• The FBM KLCI (+0.7%) finished positively, boosted by strong buying-interest in selected heavyweights in the eleventh hour. Consequently, the key index also closed 0.2% W.o.W higher at 1773.2 points. All of the lower liners notched gains on Friday – led by FBM Ace (+1.5%), FBM Fledgling (+0.3%) and FBM Small Cap (+0.1%). The majority of the broader market rallied, with the exception of the Construction (-0.1%), Properties (- 0.3%) and Mining (-0.7%) sub-sectors.

• Market breadth was positive as advancers beat decliners on a ratio of 480-to-375 stocks. Traded volume also jumped 25.4% to 1.83 bln, buoyed by window-dressing activities.

• CIMB (+38.0 sen) topped the Main Board gainers’ list, followed by Petronas Dagangan (+30.0 sen), Hong Leong Bank (+18.0 sen), MISC (+19.0 sen) and plantations-heavyweight Kuala Lumpur Kepong (+10.0 sen). Broader market advancers, meanwhile, include Time Dotcom (+50.0 sen), UMW Holdings (+44.0 sen), Malaysian Pacific Industries (+38.0 sen), Petron Malaysia (+28.0 sen) and Padini (+24.0 sen).

• On the opposite side, Ajinomoto (- RM1.20), IQ Group (-73.0 sen), Dutch Lady (-36.0 sen), Latitude (-36.0 sen) and Nestle (-20.0 sen) weighed on the broader market. Major key-index decliners last Wednesday were Digi (-4.0 sen), Hong Leong Financial Group (-4.0 sen), Ambank (-3.0 sen), Petronas Chemicals (-3.0 sen) and IHH Healthcare (-2.0 sen).

• Most regional key benchmark bourses slipped into the red yesterday, weighed down persisting geopolitical tensions after North Korea conducted its sixth nuclear test over the weekend. The Nikkei declined (-0.9%) as investors fled to safehaven assets – boosting the Yen. The Shanghai Composite index, however, notched a 0.4% gain, buoyed by increases in commodity producers, while the Hang Seng Index (-0.8%) retreated, in-tandem with the weakness in the ASEAN stockmarkets.

• Wall Street was closed for the Labor Day holiday celebrations on Monday.

• Earlier, European stockmarkets retreated, amid prevailing geopolitical tensions in the Korean peninsula. The FTSE lost 0.4%, dragged down by losses in financials (-0.9%) and technology stocks, while the CAC finished 0.4% lower at 5,104.0 points. The DAX also fell by 0.3%, ahead of Germany’s general election in September.

The Day Ahead

• With last Wednesday’s gains mostly on superficial grounds, coupled with the renewed geopolitical concerns arising from North Korea’s missile tests, we see the FBM KLCI retreating over the near term.

• As it is, we think the geopolitical concerns will continue to weigh on global market sentiments and this could prompt market players to lock-in their short-term gains from last week that could leave the market on a short-term consolidation trend. On the downside, we see the key index retreating back to the 1,770 level first, before the 1,765 level comes into play. On the upside, the key near-term resistance is still the 1,780 level.

• Meanwhile, we also see profit taking activities on the lower liners and broader market shares as retail players are likely to be quick in locking-in their profits from last Wednesday. This could again leave these stocks on a drifting mode. COMPANY BRIEFS

• Malayan Banking Bhd’s (Maybank) 2Q2017 net profit jumped 43.1% Y.o.Y to RM1.66 bln, primarily attributed to higher net operating income, better net interest margin (NIM) and a significant decline in net impairment losses. Revenue for the quarter improved marginally by 0.2% Y.o.Y to RM10.9 bln.

• For 1H2017, cumulative net profit improved 29.9% Y.o.Y to RM3.36 bln. Revenue for the period increased marginally by 0.4% Y.o.Y to RM22.2 bln. A dividend of 23.0 sen for the quarter was declared. (The Star Online)

• Axiata Group Bhd’s 64.0%-owned unit unit, edotco has emerged as the eighth largest independent global tower company after it agreed to buy 13,000 cellular towers in Pakistan for US$940.0 mln (RM4.01 bln). Earlier in August 2017, edotco completed the purchase of 700 towers for US$89.0 mln from Tanzanite, also in Pakistan.

• With the completion of the deal for 13,000 towers, edotco would end up with more than 26,000 towers across South Asia and South-East Asia. Globally, edotco would be the second largest global company after American Tower Company, which has 150,000 towers.

• On its financial performance, 2H2017 net profit jumped 115.5% Y.o.Y to RM407.2 mln on the back of improved operational performance and growth in data revenue. Revenue for the quarter gained 14.1% Y.o.Y to RM6.06 bln.

• For 1H2017, cumulative net profit rose 15.9% Y.o.Y to RM646.2 mln. Revenue for the period added 15.7% Y.o.Y to RM11.94 bln. (The Star Online)
   
• Bison Consolidated Bhd has proposed a private placement to raise up to RM77.5 mln, to be used mainly to buy industrial land with an office block in Petaling Jaya that will serve as its future corporate office. The MyNEWS.com chain store operator plans to issue up to 31.0 mln new shares, representing up to 10.0% of the total number of the company’s issued shares. The issue price will be finalised later, but Bison gave an indicative price of RM2.50 per placement share.

• Of the estimated gross proceeds totaling up to RM77.5 mln, Bison would set aside up to RM50.0 mln to acquire a 17,869 sq.m. plot of land in Kota Damansara, where a single-storey warehouse with an annexed threestorey office block are located. The company also intends to relocate its corporate office to the annexed office block. Of the remaining gross proceeds from the placement, up to RM24.4 mln will be allocated for working capital.

