• The FBM KLCI (+0.2%) ended the week on a positive note – led by buying-support on banking and telco heavyweights. On a weekly basis, however, the key-index eased 0.3% W.o.W amid waning sentiments on the back of the Federal Reserve’s hawkish stance on interest rates, coupled with the aborted Bandar Malaysia deal. All the lower liners – the FBM Small Cap (+0.7%), FBM Fledgling (+1.0%) and FBM Ace (+1.7%) advanced, while most of the other sub-sectors closed higher on Friday.

• In-tandem with the recovery of the local bourse, market breadth turned positive with 617 advancers against 327 decliners. Traded volumes also gained slightly by 3.4% to 3.57 bln – led by buying-support in the small caps.

• Bargain-hunting activities in banking heavyweights like Hong Long Financial Group (+14.0 sen), Ambank (+11.0 sen), and Maybank (+10.0 sen) pushed the keyindex higher, followed by Axiata (+7.0 sen) and Kuala Lumpur Kepong (+6.0 sen) at Friday’s close. Meanwhile, broader market gainers were Panasonic Manufacturing (+78.0 sen), JHM (+42.0 sen), Malaysian Pacific Industries (+40.0 sen), Sam Engineering (+31.0 sen) and Kossan (+27.0 sen).

• Meanwhile, significant decliners like Sapura Energy (-13.0 sen), Batu Kawan (- 10.0 sen), Mintye Bhd (-10.0 sen), Rapid (- 10.0 sen) and UMW Holdings (-8.0 sen) weighed on the broader market. Main Board laggards include Petronas Gas (- 42.0 sen), Hap Seng Consolidated (-14.0 sen), Petronas Dagangan (-10.0 sen), BAT (-8.0 sen) and MISC (-5.0 sen).

• The majority of Asian equities retreated on Friday, as investors booked-in profits ahead of U.S. jobs data and a key European Presidential election. The Shanghai Composite declined 0.8%, with all of its sub-sectors in the red, while the Hang Seng (-0.8%) fell for the secondstraight day. The Nikkei was closed in conjunction with the Children’s Day public holiday. Most ASEAN indices, meanwhile, closed in the negative territory.

• Major U.S. benchmark indices ended favourably last Friday on the recovery of energy stocks, while extending its gains for the third straight week. The Dow (+0.3%) inched above the 21,000 psychological level, as investors cheered the robust employment data. The S&P 500, meanwhile, notched 0.4%, closing at a new record high amid better-thanexpected quarterly results and anticipation of tax reform plans under President Donald Trump. The Nasdaq (+0.4%) also finished near to its historic high.

• Earlier, key European bourses jumped, spurred by gains in materials and energyrelated counters, in-line with the rebound in crude oil and copper prices. The FTSE gained 0.7% - buoyed by the likes of Randgold (+4.3%) and Glencore (+4.3%). The DAX also rallied 0.6%, while the CAC jumped 1.1%, ahead of the French election.

The Day Ahead

• The FBM KLCI has done well to cast aside concerns over the Bandar Malaysia saga to stage a decent recovery last Friday, which we think will continue at the start of the week. This follows the record closing on the S&P 500 last Friday and easing political concerns in Europe with a new centrist President in France.

• Back home, concerns over the Bandar Malaysia issue is also tapering as a new Chinese party is rumoured to be in the running for the above project. Therefore, we see the FBM KLCI continuing to build on last Friday’s positivity to head towards the 1,770 resistance again, while the 1,750 remains the main support for now.

• We also see the renewed interest among the lower liners and broader market shares amid the more stable market environment and this will continue to keep market breadth and depth at reasonable levels.

Company Briefs

• Hua Yang Bhd is planning to acquire a 3.8-ac. parcel of land in Bandar Meru Raya, Perak, from Bumi Semarak Development Sdn Bhd, for RM15.3 mln. The land will be developed into a mixed project, which will include 720 units of serviced apartments and 72 units of commercial shop lots with a gross development value (GDV) of RM295.1 mln.

• The purchase will be funded through internal funds and/or bank borrowings and is slated to be completed by the 2Q2018. (Bernama)

• Uzma Bhd has proposed to issue new shares to third party investors which will be identified later to raise up to RM50.6 mln. The proceeds are mainly for capital expenditure (59.3%), bank borrowings repayment (29.6%), working capital (9.6%) and estimated expenses relating to the proposed private placement (1.5%).

• The private placement will involve up to 29.1 mln new shares (10% of its total number of issued shares), at an issue price to be determined and announced later. (The Edge Daily)

• Prestar Resources Bhd plans to acquire the remaining 25.0% (or 750,000 shares) shareholding in Prestar Engineering Sdn Bhd (PESB) which it does not hold, from Lam Chung Ming for RM4.5 mln. PESB manufactures road furniture and related products like guardrails, post and packer.

• The proposed acquisition will enable Prestar to consolidate its shareholding and control on PESB for expansion of its product range into domestic as well as regional road furniture market. (The Edge Daily)

• Star Media Group Bhd has received an expression of interest from to buy its 52.5% stake in Singapore-listed Cityneon Holdings Bhd. The group’s Board of Directors will decide on the matter and an appropriate announcement will be made in due course. (The Star Online)

• SLP Resources Bhd is planning a private placement to raise up to about RM40.0 mln to fund the construction of a new warehouse, as well as to acquire two high-performance blown film lines. The above exercise will also be paired with a one-for-five bonus issue.

• The private placement includes the issue of 16.8 mln new shares, representing 6.79% of SLP's existing issued share capital and will enable SLP to expand its existing production capacity from 24,000 metric tonnes per year to 32,000 metric tonnes per year.

• Separately, the group posted a 20.0% Y.o.Y fall in 1Q2017 net profit to RM4.1 mln, from RM5.1 mln a year ago, while revenue grew marginally by 2.9% Y.o.Y to RM46.0 mln, from RM44.7 mln previously in 1Q2016. The lower earnings were attributed to losses from foreign currency translation. (The Edge Daily)

• APM Automotive Holdings Bhd's 1Q2017 net profit gained 12.9% Y.o.Y to RM10.6 mln vs. RM9.3 mln a year ago – on better sales and lower foreign exchange losses. Quarterly revenue, however, grew 6.5% Y.o.Y to RM294.1 mln, from RM276.1 mln last year. (The Edge Daily)

• Warisan TC Holdings Bhd made a turnaround in its 1Q2017 earnings after posting a net profit of RM332,000 compared with a net loss of RM1.2 mln a year ago, thanks to a 7.3% Y.o.Y increase in its revenue to RM112.6 mln, from RM105.0 mln previously. (The Edge Daily)

• NetX Holdings Bhd is collaborating with China-based E-DO Business Technology Corp to provide e-commerce online payment, e-wallet and loyalty programme solutions services in Cambodia, Malaysia and Thailand.

• NetX's subsidiary, Payallz Sdn Bhd entered into a technology partnership agreement with E-DO, which specialises in the provision of payment services for Alipay, WePay and Union Pay. (Bernama)  

Source: Mplus Research - 8 May 2017