• The FBM KLCI +0.4%) ended higher yesterday after lingering in the positive territory the entire day following the bullish sentiments spilled over from the U.S. stockmarkets after the Dow hit record highs. The lower liners – the FBM Small Cap (+0.1%), the FBM Fledgling (+0.3%) and the FBM Ace (+0.3%) also advanced. The industrial products (-0.2%) and the plantations sector, however, underperformed its peers.

• Market breadth was positive as advancers beat decliner on a ratio of 483- to-381 stocks. Traded volumes fell 5.1% to 1.95 bln shares as investors await for the outcome of the U.S. Federal Reserve’s meeting on interest rates.

• Genting-affiliated companies like Genting Malaysia (+22.0 sen) and Genting (+21.0 sen) buoyed the key market on Wednesday, followed by Astro (+15.0 sen), CIMB (+12.0 sen) and Hong Leong Bank (+12.0 sen). Meanwhile, top gainers on the broader market were Panasonic Manufacturing (+42.0 sen), Far East Holdings (+36.0 sen), Malaysian Pacific Industries (+30.0 sen), Khind (+27.0 sen) and Southern Acid Bhd (+25.0 sen).

• Broader market decliners were Aeon Credit Service (-28.0 sen), Fraser & Neave (-26.0 sen), Magni-Tech Industries (-16.0 sen), Perusahaan Sadur Timah (-14.0 sen) and UEM Edgenta (-12.0 sen). Meanwhile, Petronas Gas (-26.0 sen), Westports (- 10.0 sen), BAT (-6.0 sen), Maxis (-6.0 sen) and KLCC (-5.0 sen) weighed on the bluechip gauge.

• Asian stockmarkets were mostly in the red ahead of the conclusion of the U.S. Federal Reserve’s two-day meeting. Japanese stockmarket declined on the back of a stronger Yen and losses in materials-related counters, dragging the Nikkei (-0.1%) lower for the third-straight day. The Shanghai Composite also fell 0.7%, while the Hang Seng closed with minute gains after rebounding from intraday low. ASEAN indices finished mixed on Wednesday.

• U.S. stockmarkets ended mixed overnight, following a widely expected interest rate hike and balance sheet reduction plans by the Federal Reserve, amid scepticism that a full recovery in the U.S. economy is not yet in sight. The Dow (+0.2%) notched a fresh record high, spurred by gains in Home Depot (+1.8%) after the latter’s quarterly earnings topped analysts’ expectations. The Nasdaq, however, declined 0.4%, while the S&P 500 lost 0.1% - dragged down by energy stocks amid the persistent glut in U.S. crude oil inventories.

• Most European bourses retreated on Wednesday as investors adopt a waitand-see approach ahead of the U.S. interet rate decision. The FTSE (-0.4%) finished lower, weighed down by metalrelated companies like Anglo American (- 2.6%) and Glencore (-2.6%). The CAC (- 0.4%) also slipped into the red, although the DAX (+0.3%) ended higher after hitting a record high amid a stronger Euro.

The Day Ahead

• Following the confirmation of the Fed’s interest rate increase, we think market conditions on Bursa Malaysia will become muted as investors scour for new leads. As it is, the markets are staying toppish with fewer buying opportunities amid the still slow corporate earnings recovery prospects that are leaving stock valuations stretched.

• We think the FBM KLCI is likely to linger within the 1,790-1,795 levels over the near term as market participants play a waiting game. Traded volumes are also thinning and we continue to think that volumes will continue to be insipid over the near term amid the lack of fresh buying catalyst.

Company Briefs

• Astro Malaysia Holdings Bhd’s 1QFY18 net profit declined 3.1% Y.o.Y to RM195.8 mln, on the back of higher operating cost and an increase in net finance cost arising from lower unrealised forex gain. Revenue for the quarter dropped 2.7% Y.o.Y to RM1.32 bln. (The Star Online)

• Sunway Bhd, which plans to expand its healthcare sector, has allocated RM1.00 bln in capital expenditure to build five hospitals over the next five years. There will be two new hospitals at Sunway Penang and one each at Sunway Velocity, Sunway Damansara and Sunway Ipoh.

