• The FBM KLCI closed higher yesterday, in tandem with the positive regional performance, casting aside the weakness in other regions. The key index’s gains, however, were relatively benign - just 0.15%, with the key index managing to climb back above the 1,740 points level. The FBM ACE index was the biggest outperformer (+0.9%), while the Industrial Products index slipped 0.4%.

• Despite the improved market, however, traded volumes fell 7.4% to 2.64 bln shares as there were few fresh noteworthy leads. Still, gainers managed to beat losers 498-to-368 stocks amid the mild bargain hunting activities.

• After emerging as the top loser a day earlier, Ajinomoto turned top gainer with a 28.0 sen rise, followed by Vitrox (+26.0 sen), SCC Holdings (+19.0 sen) and cement manufacturer Lafarge Malaysia (+17.0 sen). On the FBM KLCI, banking stocks like RHB Bank (+16.0 sen), Maybank (+3.0 sen) and Ambank (+10.0 sen) were among the big movers.

• On the losers list are KESM (-28.0 sen) – reversing most of its gains a day earlier, AEON Credit (-20.0 sen), MPI (-12.0 sen) and United Malacca (-12.0 sen). On the key index, Petronas group of companies - Petronas Gas (-36.0 sen), Petronas Dagangan (-8.0 sen) and Petronas Chemicals (-6.0 sen) were the big losers, followed by Maxis (-5.0 sen) and Genting Malaysia (-6.0 sen).

• Regional stock indices close broadly higher yesterday, with the Shanghai Composite (+0.04%) breaking its streak of four straight days of decline with a slight gain, while the Hang Seng surged nearly 1.0% amid better-than-expected export data from Japan. Despite the better exports, however, the Nikkei closed virtually unchanged, while most ASEAN indices closed in the green.

• U.S. stocks surged after the Treasury Secretary hinted the President Trump’s tax cut proposals would be unveiled soon. At the same time, better results from American Express helped to also shore up sentiments. Both the Dow and S&P 500 rose 0.8% respectively, while the Nasdaq climbed 0.9%.

• European stocks also closed higher overnight despite the fresh terror attacks in Paris on optimism that a business friendly candidate will emerge as the next France President. All major equity indices rose with the CAC rising nearly 1.5%.

The Day Ahead

• We see stocks on Bursa Malaysia ending the week on a firmer note following the lead of global indices that has been given a fresh boost by the potential unveiling of President Trump’s long awaited tax cuts. This will extend the key index recovery which is also likely to permeate to the broader market.

• The improvements could see the key trending within the 1,740 and 1,750 points level over the near term as we do not anticipate significantly higher gains due to the upcoming long weekend that could leave more market players on the sidelines.

• Therefore, we do not anticipate the day’s traded volumes to jump significantly, albeit we think the lower liners and broader market stocks could still garner selective rotation plays and bargain hunting activities.

Company Briefs

• Serba Dinamik Holdings Bhd is planning to partner with UK-based Nicol & Andrew Group Plc (N&A) for maintenance, repair and overhaul (MRO) and in-situ or on-site services in the Malaysian oil and gas, petrochemical, oleochemical, marine, plantation, energy, power production and distribution, water and waste water as well as general industries.

• The parties have agreed to form an exclusive partnership and sole agency for marketing and performing N&A's patented and non-patented technologies for in-situ or on-site machining. Serba also intends to form a tie-up with N&A for the provision of finishing services and sole agency for selling and distributing of N&A parts and products in Malaysia. (The Star Online)

• Public Bank Bhd‘s 1Q2017 net profit rose slightly by 1.6% Y.o.Y to RM1.25 bln, from RM1.23 bln in the same period last year, on the back of higher net interest and Islamic banking income, as well as lower taxes. Revenue was also higher at RM5.03 bln, compared to RM5.01 bln.

