• Following the rally on crude oil prices overnight, the FBM KLCI (+0.12%) crept higher yesterday, marking its fourth consecutive session winning streak, lifted by gains in selective banking heavyweights. Amidst the mixed broader market, the lower liners also closed mostly higher as the FBM Small Cap and FBM ACE adding 0.2% and 0.3% respectively.

• Market breadth remained negative as advancers outnumbered decliners on a ratio of 431-to-375. Traded volumes shrank 22.4% to 1.30 bln shares – the lowest level since January 2017.

• Banking heavyweights like Hong Leong Financial Group (+16.0 sen), Public Bank (+8.0 sen), CIMB (+5.0 sen) and RHB Bank (+3.0 sen) topped the big board advancers list, while Genting added 3.0 sen. Amongst the biggest gainers on the broader market include Ajinomoto (+52.0 sen), Vitrox (+35.0 sen), Bursa (+26.0 sen) and Atlan Holdings (+23.0 sen). Serba Dinamik added 4.0 sen after clinching RM522.9 mln worth of operations and maintenance contracts.

• Consumer products stocks like New Hoong Fatt (-16.0 sen), Latitude Tree (- 12.0 sen), Apollo Foods (-10.0 sen) and MSM (-9.0 sen) topped the broader market decliners list, while Luxchem tanked 13.0 sen. Meanwhile, key losers on the FBM KLCI were BAT (-58.0 sen), MISC (-5.0 sen), Hap Seng (-5.0 sen), Genting Malaysia (-3.0 sen) and KLK (-2.0 sen).

• Asia benchmark indices closed mostly higher as the Nikkei (+0.5%) snapped a three-day losing streak to reclaim the 20,000 psychological level, buoyed by strong corporate earnings. The Hang Seng Index (+0.3%) extended its gains after enduring a volatile trading session to close at its highest level in 25 months, while the Shanghai Composite gained 0.1%. ASEAN indices, meanwhile, closed mostly higher.

• U.S. stockmarkets inched higher as the Dow added 0.5% after the U.S. Federal Reserve kept its benchmark interest rates unchanged amid the sluggish inflation data and signalled that it will start to trim its balance sheet. On the broader market, the S&P 500 added 0.03%, while the Nasdaq closed 0.2% higher.

• Earlier, European benchmark indices - the FTSE (+0.2%), CAC (+0.6%) and DAX (+0.3%), all closed extended their gains, taking cue from the positive developments on Wall Street while the Euro Currency retreated against the Greenback. Commodity based stocks like Anglo American (+2.0%) and Fresnillio (+0.6%) advanced after commodity prices rallied.

The Day Ahead

• There remains no change to our near term view that the modest support on selective index heavyweights will continue to lift the key index, while the broader market and lower liners will likely remain on a drifting mode amid the lack of fresh buying catalysts.

• Still, we expect the key index to continue making modest gains with the selective buying, but volatility is also expected to remain a feature with profit taking activities limiting the upsides. The 1,770 level is still the near term resistance, while the 1,760 level is the immediate support.

• Amid the lower market interest, we also expect the trading volumes to stay subdued as more market players retreat to the sidelines, awaiting for new buying impetuses.

COMPANY BRIEFS

• Top Glove Corporation Bhd has earmarked about RM75.0 mln for it condom business, which should take off a year from now. The group believes that the existing technology in the glove industry is more advanced than that in condom manufacturing, giving Top Glove an edge in its diversification move. (The Edge Daily)

• Bursa Malaysia Bhd’s 2Q2017 net profit rose by 20.3% Y.o.Y to RM59.5 mln, from RM49.5 mln last year, lifted by higher contribution from its securities market segment. Revenue for the quarter was also 10.0% Y.o.Y higher to RM142.7 mln, from RM129.7 mln last year.

• Cumulative 1H2017 net profit matched its record high in 2008 at RM116.2 mln – a 16.9% Y.o.Y jump from RM99.4 mln a year ago,. Meanwhile revenue grew 8.2% Y.o.Y to RM285.4 mln, from RM263.7 mln in the previous corresponding period. The company has proposed an interim dividend of 20.0 sen per share and a special dividend of 15.0 sen per share. (The Edge Daily)

• Gadang Holdings Bhd's 4QFY17 net profit shrunk 3.5% Y.o.Y to RM30.0 mln, from RM31.1 mln in 4QFY16, weighed down by revenue, which plunged 33.8% Y.o.Y to RM163.78 mln, from RM247.5 mln last year.

