• Following the upward revision of Malaysia GDP forecast in 2017 to 4.8% (from 4.5%) by the International Monetary Fund (IMF), the FBM KLCI (+0.1%) advanced for the third straight session after it pared off most of its intraday gains yesterday. The lower liners – the FBM Small Cap (-0.3%), FBM Fledgling (-0.5%) and FBM ACE (- 1.9%), however, all ended extended their losses, while the broader market ended mixed.

• Market breadth stayed negative as advancers outpaced decliners on a ratio of 510-to-329. Traded volumes dwindled another 10.0% to 1.68 bln shares as profit taking activities continue to dominate the market sentiments.

• Key winners on the big board were Petronas Dagangan (+14.0 sen), Genting Malaysia (+8.0 sen), Genting (+8.0 sen), Petronas Gas (+80 sen) and MISC (+6.0 sen). Significant advancers on the broader market were SAM Engineering & Equipment (+34.0 sen), Cepco (+30.0 sen), Pentamaster (+29.0 sen), Heng Yuan (+24.0 sen) and Vitrox (+17.0 sen).

• On the other side of the trade, HCK Capital (-19.0 sen), Ajinomoto (-18.0 sen), Time dotCom (-17.0 sen), Iskandar Waterfront City (-13.0 sen) and Turbo Mech (-13.0 sen) topped the broader market decliners list. On the FBM KLCI, Hong Leong Financial Group (-26.0 sen), BAT (-24.0 sen), DiGi (-6.0 sen), RHB Bank (-4.0 sen) and Petronas Chemicals (-4.0 sen) were the biggest decliners.

• Asia benchmark indices ended mostly lower as the Nikkei (-0.1%) retreated for the third straight session ahead of the U.S. Federal Reserve monetary policy meeting. The Shanghai Composite declined 0.2% on fears over potentially tighter financial regulations, but the Hang Seng Index (+0.02%) closed marginally higher on gains in financial and technology shares. ASEAN indices, meanwhile, closed mixed.

• A series of stronger-than-expected corporate earnings coupled the surge in crude oil prices sent Wall Street higher overnight as the Dow added 0.5%. On the broader market, the S&P 500 added 0.3% to close at a fresh record high level with both the financials and energy sectors adding 1.3% respectively to lead the gains, while the Nasdaq inched 0.02% higher.

• Earlier, European benchmark indices - the FTSE (+0.8%), CAC (+0.7%) and DAX (+0.5%), all closed higher to rebound from their two-week low on expectation of the U.S. Federal Reserve’s move to keep interest rates unchanged. The latter gains were also underpinned by the stronger than-expected Ifo Business Climate Index that rose to 116.0 in July 201, a record high level.

The Day Ahead

• While selective index heavyweights continue to shore up the key index, the rest of the market is still on a drifting mode with few catalysts to provide fresh buying interest. Similar conditions are likely to prevail over the near term with institutions likely to continuing shoring up selected heavyweights, while the rest of the market will remain broadly on a sideway trend.

• The FBM KLCI’s gains, however, could still be measured given the lack of substantive buying interest and the upsides likely to find resistance at the 1,770 level, while the near term support is at 1,760 level.

• Meanwhile, the insipid buying interest on the lower liners and broader market shares will continue to see traded volumes remaining on the low side for longer.

COMPANY BRIEFS

• Public Bank Bhd’s 2Q2017 net profit rose 6.0% Y.o.Y to RM1.33 bln, from RM1.26 bln last year, lifted by higher net interest income, lower loan impairment allowance and higher net fee and commission income, while revenue for the quarter gained 3.8% Y.o.Y to RM5.17 bln, from RM4.98 bln in the previous corresponding year.

• Cumulative 1H2017 net profit was also higher by 3.8% to RM2.58 bln vs. RM2.49 bln in 1H2016, alongside revenue which rose slightly by 2.1% Y.o.Y to RM10.2 bln, compared to RM10.0 bln a year ago. The group also proposed a first interim dividend of 27.0 sen per share, payable on 17th Aug, 2017. (The Star Online)

• Malayan Banking Bhd (Maybank) has raised RMB1.0 bln via the inaugural issuance of Renminbi bonds in China's interbank bond market after a bookbuilding process.

• The proceeds will be used for general banking and other corporate purposes, including funding both onshore and offshore businesses to support activities in connection with the Belt and Road Initiatives. The three-year senior, unsecured bonds have a 4.6% interest per year and was rated AAA by China Chengxin International Credit Rating Co Ltd. (The Star Online)

• Serba Dinamik Holdings Bhd has clinched about RM522.9 mln worth of operations and maintenance (O&M) contracts for oil and gas companies across Malaysia and United Arab Emirates (UAE).

• Four of the aforementioned contracts are for projects in Malaysia, while the remaining two were from the UAE. The group said that O&M contracts does not usually have a specified contract value by nature and the company derives the value based on its internal estimation of the historical records for similar type of projects or contracts. (The Edge Daily)

• Premier Nalfin Bhd is planning a cash distribution of 30.0 sen per share to its shareholders under a capital reduction and repayment exercise, amounting up to RM101.1 mln to be distributed.

• The group is required to declare a monies distribution proposal to its shareholders before 26th July 2017 and the distribution exercise must be completed within six months from then. Subsequently, the group will be delisted from Bursa Malaysia. (The Edge Daily)

• Ajiya Bhd’s 2Q2017 net profit jumped nearly five times to RM1.62 mln from RM325,000 a year ago, on the back of higher foreign currency translation gains, although revenue shed 11.0% Y.o.Y to RM90.5 mln, from RM101.2 mln last year. The group posted a foreign currency translation gain of RM1.9 mln vs. RM486,000 in the same quarter last year. (The Edge Daily)

• Sasbadi Holdings Bhd is proposing to acquire the remaining 30.0% stake in Sanjung Unggul Sdn Bhd it does not own from Law En Tzer for RM9.4 mln in cash, fully funded by bank borrowings. Sanjung Unggul is mainly involved in publishing books and educational materials catering to students in national-type Chinese schools.

• The proposed acquisition will give the group full control over the Sanjung Unggul and leverages on the latter’s competitive strengths such as its online and digital technological capabilities, extensive distribution network, economies of scale. (The Edge Daily)

• Property developer Gromutual Bhd has acquired three pieces of land in Melaka for RM7.3 mln, although the purpose of the acquisition and the vendors were undisclosed. The 10.1 ac., 9.69 ac. and 8.65 ac. land were priced at RM2.6 mln, RM2.5 mln and RM2.2 mln respectively. (The Edge Daily)

• T7 Global Bhd (formerly known as Tanjung Offshore Bhd) is buying a 9.8% stake in Triangle Energy Global Ltd, an Australian listed oil and gas (O&G) producer based in Perth, for US$500,000 (RM2.2 mln) from Tamarind Classic Resources Pte Ltd. The acquisition is to be funded by internally-generated funds. (The Star Online)

• CCK Consolidated Holdings Bhd has reported that a fire has damaged the fish ball production line at its subsidiary’s factory in Kuching. Operations has temporarily ceased for clean-up, repair works and inspection, and is expected to re-commence in 1-2 months’ time.

• The group is unable to finalise the financial impact to CCK group as yet, but believe that the damage is not expected to be substantial and will also be mitigated as it is adequately insured, pending the assessment of the insurance company. (The Edge Daily)  

Source: Mplus Research - 26 Jul 2017