• Stocks on Bursa Malaysia started the week on a soft note as trading were lacklustre with little fresh impetus for investors to follow. This also resulted in little market support and the selling become more pronounced, particularly towards the end of the day that saw all Bursa Malaysia sub-indices closing in the red. Once again, the FBM ACE index emerged as the biggest loser, slipping another 1.9%, followed by the technology index (-1.8%).

• Market breadth stayed firmly on the negative side as losers routed gainers 688-to-224 stocks. Traded volumes also continue to thin with only 2.31 bln shares traded, nearly 20% lower than last Friday’s total trades.

• MPI (-40.0 sen), Bursa Malaysia (-36.0 sen), KESM (-30.0 sen) and ARK Resources (-18.0 sen) were among the biggest losers in the broad market. On the FBM KLCI, the main decliners were Petronas Chemicals (-15.0 sen), Genting (-21.0 sen), Petronas Gas (-36.0 sen) and Digi (-2.0 sen). Glovemakers were also sold down with Kossan (-17.0 sen), Hartalega (-13.0 sen) and Top Glove (-7.0 sen) all losing ground.

• Gaining stocks were led by Ajinomoto (+60.0 sen), Panasonic (+44.0 sen), Allianz (+36.0 sen) and Batu Kawan (+24.0 sen). Among the heavyweights, Axiata continues to gain ground, rising six sen for the day, followed by Genting Malaysia (+9.0 sen), YTL Corp (+1.0 sen) and Westports (+1.0 sen).

• Regional indices were generally lower with the Nikkei and most ASEAN indices closing in the red amid the lack of leads. The Nikkei fell marginally after a choppy session, while the Hang Seng ended on a positive note. China stockmarkets were closed for a public holiday. ? U.S. stockmarkets were closed for the Memorial Day holiday.

• The U.K. market was also closed for the Bank Holiday, while other European indices were little changed amid the lack of fresh leads. The CAC closed nearly unchanged, while German stocks ekedout minor gains.

The Day Ahead

• We see the dour conditions persisting on Bursa Malaysia as there remains a lack of fresh trading direction to steer the market over the near term. Already this is seeing many stocks, particularly among the lower liners, taking a hit amid the profit taking actions following their strong upsides over the past six months.

• With fresh buying largely absent, we expect the market to continue consolidating over the near term and the support has shifted to the 1,760 level after yesterday’s dip below the 1,770 level – which now serves as the immediate resistance below the major 1,780 resistance.

• While the index linked stocks may garner some institutional support, the broader market and lower liners could see more pronounced profit taking as trading catalysts fade and more retail players retreat to the sidelines.

Company Briefs

• Hong Leong Financial Group Bhd's (HLFG) 3QFY17 net profit increased by 33.0% Y.o.Y to RM418.8 mln, from RM315.1 last year, on the back of higher net interest, non-interest and Islamic banking income, while revenue climbed to RM1.23 bln vs. RM1.03 bln in the previous corresponding period.

• Cumulative 9MFY17 net profit, meanwhile grew to RM1.25 bln from, RM965.4 mln a year earlier, in-tandem with the higher revenue that climbed to RM3.76 bln, from RM3.34 bln in 9MFY16. The group has declared a dividend of 25.0 sen per share, which is payable on 23th June 2017. (The Star Online)

• Boustead Holdings Bhd's 1Q2017 net profit jumped more than three-fold to RM40.9 mln, from RM9.5 mln a year ago – led by higher contribution across all its segments, with its plantations division as the key contributor. Quarterly revenue also jumped 27.9% Y.o.Y to RM2.38 bln, from RM1.86 bln in 1Q2016.

• Subsequently, Boustead also declared a first interim dividend of 2.5 sen per share, payable on 23th June 2017. (The Star Online)

• Sunway Bhd posted a 5.7% Y.o.Y gain in its 1Q2017 net profit to RM107.9 mln, from RM102.1 mln a year ago, on higher contribution from all business segments, except property development. Revenue for the quarter also saw a 2.1% Y.o.Y gain to RM1.09 bln against RM1.07 bln in 1Q2016.

