• The FBM KLCI endured a choppy session to end the April month’s trading, but managed to tip up slightly at the close to allow the key index to end in the positive zone for a fifth straight month. As with the previous day, most indices made little headway, except for the construction index that rose 0.9%, while the Industrial index (-0.5%) was the main loser.
• Meanwhile, market interest continues to wane ahead of the long Labour Day weekend with the traded volumes amounting to 3.10 bln shares, down 10.0% from the previous day. Market breadth, however, was positive with gainers outpacing losers 544-to-403 stocks.

• On the winners list were Dutch Lady (+60.0 sen), Carlsberg (+34.0 sen), Petron Malaysia (+20.0 sen), Bursa Malaysia (+18.0 sen) and Southern Steel (+18.0 sen). Elsewhere, Datasonic rose 2.0 sen, while T7 Global rose 1.0 sen after both companies secured new contracts worth RM40.8 mln and RM215.0 mln respectively. On the big board, gainers were led by financial-related counters like RHB Bank (+16.0 sen) and Hong Leong Financial Group (+18.0 sen), followed by BAT (+44.0 sen), Tenaga (+8.0 sen) and Genting Malaysia (+4.0 sen).

• On the loser’s side, Petronas Gas (-26.0 sen) and Petronas Chemicals (-8.0 sen) were the top decliners on the FBM KLCI, followed by Westports (-4.0 sen) and Maxis (-6.0 sen) despite their poorer quarterly results. On the broader market, Scientex lost 35.0 sen after it proposed a private placement, while the other big losers were Nestle (-30.0 sen), F&N (-22.0 sen), Tasek (-16.0 sen), Bintulu Port (- 12.0 sen) and TAHPS (-11.0 sen).

• Regional indices ended the week on a soft note with most indices in the red. The Nikkei finished higher, gaining 0.6% after rebounding from its earlier losses. The Hang Seng meanwhile, declined 0.3%, but the Shanghai Composite maintained its uptrend with minute gains. ASEAN indices were mostly lower to end the week.

• U.S. stockmarkets mostly rallied, despite a volatile intraday session after President Donald Trump said he was considering breaking up major banks on Monday. The Dow (-0.1%) however, declined, weighed down by unsurprisingly by financialsrelated stocks. On the broader market, the S&P 500 closed up by 0.2%, while the Nasdaq (+0.7%) hit a record high, closing above the 6,000 psychological mark.

• European stocks retreated on Friday, albeit still notching weekly gains. The FTSE (-0.5%) declined for the second consecutive day, dragged down by Barclays (-5.2%) and Mediclinic (-4.4%). Both the DAX and CAC also ended 0.1% lower, amid the quarterly corporate earnings announcements. European markets are closed on Mayday.

The Day Ahead

• We continue to think the Malaysian stock market will remain rangebound over the near term in the absence of significant leads, both from domestic and foreign sources. As it is, the key index has been attempting to clear the 1,767 level convincingly over the past few sessions, but continues to tether close to the level, which appears to be holding on as a significant resistance for now.

• At the same time, market interest is also easing with fewer compelling buys and leads, albeit it remains above the 3.0 bln level that signifies that the overall market sentiment is still holding firm for now.

• Therefore, we continue to see increased volatility, particularly among the lower liners and broader market shares as pockets of buying interest could be met by quick profit taking activities, effectively keeping the key index within the 1,760-1,780 for now.

Company Briefs

• Muhibbah Engineering (M) Bhd‘s 51.0%- owned unit, Muhibbah Viccana JV has been awarded a RM584.8 mln contract from the Bintulu Port Authority to build a wharf, jetty and other associated facilities at Bintulu Port, Sarawak.

• Construction works in the project named Second Harbour Basin of Bintulu Port, will commence immediately and is expected to be completed by end-2019. (The Star Online)

• Weida (M) Bhd‘s 49%-owned indirect associate, Asaljuru Weida Sdn Bhd has clinched a 20-year government concession worth RM351.0 mln to build new buildings and facilities for the Sarawak General Hospital under a buildlease-maintain-transfer model.

• The workscope includes building a daycare centre, a medi-hotel with a multistorey car park complex for the Sarawak General Hospital in Kuching. (The Edge Daily)

• Upstream oil and gas player UMW Oil & Gas Corp Bhd (UMW-OG) is selling off its entire 50.0% stake in the NAGA 1 semisubmersible drilling rig for US$1.7 mln (RM7.2 mln) –a significant discount compared with the its original cost of investment in NAGA 1 of US$17.0 mln on 11th March, 2005. The rig is co-owned with Japan Drilling Co Ltd.

• The group has signed a sale and purchase agreement (SPA) with JDC Panama Inc for the proposed disposal.