• Bison expected the proposed private placement to be completed within six months. Meanwhile, Bison has also proposed 1-for-1 bonus issue of up to 341.1 mln new shares to reward its shareholders and to increase its capital base to reflect its current scale of operations. (The Star Online)

• Voir Holdings Bhd has proposed to diversify into areas such as construction and property development by taking 13.2% equity interest in Consortium Zenith Construction Sdn Bhd. Voir proposed to subscribe to new shares for RM9.9 mln in cash.

• Consortium Zenith - whose chairman Datuk Zarul Ahmad Mohd Zulkifli is also Voir’s Chairman and substantial shareholder (with a 43.4% stake) was awarded contracts worth RM6.34 bln by the Penang government in 2013. Under the mega infrastructure project, Consortium Zenith will design and build a 7.2km undersea tunnel linking Penang island to the mainland and three roads, after which it will also operate and maintain the tolled tunnel for at least 30 years.

• Voir also proposed to dispose of its unisex fashion brands via the sale of its entire equity interest in wholly-owned casual wear retailer, Applemints Apparels Sdn Bhd to TDST Sdn Bhd (a licensee of the Tangs retailer brand in Malaysia) for RM21.0 mln in cash. The proposed disposal which would generate a net gain of RM0.7 mln, was in view of the company's lack of expertise and creative team to grow the business in male apparels, footwear and accessories.

• The group will continue its fashion retailing business but by focusing on ladies apparels and accessories. Its 100% owned subsidiary, Kumpulan Voir Sdn Bhd has been in the ladies fashion retailing business for more than 20 years in Malaysia, carrying local brands such as Voir and South China Sea that are targeted at the middle-class female segment.

• Voir is also proposing to change the company’s name from Voir Holdings Bhd to Vertice Bhd and to set up a share issuance scheme (SIS) of up to 15.0% of its issued share capital (excluding treasury shares). The SIS options will be given to directors and/or employees of the group who meet the criteria of eligibility for participation in the SIS. Voir expects the proposals to be completed by end 2017. (The Star Online)

• Felda Global Ventures Holdings Bhd’s (FGV) 2Q2017 net profit shrank 64.8% Y.o.Y to RM25.9 mln, dragged by losses incurred by its sugar business unit. Revenue for the quarter, however, increased 1.9% Y.o.Y to RM4.22 bln.

• For 1H2017, cumulative net profit stood at RM28.4 mln vs. a net loss of RM7.4 mln in the previous corresponding period. Revenue for the period grew 8.2% Y.o.Y to RM8.55 bln. (The Edge Daily)

• Boustead Holdings Bhd's 2Q2017 net profit slumped 73.7% Y.o.Y to RM59.3 mln, as the previous corresponding quarter included one-off gains realised on divestment of the group’s associate company Jendela Hikmat and disposal of plantation land amounting to RM209.5 mln and RM124.2 mln respectively. Revenue for the quarter, however, grew 15.3% Y.o.Y to RM2.39 bln.

• For 1H2017, cumulative net profit slipped 68.9% Y.o.Y to RM63.5 mln. Revenue for the period climbed 21.3% Y.o.Y to RM4.76 bln. (The Edge Daily)

• Kossan Rubber Industries Bhd has proposed to buy a piece of vacant industrial land in Banting, Selangor, from Andalas Development Sdn Bhd for RM96.0 mln, or at RM22.50 psf. The land is proposed to be developed for the group’s manufacturing activities. (The Edge Daily)

• Bonia Corp Bhd's 4QFY17 net profit jumped 103.2% Y.o.Y to RM7.7 mln on improvements in gross profit margin and lower fair value adjustments on investment properties. Revenue for the quarter, however, dropped 4.0% Y.o.Y to RM153.4 mln.

• For FY17, cumulative net profit gained 30.2% Y.o.Y to RM31.7 mln. Revenue for the year, however, fell 8.5% Y.o.Y to RM613.2 mln. (The Edge Daily)
   
• Ekovest Bhd’s 4QFY17 net profit sank 86.5% Y.o.Y to RM18.4 mln on lower recognition of fair value adjustment for investment properties. Revenue for the quarter, however, increased 9.4% Y.o.Y to RM318.5 mln.

• For FY17, cumulative net profit fell 28.8% Y.o.Y to RM110.6 mln. Revenue for the year, however, grew 37.2% Y.o.Y to RM1.09 bln. (The Edge Daily)

• Brahim's Holdings Bhd's 2Q2017 net loss narrowed to RM2.0 mln from RM5.8 mln in the previous corresponding quarter on higher revenue from the flight catering business. Revenue for the quarter grew 13.1% Y.o.Y to RM69.5 mln.

• For 1H2017, cumulative net loss shrank to RM3.9 mln, from RM10.8 mln in the previous corresponding period. Revenue for the period gained 15.5% Y.o.Y to RM140.9 mln. (The Edge Daily)

• Titijaya Land Bhd’s 4QFY17 net profit gained 14.2% Y.o.Y to RM17.0 mln, mainly on contribution from its completed projects. Revenue for the quarter increased 14.5% Y.o.Y to RM122.1 mln.

• For 1H2017, cumulative net profit added 11.7% Y.o.Y to RM76.7 mln. Revenue for the period, however, dropped 4.8% Y.o.Y to RM380.8 mln. (The Edge Daily)  

Source: Mplus Research - 5 Sept 2017