• In light of the weak performances across regional key indices, coupled with the weaker Ringgit against the U.S. Dollar, the FBM KLCI slipped 0.4% yesterday. The lower liners ended mostly lower as the FBM Fledgling and FBM ACE declined 0.4% and 0.2% respectively, while the broader market saw the Technology (+0.2%) and Consumer Products (+0.01%) sectors outperforming their peers.

• Market breadth stayed negative as decliners outstripped gainers on a ratio of 488-to-348 stocks. Traded volumes, however, added 7.6% with 1.90 bln shares exchanging hands.

• More than two-third the key index constituents fell, dragged down by Petronas Gas (-30.0 sen) followed by BAT (-20.0 sen), Petronas Dagangan (-16.0 sen), Petronas Chemicals (-16.0 sen) and Hap Seng (-15.0 sen). Amongst the biggest decliners on the broader market include Amway (-20.0 sen), Oriental Interest (-17.0 sen), Apex Healthcare (- 14.0 sen) and Aluminum Company of Malaysia (-11.0 sen). Kumpulan Jetson tanked 8.5 sen after a RM919.3 mln construction job secured last week was rescinded.

• In contrast, key winders on the broader market were Petron (+30.0 sen), MagniTech Industries (+25.0 sen), Malaysia Airport Holdings (+17.0 sen), APM Automotive (+15.0 sen) and United-Uli Corporation (+15.0 sen). There were only three advancers on the big board – Hong Leong Bank (+8.0 sen), Telekom (+3.0 sen) and Maybank (+1.0 sen).

• Asia benchmark indices were under pressured yesterday after North Korea test-launched a ballistic missile that landed in Japan’s Exclusive Economic Zone. The Nikkei fell 0.1% while the Shanghai Composite (-0.4%) halted a streak of three consecutive winning days. The Hang Seng Index tanked 1.5% on selloff in technology stocks. ASEAN stockmarkets, meanwhile, ended mostly lower.

• Wall Street was closed for the Independence Day public holiday. Earlier, European benchmark indices – the FTSE (-0.3%), CAC (-0.4%) and DAX (-0.3%), all retreated from the previous sessions’ biggest rally in two months. The weakness was also attributed to the geopolitical concern over North Korea’s nuclear weapon ambitions.

The Day Ahead

• Geopolitical concerns resulting from North Korea’s test missile launch could continue to weigh on global equity sentiments and will also permeate to Bursa Malaysia. This is likely to prolong the downside spell and we expect the FBM KLCI to also dip further, potentially to the 1,760 and 1,755 levels amid the lack of fresh buying catalysts and lingering wariness.

• The lower liners and broader market shares are not expected to fare any better with the insipid market environment, leaving most market players on the sidelines until sentiments improve. Consequently, market breadth and depth are likely to remain on the thin side over the near term.

COMPANY BRIEF

• Sinmah Capital Bhd is disposing four pieces of land, together with 22 broiler farms, a chicken processing plant and a two-storey shophouse, in Batu Pahat, Johor, totalling RM12.3 mln cash, as part of its plans to dispose of certain assets which is no longer necessary to its poultry division operations.

• The group expects a total pretax profit from the disposal to amount to RM8.1 mln, which will be used to strengthen the group's cash flow and pare its gearing. The proposed disposals are expected to be completed by 4Q2017. (The Edge Daily)

• Aeon Credit Service (M) Bhd's 1QFY18 net profit surged 20.9% Y.o.Y to RM75.8 mln, from RM62.7 mln 1QFY17, lifted by bad debt recovery and commission earned from sale of insurance products, and AEON Big loyalty programme processing fees. Revenue for the quarter meanwhile, rose 15.5% Y.o.Y to RM302.3 mln vs. RM261.6 mln in the same period year ago.

• Moving forward, Aeon Credit expects to continue with its current financial performance in FY18, based on the scheduled implementation of its business plan. (The Edge Daily)

• UEM Edgenta Bhd has secured a two-year hospital support services contract from the Ministry of Health, valued at RM75.5 mln. The group will provide the hospital support service at the National Cancer Institute in Putrajaya from 1st September 2017 until 31st August, 2019.

• The work scope include facility engineering maintenance services, biomedical engineering maintenance services, cleansing services, healthcare waste management services, linen and laundry services as well as facility management services. (The Edge Daily)

• Kawan Food Bhd is proposing a bonus issue of 89.9 mln new shares on the basis of one bonus share–for-every three existing shares. Subsequently, the group’s issued and paid-up capital will expand by a third to 359.52 mln shares, from 269.64 mln shares previously. (The Edge Daily)

• Fraser & Neave Holdings Bhd (F&N) is partnering McDonald's Malaysia to market 100Plus products at all of McDonald's outlets from the 4th of July this year.

• The partnership has been two years in the making and follows a four-month trial at 10 McDonald's outlets in major towns. 100Plus will be the first F&N product to be served at a quick-service restaurant network in Malaysia, the group said. (The Edge Daily)

• Kumpulan Jetson Bhd said MCC Overseas (M) Sdn Bhd has rescinded contract worth RM919.3 mln from its wholly-owned subsidiary Jetson Construction Sdn Bhd (JCSB) on alleged misrepresentation or non-disclosure of a certain matter.

• JCSB has received the letter from MCC on 3th July 2017 terminating the contract to the former to undertake subcontract works for a mixed commercial project in Jalan Conlay, mainly due to an alleged misrepresentation or non-disclosure that one of the substantial shareholders of Jetson is a director of a third party consultant to the employer of the project.

• Subsequently, Jetson has denied any misrepresentation or non-disclosure or wrongdoing which will rise to such rescission and said that it was not given the opportunity to respond prior to the purported unilateral rescission. The group is currently seeking legal advice on this matter and will take appropriate action in due course. (The Star Online)

• Majuperak Holdings Bhd said that it is unaware of any corporate development or rumour that has led to the sharp rise in its share price yesterday.

• This comes after the group was issued an Unusual Market Activity (UMA) query by Bursa Malaysia after its share price surged by as much as 17.5% to 60.5 sen and some 19.5 mln shares exchanged hands, equivalent to 7.6% of the group's share capital.

• Majuperak has suspended the trading of its shares in afternoon yesterday at and will resume normal trading today. (The Star Online)  

Source: Mplus Research - 5 Jul 2017