• The group noted that its property development segment reported a 38.8% Y.o.Y decline in revenue to RM143.3 mln, from RM234.1 mln in 1Q2016, mainly due to lower sales and progress billings from local development projects. (The Edge Daily)

• Genting Bhd‘s net profit surge 361.0% Y.o.Y to RM603.1 mln, compared to RM130.8 mln in 1Q2016, on a gain on disposal, while revenue for the quarter only grew a meager 1.0% Y.o.Y to RM4.77 bln, from RM4.71 bln. The aforementioned disposal worth RM302.2 mln was from the sale of Genting Singapore Plc’s 50.0% equity stake in associate, Landing Jeju Development Co Ltd. (The Star Online)

• Meanwhile, Genting Malaysia Bhd saw its 1Q2017 net profit more than doubled to RM323.5 mln, from RM161.6 mln in the previous corresponding quarter, mainly driven by lower forex losses on its U.S. dollar-denominated assets. Revenue, meanwhile, grew marginally 0.4% Y.o.Y to RM2.22 bln, from RM2.21 bln a year ago. (The Edge Daily)

• Ajinomoto (Malaysia) Bhd’s 4QFY17 net profit surged 22 times to RM149.0 mln, from RM6.6 mln a year earlier, boosted by stronger revenue, lower advertising expenses and higher other income. Meanwhile, revenue for the quarter rose 4.3% Y.o.Y to RM114.9 mln, from RM110.2 mln in 4QFY16.

• The group is also proposing a first and final dividend of 42.0 sen per share, together with a special one-off dividend of RM1.13 per share for FY17. (The Edge Daily)

• Sarawak Oil Palms Bhd's 1Q2017 net profit jumped 2.7 times to RM68.5 mln, from RM25.0 mln a year ago, contributed by higher fresh fruit bunch (FFB) production volume and favourable realised price. Quarterly revenue also gained 7.9% Y.o.Y to RM1.12 bln, compared to RM1.04 bln in 1Q2016.

• The group noted that palm oil product’s price rose to RM3,153 per tonne in 1Q2017 against from RM2,980 per tonne in 4QFY16, while palm kernel products fetched RM3,476 per tonne, from RM3,297 per tonne. (The Edge Daily)

• WCT Holdings Bhd's 1Q2017 net profit increased 3.7 times to RM33.1 mln, from RM8.8 mln in the same period last year, mainly due to stronger contribution from the local construction division and higher margins, despite a weaker revenue, which fell 2.4% Y.o.Y to RM473.4 mln, from RM485.0 mln previously. (The Edge Daily)

• QL Resources Bhd's 4QFY17 net profit climbed 24.0% Y.o.Y to RM47.24 mln, from RM38.1 mln in 4QFY16, backed by higher crude palm oil (CPO) price and a gain on disposal. Quarterly revenue, meanwhile added 6.0% Y.o.Y to RM813.7 mln, from RM770.2 mln. (The Edge Daily)

• Malaysian Resources Corp Bhd (MRCB) saw its 1Q2017 net profit more than double to RM10.5 mln, from RM4.4 mln last year, mainly attributed to higher contribution from its property development segment, while revenue expanded 20.4% Y.o.Y to RM524.9 mln, from RM436.0 mln in 1Q2016. (The Star Online)

• Iris Corp Bhd is planning a private placement exercise of up to 224.0 mln Iris shares (or 10.0% of issued share capital) to raise up to RM40.5 mln to finance its working capital requirements and future investment projects. The group, however, has yet to determine the nature of the new business projects or investments. (The Edge Daily)

• Lay Hong Bhd registered a 4QFY17 net profit of RM5.6 mln, from a net loss of RM12.6 mln in 4QFY16, boosted by higher revenue and the absence of the share-based expense, while quarterly revenue rose 6.4% Y.o.Y to RM173.6 mln, from RM163.2 mln in 4QFY16. (The Edge Daily)

• Cocoaland Holdings Bhd’s 1Q2017 net profit grew 14.2% Y.o.Y to RM9.0 mln, from RM7.9 mln, on higher margin, sales mix and forex gain, while revenue for the quarter rose slightly by 1.9% Y.o.Y to RM63.7 mln vs. RM62.5 mln in the previous corresponding period. (The Edge Daily)  

Source: Mplus Research - 30 May 2017