• The group is banking on organic expansion to further grow its retail banking - leveraging on its strong corporate branding as a reputable, safe and efficient commercial bank. The group will also capitalise on opportunities in its overseas operations to further enhance its business (The Edge Daily)

• Former Gabungan AQRS Bhd Executive Director and Deputy Chairman, Alvin Ng Chun Kooi has ceased to be a substantial shareholder in the company after disposing its 1.4% equity stake (or 5.7 mln shares) via an off-market transaction on 17th April 2017. Following the sale, Chun Kooi will hold only 3.0% stake (or 12.1 mln shares) in Gabungan. ? At the same time, his brother, Ng Chun Seong also sold his entire 3.4% stake (or 13.4 mln shares) in the company. Both filings did not disclose the price of the transactions. (The Edge Daily)

• KPJ Healthcare Bhd plans a subdivision of every one existing share-into-four subdivided shares to promote trading liquidity. Following the proposal, its enlarged share capital would grow by some 4.26 bln shares, from 1.06 bln shares as at 18th April 2017.

• Assuming the full exercise of the outstanding warrants and employees’ share option scheme, the enlarged number of issued shares will be 4.76 bln subdivided shares upon completion of the proposed share split. KPJ Healthcare expects to complete the share split by 3Q2017. (The Edge Daily)

• WZ Satu Bhd's 2QFY17 net profit rose 9.0% Y.o.Y to RM5.3 mln, from RM4.9 mln last year, owing mainly to better performance in its manufacturing and oil and gas (O&G) operations, while revenue jumped 21.0% Y.o.Y to RM138.0 mln, from RM114.0 mln in the previous corresponding quarter.

• Cumulatively, the group's 1HFY17 posted a 48.0% Y.o.Y hike in net profit to RM13.8 mln, against RM9.3 mln in 1HFY16. Its revenue also expanded 23.7% Y.o.Y to RM268.2 mln, from RM216.9 mln. (The Edge Daily)

• Perwaja Holdings Bhd will be de-listed on 4th May 2017 after it failed to submit its regularisation plan within the stipulated timeframe and subsequently had its application for time extension for submission rejected by Bursa. However, if it files an appeal by 28th April 2017, the de-listing may be deferred pending the decision on the appeal.

• Syarikat Pembinaan Anggerik Sdn Bhd is suing Malaysia Airports Holdings Bhd (MAHB) for RM44.0mln over alleged losses pertaining to work done. The former is claiming for losses arising from development and upgrading work at the Penang International Airport - awarded to the firm in 2010, and construction and completion of site office, central utilities building and airside drainage work awarded in 2011.(The Star Online)

• Meda Inc Bhd is selling its hotel ‘The Summit Hotel Bukit Mertajam’ in Penang for RM20.0 mln to partially fund its working capital requirements. The selling price represents a premium of 45.1% over the market value of the property of RM13.0 mln, as ascribed by LaurelCap Sdn Bhd on 30th December 2016 and will result in a gain of RM6.1 mln.

• The net proceeds from the proposed disposal - estimated to be about RM18.3 mln will be used to fund its working capital needs including payment to creditors, administrative expenses and other operating expenses.

• Meda said the move is to dispose of a low-revenue generating asset and to monetise its investment and to reinvest the capital into the group's core business activity, which is property development. The group expects to complete the proposed disposal by early 3Q2017. (The Edge Daily)

• British American Tobacco (M) Bhd's (BAT) 1Q2017 net profit fell 33.0% Y.o.Y to RM114.2 mln, from RM172.6 mln in the previous corresponding period, dragged down by lower sales volume, although slightly mitigated by lower operating expenses after its costefficiency measures last year. Revenue also declined by 24.5% Y.o.Y to RM770.7 mln, from RM1.02 bln previously. Following the weaker performance, the group has proposed a lower dividend of 40.0 sen per share, compared with 55.0 sen a year ago.

• Moving forward, the group’s expects headwinds with lower consumer sentiment and illegal cigarette trade, which continued to dominate the overall industry volume. (The Star Online)  

Source: Mplus Research - 21 Apr 2017