• The FBM KLCI traded in a lackluster manner before extending its gains to close 0.1% higher yesterday, lifted by last minute gains on selective index heavyweights. The lower liners – the FBM Small Cap (-0.2%), FBM Fledgling (-0.3%) and FBM ACE (-0.3%), however, all gave up their intraday gains to finish on a negative note, while the Trading/Services (+0.04%) and Plantations (+0.8%) sectors outperformed the negative broader market.

• Market breadth turned negative as losers outnumbered gainers on a ratio of 511-to- 359 stocks. Traded volumes, however, added 4.5% to 1.55 bln shares, but were well below the 100-day daily average of 3.0 bln shares.

• IOI Corporation (+15.0 sen) topped the broader market advancers list, followed by Genting Malaysia (+10.0 sen), CIMB (+9.0 sen), Petronas Chemicals (+4.0 sen) and Axiata (+3.0 sen). Amongst the biggest gainers of the day in the broader market include KESM Industries (+68.0 sen), Bursa (+32.0 sen), Allianz (+30.0 sen), SAM Engineering & Equipment (+19.0 sen) and Hong Leong Industries (+12.0 sen).

• Hartalega (-33.0 sen) retreated for the third straight session, while other notable decliners on the broader market include Versatile Creative (-12.0 sen), Vitrox (- 12.0 sen), Globetronics (-11.0 sen) and Aeon Credit (-10.0 sen). Key losers on the big board were Hong Leong Bank (-30.0 sen), BAT (-12.0 sen), AmBank (-12.0 sen), Hap Seng (-11.0 sen) and Hong Leong Financial Group (-8.0 sen).

• Asia benchmark indices ended mostly lower yesterday as the Nikkei fell 0.4% to close at three-week low on concern over geopolitical tension with North Korea. The Hang Seng Index lost 0.2% on weakness in financial shares, but the Shanghai Composite added 0.2% buoyed by gains in insurer firms. ASEAN stockmarkets, meanwhile, ended mixed.

• Despite a stronger-than-expected ISM manufacturing data of 57.4 in June, U.S. stockmarkets endured their worst session since May 2017 as the Dow ended 0.7% lower on growing geopolitical concerns, coupled with signs of central banks inching towards unwinding the accommodative policies. On the broader market, the S&P 500 slipped 0.9% on weakness in telecommunication and real estate shares, while the Nasdaq sank 1.0%.

• Earlier, European benchmark indices - the FTSE (-0.4%), CAC (-0.5%) and DAX (- 0.6%), all retreated after the release of minutes meeting from the European Central Bank that suggested an end of era for ultra-loose monetary policy. Nevertheless, banking stocks - Commerzbank AG (+1.4%), UniCredit SpA (+2.9%) and Societe Generale SA (+1.7%) gained traction.

The Day Ahead

• Despite yesterday’s feeble rebound, there remains no change to our immediate market view and we continue to think that the wariness is still prevalent that will not only keep a lid on the market’s near term uptrend, but also renewed the downside pressure amid the increasingly cautious global market environment as Central Banks mull the unwinding of their long standing stimulus measures.

• Consequently, we think that profit taking activities could escalated ahead of the weekend as more market players retreat to the sidelines and this could result in the FBM KLCI veering back to the 1,765 and 1,760 supports. In line with the weaker market environment, we also expect market breadth and depth to remain thin as there are few positive leads to sustain the market interest for the time being.

COMPANY BRIEF

• Hibiscus Petroleum Bhd, who proposed a private placement of up to 10.0% of its share capital in May to raise about RM65.0 mln, is assessing alternative fundraising avenue from financial institutions to be implemented in the future.

• The proposed private placement is an additional effort by the group to maintain a satisfactory buffer over and above the group's recurring cash flows and satisfy near-term payments and obligations, while the alternative sources of funding are being reviewed.

• The above plans are part of the group’s efforts to meet the requirements of its proposed placement. (The Edge Daily)

• AT Systematization Bhd has proposed a share consolidation exercise where three existing shares will be consolidated into one new share, which will reduce the fluctuation of its market capitalisation. The corporate exercise will also theoretically triple its share price, which may raise its profile among investors and lead to more attention and interest in its shares. (The Edge Daily)

• Dagang NeXchange Bhd (DNeX) has been awarded a project worth between RM50.0 mln and RM75.0 mln to supply up to 100 portable container systems (PCS) for petroleum products. The PCS is a selfcontained modular fuel storage and dispensing unit which will be used for the supply of petrol at fish landing jetties in Malaysia.
   
• The contract was awarded by Petro Teguh Sdn Bhd to its wholly-owned unit OGPC Sdn Bhd.

• It was noted that a PCS station with single storage is priced at RM500,000 per site/unit (psu), while the contract price for a PCS station with double storage is priced at RM750,000 psu. (The Edge Daily)

• Yinson Holdings Bhd is considering setting a dividend policy, following two substantial one-off gains amounting to US$337.0 mln (RM1.45 bln) from an equity sale and an early contract termination.

• The group is also expected to fund its future projects with the proceeds, while its current orderbook stood at US$3.7 bln (RM15.91 bln), excluding its latest joint-venture (JV) for the US$1.0 bln Ca Rong Do (CRD) floating production, storage and offloading facility in Vietnam. (The Edge Daily)

• Tenaga Nasional Bhd is proposing to raise up to RM5.0 bln via a Sukuk issue with a tenure of up to 50 years to fund its capital expenditure, investment and related corporate purposes.

• Additionally, the sukuk has been assigned with a long term final rating of AAA, the highest rating grade by RAM Rating Services Bhd. (The Edge Daily)

• Scomi Engineering Bhd is taking legal action against government-owned Prasarana Malaysia Bhd again in a bid to stop the latter from appointing a new party to supply the remainder six trains needed to complete the upgrade works under the Kuala Lumpur Monorail Fleet Expansion Project.

• The group filed the court action on 3th July 2017, after Prasarana said that the third supplemental contract (TSC) inked between the two parties in March is now null and void, after claiming the last condition in the TSC was not met. (The Star Online)  

Source: Mplus Research - 7 Jul 2017