• Full year net profit, however, rose 5.9% Y.o.Y to RM100.4 mln, from RM94.8 mln in FY16, although revenue was 19.4% Y.o.Y lower to RM542.8 mln against RM673.5 mln a year earlier. Consequently, the group has proposed a first and final single tier dividend of 3.0 sen per share (from 7.0 sen per share last year). (The Star Online)

• Heineken Malaysia Bhd‘s 2Q2017 net profit inched to RM61.6 mln, a mere 1.0% Y.o.Y increase from RM60.9 mln it reported in the same three-month period last year, mainly due to improved cost management. Revenue however, fell 12.0% Y.o.Y to RM406.6 mln, compared to RM459.7 mln in the corresponding period last year. The brewer declared an interim dividend of 40.0 sen, which is payable on 9th October, 2017. (The Star Online)

• SC Estate Builder Bhd has secured a RM3.7 mln contract to undertake site clearance and infrastructure earthworks for a PR1MA Homes Project in Kubang Pasu, Kedah. The project, which is slated to commence on 25th August 2017 and be completed by 24th February 2018 — will comprise 732 terrace houses, 492 apartment units, and 10 shop lots. (The Edge Daily)

• Computer technology and systems provider ECS ICT Bhd is planning to buy a 50.0% stake in property management company, Enrich Platinum Sdn Bhd (EPSB) from ECS ICT co-founder Datuk Teo Chiang Quan for RM12.2 mln, in order to secure a long-term tenancy in the building.

• EPSB's only fixed asset is its office and warehouse building, which is presently occupied by ECS ICT and its subsidiaries. (The Edge Daily)

• LBS Bina Group Bhd is acquiring eight ac. of leasehold land in Seri Kembangan, Selangor from Stratmont Development Sdn Bhd for RM63.0 mln for a mixed development project. The group will develop four towers of serviced apartments with an estimated gross development value of RM600.0 mln on the land, with work expected to start in 2018. (The Star Online)

• Mieco Chipboard Bhd is taking over SYF Resources Bhd's unit Great Platform Sdn Bhd for RM58.6 mln, paid via a combination of bank borrowing and internal funds.

• The acquisition will help Mieco Chipboard expand its chipboard production capacity and allow it to penetrate into the existing customer base of Great Platform. (The Star Online)

• Sunsuria Bhd has signed a 70:30 JointVenture (JV) agreement with Genlin Development Sdn Bhd to co-develop mixed development projects on two pieces of land totalling 2.23 ac. in Sentul. The former has also inked a sale and purchase agreement with Genlin to acquire the lands from the JV company for RM28.0 mln, making it a related party transaction. (The Star Online)

• Luxchem Corp Bhd posted a 33.5% Y.o.Y drop in its 2Q2017 net profit at RM8.7 mln, from RM13.0 mln in the same quarter last year, despite a 15.5% Y.o.Y hike in revenue to RM203.1 mln. The weaker earnings were mainly due to lower contribution from both the trading and manufacturing divisions.

• Luxchem’s cumulative 1H2017 net profit, meanwhile, climbed to RM22.3 mln vs. RM20.0 mln in the same period last year, alongside revenue which rose to RM421.3 mln, from RM335.8 mln last year. The group has also proposed a 2.5 sen dividend. (The Edge Daily)

• Pantech Group Holdings Bhd's 1QFY18 net profit surged 63.7% Y.o.Y to RM14.0 mln, from RM8.1 mln last year, boosted by higher sales demand from both its trading and manufacturing divisions. Revenue for the quarter also climbed 22.2% Y.o.Y to RM151.5 mln, in comparison to RM123.9 mln, while the group declared a 0.5 sen first interim dividend and a 0.5 sen special interim dividend, payable on 24th October, 2017. (The Edge Daily)
   
• Sasbadi Holdings Bhd’s 3QFY17 net profit lost 33.0% Y.o.Y to RM2.6 mln, from RM3.8 mln a year ago, dragged down by higher operating cost and a 3.3% Y.o.Y fall in revenue to RM21.7 mln, from RM22.4 mln previously.

• Cumulative 9MFY17 net profit also narrowed marginally by 1.9% Y.o.Y at RM12.3 mln, from RM12.5 mln in the same period last year, although revenue gained 3.6% Y.o.Y to RM80.1 mln, from RM77.3 mln in 9MFY16. (The Edge Daily)  

Source: Mplus Research - 27 Jul 2017