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Mplus Market Pulse - 27 Apr 2017

MalaccaSecurities
Publish date: Thu, 27 Apr 2017, 09:05 AM
An official blog in I3investor to publish research reports provided by Malacca Securities research team.

All materials published here are prepared by Malacca Securities. For latest offers on Malacca Securities trading products and news, please refer to: https://www.mplusonline.com.my

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  • The FBM KLCI continues to gain ground yesterday as market sentiments were still firm, brought about by the similar conditions on most global stock indices. Despite the sustained gains, however, there were apprehensions on the upside as the gains were benign after the recent strong market moves. Consequently, the key index just rose 0.2% for the day, but the FBM ACE index was the biggest gainer, rising 1.2% as it plays catch up after its recent bout of weakness, followed by the technology index (+1.0%).

 

  • Traded volumes were little changed at 3.55 bln shares (-3.0%) as investors were turning warier over the market’s direction, which was also reflected in the increasingly mixed market conditions where gainers just pipped losers on a 5- to-4 ratio.
  • Leading the gainers were Hong Leong Industries (+31.0 sen) – the stock rising after its 3QFY17 earnings jumped 26.6%. The day’s other outperformers include TAHPS (+22.0 sen) and Success Transformer (+19.0 sen). The main index heavyweight gainers were Maybank (+11.0 sen), Genting (+10.0 sen) and Hong Leong Financial Group (+32.0 sen).
  • Meanwhile, the lagging key index stocks were Petronas Chemicals (-14.0 sen), KLCC REIT (-15.0 sen), Digi (-2.0 sen) and Maxis (-2.0 sen). On the broader market, the main loser was Allianz (-20.0 sen) after it aborted its plan to acquire HSBC Amanah Takaful. Other key losers were Dutch Lady (-16.0 sen), Batu Kawan (- 10.0 sen) and Litrak (-9.0 sen)
  • The positive global market environment helped key Asian stock indices to march on with the Nikkei adding another 1.1%, while the Hang Seng rose 0.5%. The Shanghai Composite (+0.2%) rose for a second straight day, but gains were limited amid lingering concerns over the curbs on leveraged stock acquisitions.
  • U.S. stocks retreated overnight after President Trump unveiled his tax cut plans with few details, disappointing Wall Street that were hoping that the proposal could be a game changer for the U.S. economy. Still, the pullback was mild with the Dow falling just 0.1%, while the S&P 500 and Nasdaq closed virtually unchanged after all three indices shed their intraday gains.
  • European stocks indices, however, were marginally higher on a string of better than expected earnings. France’s CAC (+0.2%) jumped to a new nine-year high following Kering group’s strong results, while Deutsche Bank’s gains helped the DAX (+0.05%) to reach a new all-time high. The FTSE, meanwhile, improved 0.2%.

The Day Ahead

  • Despite the continuing uptrend yesterday, the market is looking increasing tired as the gains are tapering, while market participation is also showing signs of waning. With the recent market gains driven by expectations of a generous tax cut by the new U.S. President, yesterday’s unveiling was a let-down as details were scant.
  • This could see stocks on Bursa Malaysia reversing its uptrend and the key index may undergo a corrective phase over the near term as profit taking activities sets in. The reversal could also mean that the 1,767 level will continue to serve as the major hurdle and will serve as the immediate support. Further below there will be support at the 1,750-1,760 levels.
  • We also think profit taking could accelerate among the lower liners and broader market shares as retail players await for fresh impetuses to lead the market higher.