• The Sunway Velocity hospital is already under construction and is expected to be completed by end-2018, while the rest are awaiting approval from the Health Ministry. Sunway Medical Centre was recently awarded the runner-up title for Medical Tourism Hospital 2017 alongside Singapore’s Mount Elizabeth, one rank behind Bumrungrad Hospital of Thailand. (Bernama)

• Berjaya Food Bhd’s (BFood) 4QFY17 net loss stood at RM3.4 mln vs. a net profit of RM3.2 mln recorded in the previous corresponding quarter as it undertook an impairment exercise in the face of a slowing economy. Revenue for the quarter, however, grew 8.9% Y.o.Y to RM151.4 mln.

• For FY17, cumulative net profit sank 46.7% Y.o.Y to RM11.4 mln. Revenue for the year, however, grew 9.2% Y.o.Y to RM605.4 mln. A fourth interim dividend of one sen per share, payable on 28th July 2017, was declared. (The Edge Daily)

• Bison Consolidated Bhd’s 2QFY17 net profit added 55.0% Y.o.Y to RM6.2 mln, on intensive promotional activities as the company consistently varied its product offerings. Revenue for the quarter expanded 23.3% Y.o.Y to RM79.3 mln.

• For 1HFY17, cumulative net profit gained 28.6% Y.o.Y to RM12.6 mln. Revenue for the period grew 23.4% Y.o.Y to RM155.5 mln. A single-tier dividend of two sen per share was announced. (The Edge Daily)

• Poh Huat Resources Holdings Bhd's 2QFY17 net profit surged 273.2% Y.o.Y to RM10.6 mln, on higher furniture exports from its Vietnamese and Malaysian operations. Revenue for the quarter increased 19.9% Y.o.Y to RM127.7 mln.

• For 1HFY17, Poh Huat's cumulative net profit improved 57.0% Y.o.Y to RM28.3 mln. Revenue for the period climbed 13.0% Y.o.Y to RM291.1 mln.

• Separately, Poh Huat has redesignated its Managing Director, Tay Kim Huat as Group Chief Executive Officer (CEO), effective 14th June 2017. Tay is the cofounder of Poh Huat Industries Sdn Bhd, which is the main operating subsidiary of the group. (The Edge Daily)

• MISC Bhd has appointed Liza Mustapha as its Non-Independent Non-Executive Director effective 1st July 2017. Liza is currently Petroliam Nasional Bhd’s upstream business Chief Financial Officer. (The Edge Daily)

• Bumi Armada Bhd has inked a jointventure (JV) with two parties, Shapoorji Pallonji and Co Pvt Ltd (SPCL) and Cypress Energy Company Limited (CECL), to secure the award of a floating, production, storage and offloading (FPSO) project in Ghana.

• The JV company, known as Bumi Armada Shapoorji Pallonji Ghana Ltd (BASPG), was established that will see BAMHL, SPOG and CECL combining their capabilities and expertise, with each party holding 45.0%, 45.0% and 10.0% stakes respectively. (The Edge Daily)

• The Kuala Lumpur High Court has ruled in favour of marble and granite products maker Stone Master Corp Bhd's major shareholders, indicating that the Extraordinary General Meeting (EGM) held on 30th May 2017 was valid. The latest ruling, however, sees the immediate removal of Stone Master's Managing Director Datuk Koh Mui Tee and Executive Director Datuk Lee Hwa Cheng from the company's board of directors and the company.

• At the same time, it sees the appointment of eight new directors, namely Ma Jee Choong, Datuk Abdul Aziz Mohamed, Low Eng Tack, Ng Boon Siong, Tan Wee Hock, Ananda Kumar Ramayah, Foo Chooi Wai and Leong Kam Soon. (The Edge Daily)  

Source: Mplus Research - 15 Jun 2017