• The FBM KLCI (+0.01%) managed to end the day on a positive note after erasing most of its intraday gains yesterday, taking cue from the positive developments on Wall Street overnight. The lower liners – the FBM Small Cap (+0.6%), FBM Fledgling (+0.7%) and FBM ACE (+1.7%) all advanced, while the Finance (-0.2%) and Mining (-0.8%) sectors underperformed the positive broader market.

• Market breadth turned positive as gainers outnumbered decliners on a ratio of 481- to-369. Despite that, traded volumes were flat with 1.40 bln shares exchanging hand.

• PPB Group (+14.0 sen) topped the big board gainers’ list, followed by MISC (+11.0 sen), IJM (+8.0 sen), IOI Corporation (+5.0 sen) and Astro (+4.0 sen). Magni-Tech Industries surged 61.0 sen after reporting a strong set of corporate earnings, while other notable gainers on the broader market were KESM Industries (+52.0 sen), Chin Teck Plantations (+50.0 sen, SAM Engineering and Equipment (+30.0 sen) and Ajinomoto (+24.0 sen).

• In contrast, major decliners on the broader market include Fraser & Neave (- 68.0 sen), Malaysia Airport Holdings (- 20.0 sen), Panasonic (-16.0 sen), Time dotCom (-14.0 sen) and United Plantations (-10.0 sen). Meanwhile, Hong Leong Bank (-30.0 sen), BAT (-20.0 sen), Hong Leong Financial Group (-6.0 sen), Hap Seng (-5.0 sen) and Sime Darby (-4.0 sen) were among the biggest decliners on the key index.

• Following the positive momentum on Wall Street overnight, Asian benchmark indices advanced. The Nikkei added 0.5%, led by gains in technology shares. The Hang Seng Index jumped 1.1% to close a hair’s away from the 26,000 psychological level, while the Shanghai Composite closed 0.5% higher. ASEAN stockmarkets, meanwhile, ended on a positive note.

• Renewed volatility in technology stocks offset gains in financial shares to send U.S stockmarkets lower and to erase all of their previous session’s gains as well as enduring their worst session in a month, sending the Dow 0.8% lower. On the broader market, the S&P 500 fell 0.9% on weakness in technology sector (- 1.8%), while the Nasdaq tanked 1.4%.

• Earlier, European benchmark indices traded in a similar manner - the FTSE (- 0.5%), CAC (-1.9%) and DAX (-1.8%), all ended in the red after the Euro currency rallied against the Greenback. Nevertheless, bucking the negative sentiment include banking stocks like HSBC Holdings Plc (+4.2%), Barclays Plc (+1.0%) and Deutsche Bank AG (+0.6%).

The Day Ahead

• Yesterday’s rebound was much weaker than expected amid the lack of buying interest and bargain hunting activities remaining lackluster and the unconvincing rebound is casting doubt over its near term direction. The weak global stockmarket performance overnight could again aggravate its rebound efforts as the selling pressure on Bursa Malaysia stocks is likely to return.

• Hence, the FBM KLCI is likely to head lower over the near term with the 1,770 level support unlikely to hold and the next supports at 1,766 and 1,760 levels coming into play.

• We also see market interest, as measured by traded volumes, likely to stay on the thin side as most market participants are likely to stay on the sidelines awaiting for a clearer market direction.

COMPANY BRIEF

• Poh Kong Holdings Bhd reported a 22.0% Y.o.Y increase in its 3QFY17 net profit to RM7.4 mln, from RM6.1 mln in the previous corresponding period, on the back of better gold prices and contribution from new outlets, while revenue rose marginally by 1.0% Y.o.Y to RM205.2 mln, from RM202.5 mln in the previous corresponding period.
   
• Meanwhile, cumulative 9MFY17 net profit jumped 86.0% Y.o.Y to RM15.2 mln vs. RM8.2 mln a year ago, while revenue expanded 7.0% Y.o.Y to RM617.0 mln, from RM578.2 mln. (The Edge Daily)

• Hiap Teck Venture Bhd’s 3QFY17 net profit jumped three-fold to RM31.9 mln in comparison to RM10.6 mln a year ago, mainly due to improved margins, alongside revenue which increased 4.0% Y.o.Y to RM297.1 mln, from RM285.1 mln in the same period last year.

• The group also made a turnaround with a cumulative 9MFY17 net profit of RM34.9 mln, from a net loss of RM49.4 mln a year ago, although revenue dipped 4.0% Y.o.Y to RM845.4 mln, from RM877.5 mln. (The Edge Daily)

• Kim Loong Resources Bhd's 1QFY18 net profit almost doubled to RM24.3 mln, from RM12.4 mln a year earlier – due to higher contribution from its plantation operations. Revenue also surged 44.0% Y.o.Y to RM255.7 mln, from RM177.7 mln in 1QFY17.

