavyweights. Nevertheless, we think the upsides may be limited as fresh catalysts are still absent. Therefore, we see the recent high of around 1,760 serving as the near term resistance.

• The lower liners may also continue to see firm following, but the broader market could remain mixed as market players search for fresh catalyst.

Company Briefs

• Bintai Kinden Corp Bhd’s 69.8%-owned subsidiary, Bintai Kidenko Pte Ltd has secured a S$14.2 mln (RM44.9 mln) contract for sub-contract works on the Raffles Hotel and Shopping Arcade in Singapore. The contract is non-renewable with a fixed contract period and the subcontract work is expected to be completed by June 2018. (The Star Online)

• Comintel Corporation Bhd (Comcorp)'s 4QFY17 net profit fell 17.3% Y.o.Y to RM4.84 mln, dragged down by lower margins, coupled with higher losses in its system integration and maintenance service (SIMS) due to a reduction in gross margin and lower revenue that dropped 2.1% Y.o.Y to RM106.5 mln.

• For FY17, however, cumulative net profit rose 30.4% Y.o.Y to RM17.6 mln. Revenue for the year climbed 8.0% Y.o.Y to RM406.8 mln. (The Edge Daily)

• Trive Property Group Bhd returned to profitability in 4QFY17 with a net profit of RM3.3 mln vs. a net loss of RM18.5 mln in the previous corresponding quarter on completion of its debt restructuring, private placement and ESOS shares issue as well as a full settlement of bank borrowings. Revenue for the quarter, however, fell 15.9% Y.o.Y to RM1.3 mln.

• For FY17, cumulative net profit stood at RM2.1 mln vs. net loss of RM26.2 mln in the previous corresponding year. Revenue for the year, however, sank 91.0% Y.o.Y to RM3.2 mln. (The Edge Daily)

• Hai-O Enterprise Bhd’s 3QFY17 net profit grew 57.1% Y.o.Y to RM15.4 mln, on higher turnover recorded at its multi-level marketing (MLM) and retail divisions. Revenue for the quarter improved 33.1% Y.o.Y to RM107.2 mln.

• For 9MFY17, cumulative net profit soared 63.0% Y.o.Y to RM41.0 mln. Revenue for the period added 36.3% Y.o.Y to RM285.6 mln. (The Edge Daily)

• Practice Note 17 (PN17) company, Kuantan Flour Mills Bhd (KFM) plans to issue a private placement of 20.5 mln shares and a five-for-two rights issue of up to 221.7 mln shares to raise up to RM48.4 mln for debt repayment and working capital.

• The proposed plan is aimed at regularising its financial condition and return the company into the black, while reducing its liabilities and strengthening its cash flow position.

• The private placement, representing 30.0% of its total shares, would be taken up by controlling shareholder and director of Lotus, Wong Sak Kuan, and another director, Wong Kim Loong.

• Based on the issue price of 20 sen per placement share, the proposed activity would raise RM4.1 mln in gross proceeds. It expects to submit the proposed regularisation plan by end-June 2017 with completion expected by 1Q2018. (The Edge Daily)

• A-Rank Bhd’s 2QFY17 net profit increased 10.5% Y.o.Y to RM3.8 mln, lifted by improved margins on higher average selling prices. Revenue for the period, however, fell 10.5% Y.o.Y to RM114.6 mln.

• For 1HFY17, cumulative net profit added 18.0% Y.o.Y to RM8.4 mln. Revenue, however, declined 6.6% Y.o.Y to RM238.4 mln. (The Edge Daily)

• Kim Loong Resources Bhd’s 4QFY17 net profit increased 35.6% Y.o.Y to RM16.8 mln, on improved contributions from its plantation operations, driven by better fresh fruit bunch (FFB) prices. Revenue for the quarter rose 48.5% Y.o.Y to RM256.0 mln.

• For FY17, cumulative net profit dipped 3.3% Y.o.Y to RM71.3 mln. Revenue for the year, however, climbed 17.8% Y.o.Y to RM892.6 mln. A final single tier dividend of 8.0 sen per share, payable on 29th August 2017 was declared. (The Edge Daily)

• Subur Tiasa Holdings Bhd's 2QFY17 net loss widened to RM8.8 mln, from RM1.8 mln in the previous corresponding quarter, on lower contribution from its oil palm segment. Revenue for the quarter declined 24.9% Y.o.Y to RM121.2 mln.

• For 1HFY17, cumulative net loss widened to RM8.7 mln, from RM1.7 mln recorded in the previous corresponding period. Revenue for the period decreased 14.6% Y.o.Y to RM262.0 mln. (The Edge Daily)

• QL Resources Bhd has disposed of its remaining shareholding of about 38.0% in QL KK Properties Sdn Bhd for a cash consideration of about RM7.3 mln, in line with the group’s strategic review to focus on its core business.

• QL had on 17th March 2017 disposed of about 62.0% equity interest in QL KK Properties to a related party, namely Ruby Technique Sdn Bhd for a cash consideration of RM11.8 mln.

• With the exercise of the put option, the expected gain arising from the disposal of the balance of the 1,430,000 ordinary shares would be another RM5.8 mln. The sales proceeds will be utilised as working capital. (The Edge Daily)
   
• Paramount Corp Bhd's wholly-owned subsidiary, KDU University College (PG) Sdn Bhd will raise up to RM200.0 mln under a 15-year Islamic Medium Term Notes programme (Sukuk Ijarah) to fund the development of a new university campus in Penang.

• KDU University College had already issued RM30.0 mln in nominal value of the sukuk on 29th March 2017. The sukuk's profit would be based on a fixed rate or floating profit rate basis and determined prior to the issuance of the sukuk ijarah. (The Edge Daily)

• Yen Global Bhd’s 2QFY17 net loss narrowed to RM2.0 mln, from RM2.3 mln recorded in the previous corresponding quarter, driven by festive sales arising from the Chinese New Year season. Revenue for the quarter, however, declined marginally, by 0.2% Y.o.Y, to RM5.1 mln.

• For 1HFY17, cumulative net loss narrowed to RM3.8 mln vs. RM3.9 mln recorded in the previous corresponding period. Revenue for the period gained 1.9% Y.o.Y to RM11.2 mln. (The Edge Daily)  

Source: Mplus Research - 30 Mar 2017