• Tracking the tepid sentiments in global stockmarkets, the FBM KLCI (-0.6%) took a beating after lingering in the negative territory for the entire session on Friday. All the lower liners retreated, alongside an equally lackluster broader market.

• Market breadth was grim as decliners dominated advancers on a ratio of 826- to-148 stocks. The traded volume, however, jumped 21.2% to 1.64 bln shares amid the widespread selling pressure in equities as investors fled to safe-haven assets.

• Banking stocks like Hong Leong Financial Group (-34.0 sen) and AmBank (-10.0 sen) weighed on the blue-chip gauge, alongside BAT (-38.0 sen), PPB Group (- 20.0 sen) and Digi (-11.0 sen) on Friday. Broader market underperformers, meanwhile, include MPI (-44.0 sen), Aeon Credit (-40.0 sen), Ajinomoto (-40.0 sen), Tasek (-36.0 sen) and Fraser & Neave (- 34.0 sen).

• Broader market stocks which bucked the general tepid sentiment were United Plantations (+26.0 sen), Bintulu Port (+14.0 sen), Aluminum Company of Malaysia (+6.0 sen), Country Heights (+6.0 sen) and C.I. Holdings (+6.0 sen). Meanwhile, the only two Main Board counters to advance on Friday were CIMB (+2.0 sen) and Astro (+1.0 sen)

• Major stockmarkets across Asia finished the week on a softer footing, weighed down by selling-pressure in higher risk assets. The Nikkei inched lower, while the Yen continued to strengthened, dampening the earnings prospects of exporters. Hong Kong stocks took a beating as the Hang Seng index (-2.0%) ended in the red for the third consecutive session, pulled down by Tencent Holdings (-4.9%), following news that the group was being investigated for cyber-security violations. The Shanghai Composite index also lost 1.6% to close at 3,208.5 points, while ASEAN stockmarkets tumbled on Friday.

• Major U.S. stockmarkets rebounded on Friday, as lower-than-expected inflation data dimmed prospects of a higher interest rate in December. The Dow and the S&P 500 gained 0.1% each, on the back of bargain hunting activities, following the recent drop in stock prices, while the Nasdaq added 0.6% to 6,256.6 points.

• European stockmarkets posted its worst weekly losses this year as unabated geopolitical risks remain in focus, prompting a selldown in global stockmarkets. The FTSE declined 1.1% on the back of the weakness in mining heavyweights after China warned that the current rally in metal prices may not be sustainable due to its speculative nature, weighed down by weaker-than-expected monthly trade data and losses in mining stocks. The DAX flatlined, while the CAC shed 1.1% to close slightly below the 5,061.0 psychological mark.

The Day Ahead

• After last Friday’s falls, coupled with a calmer geopolitical environment, we think stocks on Bursa Malaysia will attempt to find a fresh footing over the near term. This follows the recovery in U.S. markets at the end of last week that will also provide some measure of calmness to the local market.

• Nevertheless, the upsides could still be limited as most market players are still on a tentative mood after last Friday’s selloff and market players will take some time to adjust to the improved environment. Therefore, we think the 1,770 level will serve as the near term resistances, while the support is at the 1,760 level.

• There could be some mild bargain hunting on the lower liners and broader market shares over the near term, but as the general market sentiments are still broadly cautious, we also think the upsides will be capped.

Company Briefs

• MRCB-Quill REIT’s (MQReit) 2Q2017 realised net income rose 43.3% Y.o.Y to RM22.0 mln, boosted by higher rental reversions from several properties and the recognition of income from Menara Shell, net of higher finance costs and manager’s fee. Revenue for the quarter gained 39.8% Y.o.Y to RM43.6 mln.

• For 1H2017, cumulative net profit added 47.6% Y.o.Y to RM45.2 mln. Revenue for the period gained 38.8% Y.o.Y to RM90.2 mln. (The Star Online)

• Serba Dinamik Holdings Bhd’s 2Q2017 net profit added 7.2% Y.o.Y to RM82.9 mln, mainly due to higher profit contribution from its operation and maintenance (O&M) segment. Revenue for the quarter grew 6.1% Y.o.Y to RM649.7 mln.

• For 1H2017, cumulative net profit stood at RM160.2 mln on the back of revenue of RM1.26 bln. No comparison for the corresponding period as Serba Dinamik was only listed on Main Market of Bursa Malaysia on 8th February 2017. The company also declared a dividend of 1.5 sen per share, payable on 20th September 2017. (The Edge Daily)

• Trive Property Group Bhd is looking to start manufacturing solar panel products, from only trading solar products, by forming a joint venture company with China's Fortunate Solar Technology Ltd. Trive has been searching for a readybuilt factory in either Port Klang or Johor Baru and is expected to purchase the factory by 1Q2018. (The Edge Daily)

• Sime Darby Bhd, via its subsidiary, Weifang Sime Darby Port Co Ltd, has launched its liquid terminal on 9th August 2017, which will see the port expanding its range of services to provide storage and usage of terminal facilities for bulk oil and chemicals.

• The new liquid terminal will be built, managed and operated by Weifang Sime Darby Liquid Terminal Co Ltd (WSDLT), a joint venture company owned in equal parts by Sime Darby Overseas (HK) Ltd and Dragon Crown Group Holdings Ltd. (The Edge Daily)

• Sunway Bhd has appointed former minister and Performance Management & Delivery Unit (Pemandu) Chief, Datuk Seri Idris Jala, as Co-Chairman of its board with immediate effect.

• Datuk Seri Idris is now a new Independent and Non-Executive director of the company. (The Edge Daily)

• Bumi Armada Bhd has inked a supplemental agreement for additional job scope worth US$134.0 mln, translating to about RM576.0 mln from Russia's LUKOIL-Nizhnevolzhskneft LLC. This extra engineering, procurement, construction and installation scope will involve the laying of subsea pipelines and the undertaking of post-trenching and back-filling works by Bumi Armada's subsea construction assets.

• The work is to be done on sections of the Filanovsky field in the Russian sector of the Caspian Sea. The work have started and are expected to be completed in 2H2018. (The Edge Daily)
   
• Pos Malaysia Bhd is acquiring two second-hand bulk carriers for a combined US$32.9 mln, as part of requirements of the contracts awarded by TNB Fuel Services Sdn Bhd (TNBF) to its indirect subsidiary, PNSL Bhd. The vessels will be delivered in December 2017.

• PNSL was awarded two 10-year contracts by TNBF on 19th July 2016 for PNSL to transport coal from various countries into ports in Malaysia. These contracts' value cumulatively amount to US$194.0 mln for a 10-year period. (The Edge Daily)  

Source: Mplus Research - 14 Aug 2017