• The group's plantation segment saw its revenue jump 97.0% during the quarter, while profit shot up 295.0% to RM34.3 mln due to increased fresh fruit bunches (FFB) production and prices, mostly attributed from its Keningau estates in Sabah. (The Edge Daily)

• Sime Darby Bhd is selling the New Lunderston Estate, a freehold tract measuring 297.5 acres, in Selangor for RM85.5 mln cash to PNB Development Sdn Bhd, a wholly-owned unit of Permodalan Nasional Bhd.

• The sales proceeds will be used to fund strategic development projects by Sime Darby Property Bhd within the next 12 to 24 months and also to pay for expenses in relation to the proposed disposal. (The Edge Daily)

• Berjaya Corp Bhd (BCorp) posted a 4QFY17 net profit of RM3.2 mln against a net loss of RM368.9 mln a year ago that resulted from a goodwill impairment and assets held for sale relating to Berjaya (China) Great Mall Co Ltd of RM131.8 mln in 4QFY16. Revenue for the quarter, however, was 10.0% Y.o.Y lower at RM2.23 bln, from RM2.48 bln a year ago.

• Full-year net profit stood at RM140.0 mln vs. a net loss of RM177.2 mln from the year before, mainly due to better performance of its property investment and development segment, although slightly offset by decreased profits from its gaming operations. (The Edge Daily)

• Tasco Bhd expects its investments in the cold chain logistics segment to boost its 2017 revenue by an additional RM100.0 mln to around RM700.0 mln, following the acquisition of Gold Cold Transport (GCT) and Westport land.

• Tasco is paying RM186.1 mln in cash and RM113.8 mln for the acquisition GCT and the 39.5 ac. of land in Pulau Indah respectively. (The Star Online)

• AEON Co (M) Bhd is selling its two- storey AEON Mahkota Cheras Shopping Centre built for RM87.8 mln to Foremost Wealth Management Sdn Bhd, as part of its corporate strategy of focusing and developing its future retail business.

• Following the completion of the disposal AEON expects to book a gain of RM17.0 mln after adjusting for expenses and taxes for FY17. Subsequently, the cash proceeds are intended to be used as working capital and to reduce borrowings. (The Star Online)

• Vivocom International Holdings Bhd is planning to place new shares to third party investors to raise money for working capital and bank borrowings repayment.

• The group expects to raise between RM35.58 mln and RM47.87 mln from the placement of shares to parties to be identified later. (The Edge Daily)

• Hai-O Enterprise Bhd posted a 63.0% rise in 4QFY17 earnings to RM18.25 mln compared with RM11.18 mln a year earlier, while revenue grew 34% to RM118.37 mln from RM88.15 mln as both its wholesale and multi-level marketing divisions performed better.

• The group proposed a final single tier dividend of 11.0 sen per share for FY17, which brings its total payout for the year to 16.0 sen, a sen higher than FY16.

• Tiger Synergy Bhd has inked a Memorandum of Agreement (MoU) with Prosma Bhd, a holding company for the assets of Sekretariat Komuniti Prefer Malaysia (SKPM), to develop a RM100.0 mln affordable condominium in Gombak.

•  The Telaris Gombak will be developedover a period of three years under the Rent-to-Own scheme spearheaded by Prosma, comprising 180 residential units and eight commercial units at an estimated price of RM500,000 per unit.

• The scheme will also see the properties rented to the proprietor for 30 years. The project is expected to contribute RM30.0 mln to Tiger Synergy's bottom line over the next three years. (The Edge Daily)

• TSR Capital Bhd is planning to sell its office tower in Mutiara Damansara, Petaling Jaya, known as Menara TSR, and would use the gains from the disposal for future property development projects.

• The two-year old property, which comes with 16 floors, is 94.0% occupied, mostly by international firms and is valued at about RM170.0 mln. (The Edge Daily)

• Kumpulan Jetson Bhd (KJB) has clinched a RM919.3 mln subcontract job from MCC Overseas (M) Sdn Bhd to undertake main building works for a mixed commercial project on Jalan Conlay. The cost consists of two parts: building works, which costs RM336.7 mln, and RM582.7 mln as prime cost and provisional sum. (The Star Online)

• Reach Energy Bhd intends to ramp up oil production in its 60.0%-owned Kazakhstan oil field by up to 51.0% to 5,000 barrels of oil per day (BOPD), from 3,301 BOPD as at end-2016. The group also plans to increase production to between 4,000 BOPD and 5,000 BOPD by the end of 2017.

• To recap, Reach Energy completed the acquisition of 60.0% equity interest in Palaeontol BV and 60.0% of the company's shareholders' loan at an adjusted purchase consideration of US$175.9 mln last November, fulfilling the requirements of a special purpose acquisition company to acquire a qualifying asset within a 36-month period. (The Star Online)  

Source: Mplus Research - 30 Jun 2017