• Malaysian stocks retreated alongside global stocks as market sentiments were affected by concerns over the Trump presidency that could also affect his tax reduction and infrastructure spending plans. This saw the FBM KLCI lingering in the negative territory for the entire day, albeit it managed to close off its day low on mild bargain hunting on some beaten down index heavyweights. Only the consumer index (+0.02%) closed positively, while the trading/service index (-0.6%) was the main underperformer.

• Expectedly, market breadth was negative with losers overwhelming gainers on a 2- to-1 ratio. Traded volumes were considerably thinner at 2.99 bln shares, down 13.3% from the previous day as market players stayed on the sidelines due to negative market environment.

• Top losers were AEON Credit (-56.0 sen), KESM (-26.0 sen), Allianz (-22.0 sen) and Time dotCom (-22.0 sen). Meanwhile, MRCB fell 20.0 sen after it made a cash call to raise up to RM2.86 bln. Heavyweight losers include Genting (- 23.0 sen), Axiata (-17.0 sen) and Petronas Dagangan (-32.0 sen) - the latter despite reporting stronger quarterly earnings.

• The broad market gainers of the day were Pos Malaysia (+13.0 sen), Mudajaya (+12.0 sen), Heveaboard (+11.0 sen) and APM (+10.0 sen). On the big board, the main movers were BAT (+26.0 sen), Genting Malaysia (+5.0 sen), IJM (+3.0 sen) and IHH (+2.0 sen).

• Key Asian stock indices also closed lower in tandem with the weakness in European and U.S. indices. The Nikkei fell 1.3%, overriding Japan’s better-than-expected 1Q2017 GDP performance as the Yen rose against the U.S. Dollar. Both the Hang Seng and Shanghai Composite also fell. Except for Indonesian stocks, the other ASEAN indices closed in the red.

• U.S. stock indices found some stability after the Dow rose 0.3% and the S&P 500 gained 0.4% overnight following the release of better-than-expected employment and regional manufacturing data – alleviating the political crisis engulfing the President. The Nasdaq also resumed its uptrend, closing 0.7% higher for the day.

• European stock indices continued to decline amid the ongoing political uncertainties in the U.S., albeit the indices closed off their day’s low. The FTSE was the biggest underperformer as it slipped 0.9%, followed by the CAC (- 0.5%) and the DAX (-0.3%). Sentiments were also roiled by the Brazil-linked stocks as the country faced fresh political uncertainties. THE DAY AHEAD

• After falling for the past three sessions, the FBM KLCI may stage a rebound to end the week on a positive note in tandem with recovery on Wall Street overnight. Although we see mild bargain hunting activities returning, the near term market sentiments remain iffy as the political crisis in the U.S. has yet to resolve, thereby the cautiousness will still prevail for now and the upsides could be limited as selling into strength activities could take hold.

• On the upside, the 1,770 level will be the first hurdle, followed by minor technical resistances at 1,772 and 1,775 respectively.

• The broader market shares and lower lines could also see renewed buying, but the overall trend is likely to be insipid amid the sustained market uncertainties.

COMPANY BRIEFS

• Petronas Dagangan Bhd (PetDag) posted a 15.4% Y.o.Y growth in its net profits to RM253.2 mln, from RM219.4 mln last year – due to higher average selling price, despite lower sales volume. Revenue, meanwhile, surged 36.2% Y.o.Y to RM6.69 bln, from RM4.91 bln in 1Q2016. The group declared an interim dividend of 14.0 sen a share, payable on 16th June 2017. (The Star Online)

• Press Metal Bhd’s 1Q2017 net profit soared 56.6% Y.o.Y to RM148.1 mln, from RM94.6 mln in the previous corresponding year, attributed to higher production output generated by its Samalaju Phase 2 smelting plant in Sarawak and improved metal price. Revenue expanded at a similar quantum to RM2.02 bln, from RM1.29 bln a year ago. Press Metal also proposed a first interim dividend of 1.5 sen per share, which will be payable on 21st June 2017. (The Edge Daily)

• Tambun Indah Land Bhd is planning to launch two new landed residential property projects with a combined gross development value (GDV) of RM122.7 mln, in its Pearl City township development in Penang by mid-2017. Pearl City is located at Simpang Ampat in Seberang Prai South.

• As at 31st March, 2017, Tambun Indah had RM1.5 bln worth of ongoing projects, with average take-up rate of 82.7%. Unbilled sales amounted to RM153.8 mln, which is expected to contribute positively to the group for the next 2-3 years. (The Star Online)

• Hard disk drive manufacturer JCY International Bhd posted a 2QFY17 net profit of RM15.4 mln, from a net loss of RM6.4 mln a year ago, boosted by favourable forex fluctuation. Revenue for the quarter, however, slipped 11.0% Y.o.Y to RM406.7 mln, from RM457.3 mln in 2QFY16.

• Cumulative 1HFY17 net profit rose 64.0% to RM57.5 mln, from RM35.0 mln in 1HFY16, though revenue fell 17.0% to RM819.7 mln, from RM985.5 mln in the previous corresponding period. The group also declared a second interim dividend of 1.25 sen per share, with the entitlement and payment dates to be announced later. (The Edge Daily)

• Sarawak Plantation Bhd reported a 1Q2017 net profit of RM13.2 mln against a net loss of RM756,000 in the previous corresponding quarter, on the back of higher sales volume of crude palm oil (CPO) and palm kernel (PK). Revenue also jumped 77.0% Y.o.Y to RM109.6 mln, from RM62.1 mln a year ago. (The Edge Daily)

• Landmarks Bhd’s 1Q2017 net loss narrowed to RM3.4 mln, from RM6.6 mln last year, on improved performance from its hospitality, wellness and resort as well as destination development divisions. Quarterly revenue, meanwhile, gained 12.5% Y.o.Y to RM26.9 mln, from RM23.9 mln last year. (The Edge Daily)

• Century Logistics Holdings Bhd posted a 9.0% Y.o.Y hike in 1Q2017 net profit to RM4.9 mln, compared to RM4.5 mln a year ago, mainly attributed to higher contribution from its total logistics services segment, while revenue rose 2.0% Y.o.Y to RM71.0 mln, from RM69.5 mln a year earlier. (The Edge Daily)

• MHC Plantations Bhd returned to the black with a 1Q2017 net profit of RM4.7 mln, from a net loss of RM227,000 a year ago, contributed by a spike in overall prices of palm-oil related products. Revenue jumped 55.2% Y.o.Y to RM90.5 mln, against RM58.3 mln in 1Q2016.

• Further, the stronger bottom line was also attributed to a 30.0% growth in FFB production during the period and greater efficiency of its biomass power plant. (The Edge Daily)

• Tomypak Holdings Bhd saw its 1Q2017 net profit soared 78.3% Y.o.Y to RM6.3 mln, from RM3.5 mln a year ago, buoyed by higher local and overseas sales, improved production cost and lower foreign exchange losses. Accordingly, revenue was also 5.0% Y.o.Y higher at RM53.9 mln, from RM51.4 mln last year.

• Tomypak has declared a dividend of 2.0 sen per share, payable on 16th June 2017. (The Edge Daily)

• Silk Holdings Bhd plans to undertake a dividend reinvestment plan and purchase up to 10.0% of its issued share capital. Meanwhile, the proposed share buy-back will be funded by internal funds or external bank borrowings and the sum to be used will not exceed the company’s retained earnings. (The Star Online)  

Source: Mplus Research - 19 May 2017