Company Briefs

  • Yinson Holdings Bhd has clinched a floating production, storage and offloading (FPSO) charter contract worth US$1.0 bln (RM4.4 bln), from Repsol SA's subsidiary Talisman Vietnam 07/03 BV (TLV).
  • The contract entails the supply, operation and maintenance of an FPSO facility for the Ca Rong Do field development located in Block 07/03 offshore Vietnam.
  • The 10-year contract also comes with a five yearly extension options exercisable by TLV. (The Star Online)
  • PUC Founder (MSC) Bhd had acquired Singapore-based IT business solutions provider, Enovax Pte Ltd for S$2.0 mln (RM6.3 mln) from its founder Erwin Foo Yong Jio, following a Memorandum of Understanding (MoU) signed between the two parties on 11th April 2017.
  • The acquisition is in-line with the group’s expansion and long-term growth plans to become a leading digital services provider. (The Star Online)
  • Petronas Chemicals Group Bhd (PetChem) has earmarked RM4.0 bln for its capex in 2017, with the bulk of expenditure allocated for its projects at the Pengerang Integrated Complex (PIC) in Johor. The capex will be financed internally as it still has RM7.4 bln in cash as of 31st December 2016.
  • The capex also includes investment for the recently-approved isononanol plant (INA) located within the PIC, with a total cost of US$442.0 mln (RM1.92 bln) which will be spread over three years. (The Star Online)
  • Astro Malaysia Holdings Bhd is working together with South Korea's content and media group, CJ E&M to co-produce intellectual properties (IPs), as well as to market and distribute Korean content in the Asean region.
  • The partnership will commence later this year with collaborations on eSports, coproduction, distribution of content from Korean channel tvN Asia and movies, as well as organize a Korean festival in Malaysia. (The Edge Daily)
  • Sunsuria Bhd hopes to secure infrastructure and development projects in the government and private sector, following the acquisition of a 51.0% equity stake in Prosperspan Construction Sdn Bhd - a firm that holds a Construction Industry Development Board (CIDB) licence.
  • The acquisition costs about RM408,000 and will provide the property developer with capabilities to venture into the construction sector. (The Edge Daily)
  • Bursa Malaysia Bhd has reported a 13.0% Y.o.Y jump in its 1Q2017 net profit to RM56.6 mln, from RM49.9 mln a year earlier, driven by improved share trade income from the securities market segment. Quarterly revenue also climbed to RM142.7 mln, from RM133.9 mln in 1Q2016.
  • Bursa noted that the performance of the securities market is expected to improve in 2017, tracking the recovery in global and domestic economic conditions.
  • In the derivatives market, however, uncertain weather conditions and volatile crude oil prices will continue to affect the trading of futures contracts. (The Star Online)
  • Willowglen MSC Bhd’s 1Q2017 net profit surged by 91.4% Y.o.Y to RM5.0 mln, from RM2.6 mln last year, on the back of a higher turnover from its Singapore operations. Revenue, meanwhile, also expanded by 49.0% Y.o.Y to RM38.3 mln, from RM25.7 mln in 1Q2016.
  • Moving forward, the group’s main revenue driver will continue to be from SCADA and integrated video surveillance systems in the transportation, power, water, waste-water treatment and housing estate projects. (The Edge Daily)
  • Property developer Thriven Global Bhd said its audited 2016 net loss (RM10.2 mln) was significantly larger than the unaudited 2016 net loss (RM5.6 mln), mainly due to impairment on disposal of Bukit Tunku land here.
  • The deviation was resulted by an impairment loss arising from the writedown of the cost of a freehold 10,226- sq.m. land at Bukit Tunku to its net realisable value. (The Edge Daily)
  • Mall operator Hektar Real Estate Investment Trust (REIT) is undertaking new asset enhancement initiatives (AEIs), which cost RM62.0 mln for two of its malls and will see the creation of another 60,000 sq. ft. of net lettable area (NLA).
  • The group’s 2017 business strategy remains three-pronged, namely implementing AEIs to increase NLA, focusing on completion of acquisition of 1Segamat, as well as improving efficiency in tenant management to optimise rental returns.
  • The AEIs will see a revamp of its Landmark Central mall in Kulim, Kedah, with expected completion this August, as well as its Subang Parade mall in Subang Jaya, to be completed in mid- 2018. (The Edge Daily)
  • RHB Bank Bhd expects its 2017 results to better than 2016, driven by improving loan growth from the small and medium enterprise (SME) segments.
  • Besides providing loans to SMEs, RHB also provides the ecosystem to help SMEs grow their business, such as financial supply chain, e-retail system and others.
  • Last year, SMEs consisted about 16.0% of its entire portfolio, an improvement from 14.0% when the group first embarked on this segment about two years ago. (The Edge Daily)  

Source: Mplus Research - 27 Apr 2017

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HowAh

What happened to the technical watch ah?

2017-04-27 19:27

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