• Tracking the positive sentiment spilled over from the U.S. stockmarkets after U.S. employment figures beat analysts’ expectations, the FBM KLCI notched 0.2% gains, fuelled by buying interest in selected banking heavyweights. However, all the lower liners – the FBM Ace (-0.8%), FBM Small Cap (-0.4%) and FBM Fledgling (-0.4%) pulled back on Monday, although the broader market finished mostly higher.

• Market breadth continued to be downward pressured as losers outweighed winners on a ratio of 516-to- 363 stocks. Traded volume jumped 37.0% to 1.95 bln, amid rising selling-pressure in the lower liners.

• Banking heavyweights like Public Bank (+18.0 sen), Hong Leong Financial Group (+10.0 sen) and Ambank (+6.0 sen) dominated the Main Board gainers, while other key gainers include Petronas Gas and MISC, which rose 16.0 sen and 10.0 sen respectively. Broader market outperformers, meanwhile, include Heng Yuan Refining (+34.0 sen), Allianz (+26.0 sen), Tasek (+26.0 sen), PLB Engineering (+25.0 sen) and Transocean (+24.5 sen).

• On the contrary, Aeon Credit Service (- 30.0 sen), Perusahaan Sadur Timah (-25.0 sen), Teo Guan Lee (-17.0 sen), JF Technology (-14.0 sen) and Oriental Interest (-14.0 sen) pulled the broader market lower. The five key-index laggards at Monday’s close were Hong Leong Bank (-28.0 sen), IHH Healthcare (-7.0 sen), Astro (-2.0 sen), Digi (-1.0 sen) and Sime Darby (-1.0 sen).

• Major regional indices rallied on Monday, lifted by the upbeat sentiment spilled over from better-than-expected U.S. employment data. The Nikkei (+0.5%) advanced, boosted by the weakness in Yen as Dollar climbed amid increased possibility of a rate hike in December this year. The Hang Seng index also closed 0.5% higher, with all but two sectors in red, while the Shanghai Composite index finished slightly above the 3,279.0 psychological mark. ASEAN stockmarkets followed suit, closing broadly higher on Monday.

• Major U.S. bourses advanced ahead of quarterly results announcements from major retailers this week. The Dow (+0.1%) rallied after the blue-chip gauge closed higher for the ninth consecutive session. On the broader market, the S&P 500 also advanced 0.2%, lifted by gains in consumer and technology-related stocks, while the Nasdaq rose 0.5% to 6,383.8 points.

• European equities closed mixed on Monday as investors digested a series of corporate earnings and gains in metal prices. The FTSE advanced 0.3% to its highest levels in two months, partly boosted by gains in mining stocks as iron ore prices climbed amid worries of undersupply, while the CAC (+0.1%) ekedout gains after rebounding from earlier losses. The DAX, however, narrowed 0.3% - weighed down by medical equipment manufacturer Fresenius (-1.4%) after the latter announced its plans to buy U.S. rival NxStage Medical Inc for US$2.35 bln.

The Day Ahead

• With global stockmarkets still on an elevated mood, the FBM KLCI is also expected to also head higher over the near term. However, we continue to think that the upsides will be limited as the buying interest is still selective with few noteworthy domestic leads. Therefore, the 1,780 level will continue serving as the major hurdle for the key index to clear over the near term. ? We also think the broader market will remain mixed–to-lower as many market players, particularly retail players, are likely to stay on the sidelines in the absence of fresh trading catalysts.

Company Briefs

• Palette Multimedia Bhd has announced that the company has entered into another sales contract with Trade House Atlantis Ltd. According to the terms of the contract, a hardware platform valued at US$450,000 (RM1.92 mln) is due to be delivered by 15th January 2018. (The Star Online)

• PIE Industrial Bhd’s 2Q2017 net profit increased 74.5% Y.o.Y to RM10.7 mln on higher revenue, lower operating expenses and reversal of slow moving inventory. Revenue for the quarter gained 29.6% Y.o.Y to RM176.1 mln.

• For 1H2017, cumulative net profit surged 170.6% Y.o.Y to RM22.3 mln. Revenue for the period grew 32.2% Y.o.Y to RM337.9 mln. (The Edge Daily)

• Malaysia Smelting Corp Bhd’s 2Q2017 net profit stood at RM9.0 mln, compared with a net loss of RM10.3 mln in the previous corresponding quarter on the back of better associates and joint ventures' contribution. Revenue for the quarter, however, fell 22.3% Y.o.Y to RM307.9 mln.

• For 1H2017, cumulative net profit gained 47.7% Y.o.Y to RM21.6 mln. Revenue for the period, however, decreased 11.2% Y.o.Y to RM714.5 mln. (The Edge Daily)

• Kronologi Asia Bhd has fixed the price of the shares to be issued under its private placement exercise at 79 sen apiece, which represents a discount of about 3.0% to the five-day volume weighted average market price up until 4th August 2017.

• At 79 sen each, the company is expected to raise gross proceeds of RM21.4 mln if all the placement shares are placed out and it will be used to pay its transnational infrastructure equipment, future business expansion, working capital and estimated expenses in relation to the proposed private placement. (The Edge Daily)

• Eastern & Oriental Bhd's (E&O) shareholders have approved the disposal of development land measuring 1.5 mln sq.ft. at the Seri Tanjung Pinang Phase 2 project in Penang for RM766.0 mln.

• The land sold by its subsidiary Tanjung Pinang Development Sdn Bhd (TPD) to Kumpulan Wang Persaraaan (Diperbadankan) (KWAP) covers 20% of the net development land on Phase 2A (STP2A) of the reclamation project on the northeast coast of Penang island, for which TPD has been granted the concession rights to reclaim and develop. The proceeds from the land disposal will be used to meet the funding requirements for STP2A reclamation and infrastructure works. (The Edge Daily)

• Hwang Capital (M) Bhd has received undertakings from two shareholders — DBS Vickers Securities Pte Ltd and DBS Bank Ltd to vote in favour of its proposed selective capital reduction and repayment (SCR) exercise aimed at taking the company private.

• Under the proposal, Hwang Capital’s largest shareholder, Hwang Enterprises Sdn Bhd and persons acting in concert will pay entitled shareholders RM260.7 mln or RM2.94 per share. The SCR will be executed by the cancellation of 88.7 mln shares, representing a 34.8% stake in Hwang Capital held by the minority shareholders. (The Edge Daily)  

Source: Mplus Research - 8 Aug 2017