• Although the FBM KLCI extended its gains to close 0.1% higher last Friday, the key index halted its streak of four consecutive weekly gains to close 0.7% W.o.W lower. The lower liners – FBM Small Cap, FBM Fledgling and FBM ACE all added 0.6% each, while the Technology (+0.7%), Trading/Services (+0.4%) and Industrial Products (+0.2%) sectors outperformed in the broader market.

• Market breadth remained positive with winners pipping losers on a ratio of 438- to-321. Traded volumes, however, sank 20.3% to 1.31 bln shares on the eve of the extended Hari Raya Aidilfitri break.

• Key winners on the big board were Genting Malaysia (+27.0 sen), Hong Leong Bank (+14.0 sen), Maxis (+5.0 sen), Petronas Dagangan (+4.0 sen) and CIMB (+3.0 sen). Notable advancers on the broader market include Ajinomoto (+RM1.12), Panasonic (+88.0 sen), PMB Technology (+28.0 sen) and Nestle (+26.0 sen). George Kent added 25.0 sen after reporting a strong set of quarterly earnings.

• Significant decliners on the broader market were Heineken (-50.0 sen), Dutch Lady (-46.0 sen), HCK Capital (-30.0 sen) and Chin Teck Plantations (-24.0 sen). Comintel Corporation sank 15.0 sen after reporting a weak set of quarterly results. Meanwhile, BAT (-48.0 sen), Hong Leong Financial Group (-16.0 sen), AmBank (- 12.0 sen), Hap Seng (-9.0 sen) and KLK (- 6.0 sen) led the big board decliners list.

• Japanese equities extended their losses for the second-straight day, on the back of the weakness in export-related stocks as the Yen firmed up against the Greenback. Both the Nikkei and the Hang Seng index edged lower by 0.1%, while the Shanghai Composite index (-0.3%) slipped into the red, weighed down by losses in information technology (-1.7%) and materials (-1.6%) companies. ASEAN stockmarkets also continued to trade on a downward bias.

• Wall Street endured its worst session in over a month period as the Dow fell slipped 0.5% after the U.S. Senate delayed the healthcare plan to replace Obamacare, whilst U.S. Federal Reserve Chairwoman Janet Yellen signalled another rate hike in 2017, despite economic data falling short of estimates. On the broader market, the S&P 500 fell 08%, while the Nasdaq tanked 1.6%.

• Earlier, European equities - the FTSE (- 0.2%), CAC (-0.7%) and DAC (-0.8%) all ended lower after trading in the negative territory throughout the trading session. The weakness stemmed by the surge in the Euro currency against the Greenback after the European Central Bank President, Mario Draghi hinted potential additional stimulus to drive the region’s growth.

The Day Ahead

• After the rebound ahead of the Hari Raya break last week, the market’s weakness may re-appear following the downtrend of global stockmarkets during the break. As it is, there continues to be few trading impetus, both from domestic and overseas sources, to entice investors’ interest. In addition, many market players are still on an extended break and we see traded volumes remaining on the thin side.

• Under the prevailing environment, we think the key index will continue to find the 1,780 points level a significant resistance level to clear with a more likely scenario of a pullback over the near term. This could see the 1,770 serving as the near term support level.

COMPANY BRIEF

• Gamuda Bhd's 3QFY17 net profit rose 11.0% Y.o.Y to RM170.9 mln, from RM152.7 mln a year earlier, underpinned by higher progress billings on the MRT2 project, while quarterly revenue surged 79.0% Y.o.Y to RM839.5 mln vs. RM467.3 mln. Subsequently, the group has also declared a second interim dividend of six sen per share. (The Star Online)

• Apollo Food Holdings Bhd posted a 57.8% Y.o.Y increase in its 4QFY17 net profit to RM2.7 mln, from RM1.7 mln in 4QFY16, on the back of a stronger revenue contribution that rose 12.1% Y.o.Y to RM59.6 mln, from RM53.1 mln,. The stronger revenue is due to higher demand from both local and export markets.

• The group has proposed a first and final dividend of 25.0 sen a share for FY17, payable on 9th January, 2018. (The Edge Daily)

• Felda Global Ventures Holdings Bhd (FGV) has given suspended President and CEO, Datuk Zakaria Arshad until noon on 29th June 2017 to respond to its showcause letter concerning alleged improprieties at one of its subsidiaries. (The Star Online)

• Bina Darulaman Bhd (BDB) is issuing a RM50.0 mln Sukuk, the first tranche of its seven-year, RM100.0 mln Sukuk Wakalah programme. The group expects to use the proceeds for its general corporate purposes including infrastructure development, potential land bank acquisitions and working capital requirements of existing and future projects. (The Star Online)

• Independent adviser, Mercury Securities Sdn Bhd said that the takeover offer for Wing Tai Malaysia Bhd at RM1.80 per share is "not fair but reasonable". Subsequently, the former recommended that the shareholders accept the offer. (The Edge Daily)

• Perisai Petroleum Teknologi Bhd's 51.0%-owned subsidiary, Perisai Offshore Sdn Bhd has secured a supplementary contract, extending the contract for another 20 months to provide the service of its jack-up drilling rig PP101 to Petronas Carigali Sdn Bhd.

• The original three-year contract for the provision of the rig's service to Petronas Carigali was secured on 8th May 2014. (The Edge Daily)

• Microlink Solutions Bhd has clinched a government contract worth RM38.0 mln for the implementation of a loan management system. The contract will consist of 16-months of implementation, followed by three years' maintenance and support to the Public Sector Home Financing Board. (The Edge Daily)

• Global Oriental Bhd is partnering Malton Bhd to develop a 38.3 ac. land in Cheras, Kuala Lumpur. The seven plots of freehold land are to be developed as a mixed development at the absolute discretion of Global Oriental, while Malton is entitled to 18.0% of the net development value of the project, which shall not be less than RM65.0 mln.

• The project is expected to be completed over a five-year period and can be extended for a further two years subject to market supply and demand conditions. (The Edge Daily)

• MCE Holdings Bhd has been awarded contracts worth RM60.0 mln to supply various electronic and mechatronic components and parts for a new Perodua model. The six-year contracts are expected to commence in the 1QFY18, with an estimated total investment cost of RM1.0 mln. (The Edge Daily)

• Berjaya Land Bhd reported a 4QFY17 net profit of RM88.6 mln, compared with a net loss of RM458.6 mln a year ago, on the back of significantly lower investment-related expenses. (The Star Online)

• Vivocom International Holdings Bhd‘s Group CEO, Datuk Seri Dr Yeoh Seong Mok is retiring from his position with immediate effect after acting as the Group’s CEO since November 2015. (The Edge Daily)

• Carimin Petroleum Bhd has secured a two-year contract by Urban Masterpiece Sdn Bhd to be the exclusive subcontractor for a RM60.0 mln civil engineering job related to a flood mitigation project on Jalan Temerloh, Taman Tasik Titiwangsa. (The Edge Daily)  

Source: Mplus Research - 28 Jun 2017