• The disposal consideration of US$1.7 mln was determined after taking into account the prevailing market value of NAGA 1 of US$3.3 mln which based on an open tender exercise carried out on 13th January 2017. (The Edge Daily)

• Dagang Nexchange Bhd‘s (DNeX) associate company, Ping Petroleum Ltd, has received the approval from United Kingdom’s Oil and Gas Authority for a farm out agreement.

• DNeX noted that the approval is a key condition precedent to the farm out agreement between Ping’s wholly-owned subsidiary, Ping Petroleum UK Ltd (Ping UK) and a wholly-owned unit of Japanese integrated trading company Sumitomo Corp.

• The proposed project is an expansion of its diversification into the energy sector via its wholly-owned subsidiary, DNeX Petroleum Sdn Bhd. (The Edge Daily)

• Steel-maker Prestar Resources Bhd is planning to dispose of its plant at Song Than 3 Industrial Park in Vietnam for VND118.8 bln (RM22.7 mln) as part of its plans to relocate its manufacturing operation back to Malaysia.

• The proposed disposal is expected to reap a net gain of RM8.0 mln while the total original cost of the assets comprising land, building, fixture and fittings and related assets was RM12.1 mln in December 2006.The proceeds will be used to pare down its borrowings. (The Star Online)

• SCGM Bhd has proposed a bonus issue of 48.4 mln new shares on the basis of one bonus share-for-every three existing shares. The group has also proposed a bonus issue of 19.4 mln warrants on the basis of two free warrants-for-every 15 existing shares. (The Edge Daily)

• KBES Bhd will exclusively assemble and fabricate bodies of coaches and buses for China’s Beiqi Foton Motor Co Ltd (Foton) to be sold in Malaysia.

• The group has entered into a cooperation agreement with Foton to be the assembler of Foton's products to be sold to local authorised wholesalers, retailer or end users here for three years. Consequently, KBES will transform its Kamunting facility into a full-fledged assembly plant for Foton's products. (The Edge Daily)

• Automotive interior furnishing and components supplier SMIS Corp Bhd is acquiring a 16,186 sq. m parcel of land in Kawasan Industri Terpadu Indonesia China, West Java, Indonesia for 36.5 bln rupiah (RM11.9 mln), which will be used to construct factory/factories as part of its expansion plans into Indonesia.

• SMIS is also positive on the potential and opportunities available in Indonesia due to the consistent growth in the country’s automotive industry. (The Edge Daily)

• Malaysia Airports Holdings Bhd’s (MAHB) 1Q2017 net profit more than tripled to RM62.0 mln, from RM17.0 mln a year ago, attributed to contributions from its Malaysia segment. Quarterly revenue also gained 7.3% Y.o.Y to RM1.09 bln, from RM1.02 bln.

• Moving forward, the group targets a 6.5% growth rate for airports in Malaysia - passenger traffic increase, driven by the increased level of tourism interest in the country, in-tandem with the Southeast Asian Games in August and September this year, as well as its participation in the Visit Asean@50 tourism campaign. (The Star Online)
• DiGi.Com Bhd (Digi)'s 1Q2017 net profit fell 6.0% Y.o.Y to RM373.1 mln, from RM399.0 mln in the same quarter last corresponding year, dragged down by lower prepaid revenue. Revenue for the quarter fell to RM1.57 bln, from RM1.65 bln in 1QFY16.

• Moving forward, Digi will strive to strengthen its internet propositions at targeted segments to continue to grow postpaid and stabilize its prepaid segment with sustainable customer base contribution. (The Star Online)

• Caring Pharmacy Group Bhd’s 3QFY17 net profit jumped by 3.3 times to RM5.3 mln, from RM1.6 mln a year ago – led by higher sales generated from existing outlets due to aggressive and extensive promotional campaign, while revenue increased by11.9% Y.o.Y to RM115.7 mln, from RM103.4 mln last year.

• Cumulative 9MFY17 net profit almost double to RM8.8 mln, from RM4.6 mln in a year earlier, alongside revenue which rose 15.7% Y.o.Y to RM340.5 mln, from RM294.2 mln.

• However, Caring expect a challenging environment moving forward, considering the weakening Ringgit, rising inflationary pressure and weak consumer purchasing power. (The Edge Daily)

• Felda Global Ventures Bhd (FGV) has dismissed media reports alleging that it had violated its own sustainability policies and industry standards by clearing peat forests in Indonesia.

• The group has secured all necessary approvals from the relevant authorities in Indonesia, in respect of the development of its unit PT Temila Agro Abadi's plantation in West Kalimantan Indonesia, which started in late 2014. (The Edge Daily)  
• Goodway Integrated Industries Bhd is establishing an investigation committee to probe alleged irregularities highlighted by its external auditor with regards to its 2016 accounts.
• To recap, its external auditor, Messrs Kreston John & Gan, has expressed a qualified opinion in its report, following alleged irregularities comprising impairments worth a total of RM45.5 mln. (The Edge Daily)
   

Source: Mplus Research - 2 May 2017