• The eleventh hour buying interest on selective banking heavyweights sent the FBM KLCI 0.4% higher yesterday. The said gains were also in tandem with the positive sentiment across key regional indices. The lower liners – the FBM Small Cap (+0.1%), FBM Fledgling (+0.5%) and FBM ACE (+0.6%) all advanced, while Industrial Products and Plantation index underperformed their peers, falling 0.1% each.

• Market breadth turned positive as gainers overcame losers on a ratio of 422-to-389 stocks. Traded volumes, however, fell 21.5% to 1.49 bln shares amid the lack of fresh local catalyst.

• Topping the advancers list on the big board was Hong Leong Bank (+56.0 sen), followed by Hong Leong Financial Group (+16.0 sen), AmBank (+11.0 sen), IHH (+11.0 sen) and Petronas Gas (+10.0 sen). Notable gainers on the broader market include Allianz (+50.0 sen), Panasonic (+22.0 sen), Apex Healthcare (+16.0 sen) and Warisan (+16.0 sen). Aeon Credit added 32.0 sen after reported a strong set of quarterly results.

• Amongst the biggest decliners on the broader market include Magni-tech Industries (-17.0 sen), while Bursa Hartalega, Southern Acids and Turbo all fell 10.0 sen each. Meanwhile, key losers on the big board were BAT (-28.0 sen), Petronas Dagangan (-6.0 sen), KLK (-4.0 sen), Petronas Chemicals (-3.0 sen) and Telekom (-2.0 sen).

• Asia benchmark indices recovered from their intraday losses as the Nikkei (+0.3) recovered from three-week low after the Japanese Yen weakened against the Greenback. The Shanghai Composite (+0.8%) closed above the 3,200 psychological level after the Cabinet promotes the usage of commercial pension fund into capital markets, while the Hang Seng Index climbed 0.5%. ASEAN stockmarkets, meanwhile, ended mostly higher.

• Wall Street ended on a mixed note overnight as the Dow fell 0.01%, after the U.S. Federal Reserve released its minutes from its June meeting –implying no change in their direction to normalise interest rate, hence potentially another rate hike by year end. On the broader market, the S&P 500 gained 0.2% led by the rebound in technology sector (+1.0%), while the Nasdaq closed 0.7% higher.

• Earlier, benchmark equities - the FTSE, CAC and DAX, all rose 0.1% each as gains were capped by concern over geopolitical tension at North Korea. Gains were also capped by the decline in crude oil prices after OPEC’s production rose in June, signalling uncertainty on the re-balancing of global oil supply.

The Day Ahead

• Yesterday’s quick turnaround has nullified some of the near-term market weakness but despite the rebound, we continue to think that the wariness remains due to the lack of sustainable catalysts and leads. At the same time, the gains have also been piecemeal with the broader market undertone still largely mixed-to-lower.

• Therefore, we continue to think that the market is still in a state of flux and is likely to stay directionless over the near term. This is likely to see the key index drifting within the 1,760 and 1,780 levels and trading interest on many stocks, particularly among the lower liners, will also remain on the low side with most market players staying on the sidelines to re-assess the market environment before returning.

COMPANY BRIEF

• Spring Gallery Bhd has announced that a contract worth RM176.0 mln to provide professional project management facilities for the development of a 6.0-ac. piece of land in Perling, Johor has been rescinded by Prinsip Nusantara Sdn Bhd.

• The revocation was mainly due to a possible delay in the construction work, which resulted in the deferment of Spring Gallery’s management period over duration of the managing contractor agreement. (The Edge Daily)

• PRG Holdings Bhd has signed a Memorandum of Understanding (MoU) with Singapore-listed oil and gas firm, Mirach Energy Ltd, to jointly undertake property and construction projects in Malaysia and elsewhere. (The Edge Daily)

• Petronas Dagangan Bhd (PetDag) is planning to dispose its liquefied petroleum gas business in the Philippines to Phoenix Petroleum Philippines Inc. for US$124.0 mln (RM532.5 mln) by 3Q2017.

• The group has inked two share purchase agreements with Phoenix Petroleum, for the sale of Petronas Energy Philippines Inc (PEPI) and its 40.0%-owned affiliate Duta Inc for a combined US$126.1 mln, subject to adjustment at completion.

• PEPI is responsible for LPG marketing in the Philippines, while Duta is a landholding company jointly-owned with local partners. (The Star Online)

• Iskandar Waterfront City Bhd (IWCity) and Iskandar Waterfront Holdings Sdn Bhd (IWH) has extended the deadline to conclude their planned restructuring to 4th September 2017, citing that IWH needed more time to finalise the corporate exercise. The additional time will enable IWCity's major shareholder IWH to negotiate in good faith and execute the definitive sale and purchase agreements (SPA) with the relevant vendors under the restructuring. (The Star Online)

• Warisan TC Holdings Bhd is partnering Agile Quick Services Sdn Bhd (AQS) to jointly offer travel products and services to customers through an ecommerce platform. The joint-venture (JV) agreement inked by both parties also involves the managing of online business of sales of travel products and services for Warisan. (The Edge Daily)

• A consortium, which comprised of Damansara Realty Bhd, ACME Security Sdn Bhd and AHS Security Sdn Bhd has secured a 21-month contract to provide security management services to Petronas's Refinery and Petrochemical Integrated Development (RAPID) project in Pengerang, Johor for RM26.2 mln.

• The contract also comes with optional services worth RM9.8 mln and is expected to contribute positively to Damansara Realty's 2017 earnings. (The Edge Daily)

• ECS ICT Bhd will be distributing a new product — a new mini camera drone called The Spark, the first pocket camera drone that users can control using hand gestures alone.

• The new mini drone was developed by China-based Da-Jiang Innovations Science and Technology Co Ltd (DJI) and will improve the group’s 2H2017 financial results. (The Edge Daily)

• GFM Services Bhd is planning to transfer its listing to the Main Market of Bursa Malaysia in 2H2017. The group has met the historical profit track record and other relevant requirements for the transfer. (The Star Online)

• Rev Asia Bhd's proposal to dispose of its entire 70.0% stake in Rev Asia Holdings Sdn Bhd for RM73.5 mln is fair and reasonable, according to independent adviser TA Securities Holdings Bhd.

• Consequently, the latter has recommended that the minority shareholders of Rev Asia permit the sale — marking the Rev Asia’s exit from the advertising and social media business — to Media Prima Bhd. (The Edge Daily)  

Source: Mplus Research - 6 Jul 2017