• The FBM KLCI finished higher on Monday, in-tandem with the recovery in regional peers and stronger crude oil prices. The majority of the lower liners, meanwhile, closed on an upward bias with the exception of the FBM ACE (-0.6%) as the broader market turned mixed.

• Market breadth was positive as advancers outweighed decliners on a ratio of 473-to-384 stocks. Traded volume however, fell 8.1% to 2.73 bln shares as investors retreated to the sidelines amid the lack of trading catalysts.

• Significant key-index advancers were Hong Leong-affiliated companies like Hong Leong Bank (+24.0 sen) and Hong Leong Financial Group (+12.0 sen), followed by Genting Malaysia (+8.0 sen), Sime Darby (+7.0 sen) and Telekom Malaysia (+5.0 sen). Meanwhile, on the broader market Nestle (+48.0 sen), Panasonic Manufacturing (+43.0 sen) and United Plantations (+30.0 sen) rallied. Other gainers include oil refineries like Hengyuan Refining (+47.0 sen) and Petron Malaysia (+43.0 sen).

• On the contrary, broader market laggards include IQGroup (-29.0 sen) and Time Dotcom (-18.0 sen), followed by rubber gloves manufacturer - Hartalega (-20.0 sen), Kossan Rubber (-18.0 sen) and Topglove (-18.0 sen). The five underperformers on the Main Board were BAT (-40.0 sen), Petronas Gas (-8.0 sen), MISC (-5.0 sen), Westports (-3.0 sen) and Hap Seng (-2.0 sen).

• Key regional stockmarkets rebounded after shaking off fears of a missile launch by North Korea over the weekend. The Nikkei (+1.4%) snapped two straight sessions of losses to close higher, on the back of a recovery in the Greenback. The Shanghai Composite gained 0.3%, contributed by the government’s plan to ban traditional petrol-fueled cars, coupled with its Central Bank’s decision to abort the reserve requirements for forward Yuan contracts amid the strengthening Yuan. The Hang Seng Index (+1.0%) rallied, while the majority of ASEAN stockmarkets finished in the positive territory.

• Wall Street finished on an upbeat tone as investors shrugged off the worse impact of Hurricane Irma. The Dow surged up by 1.2% as more-than-half of its constituents advanced. Meanwhile, both the S&P 500 and the Nasdaq ended 1.1% higher on Monday.

• European stockmarkets finished on a stronger ground, underpinned by gains in insurance companies following lowerthan-expected insured loss resulting from Hurricane Irma. The FTSE (+0.5%) finished higher as gains in materialsrelated counters offset the weakness in consumer staples-linked stocks. The CAC also rose 1.4%, while the DAX (+1.2%) rallied with all of its subsectors in the green.

The Day Ahead

• Stocks on Bursa Malaysia are expected to perk higher over the near term in tandem with the positive performance of overseas bourses following the easing geopolitical issues in North Korea and the less-severe effects of the hurricanes in the U.S. This is likely to provide the fuel for the FBM KLCI to nudge closer to the 1,780 resistance level as it will also benefit from the global stockmarkets’ positivity.

• The near term upsides will be supported by the potentially increased investor interest on trading activities as market players take advantage of the calmer market conditions to take fresh positions. However, the upsides may continue to be mitigated by quick profit taking activities as there remain few incentives for market players to keep their open positions for longer.

• Similarly, we see increased rotational play among the lower liners and broader market shares where interest has been building up over the past week and we expect that to will also add breadth and depth to the market. Nevertheless, we also think that the near term upsides may be curtailed by retail players opting to lock-in their profits earlier as noteworthy leads are still largely absent.

Company Briefs

• HSS Engineers Bhd’s (HEB) associate, HSS Integrated Sdn Bhd has been appointed by Pengurusan Aset Air Bhd as the engineering consultant for the upgrading of high-priority water distribution system for the Iskandar Malaysia region. The RM5.1 mln contract encompasses engineering design and construction supervision for the highpriority project. The work will commence on 19th September 2017 and is targeted to be completed in 2Q2022. (Bernama)

• Malaysia Airports Holdings Bhd (MAHB) has recorded a 7.8% Y.o.Y increase to 11.4 mln in passenger movements in August 2017, boosted by higher number of international passengers that rose 15.8% Y.o.Y with 5.5 mln passengers using its facilities, while domestic passengers’ throughput grew by 1.3% Yo.Y to 5.9 mln passengers. The above data also includes its Istanbul operations.

• Overall aircraft movements increased by 4.6% Y.o.Y. International aircraft movements grew by 14.9% Y.o.Y, but domestic aircraft movements fell 1.3% Y.o.Y. The average load factor expanded 2.4% Y.o.Y to 77.0% in August 2017. The improvement in August 2017 was mainly driven by the international traffic growth that was contributed among others by the Hajj travel season, the Kuala Lumpur SEA Games, visa relaxation for India and China, competitive fares as well as favourable exchange rate for foreign tourists. (The Star Online)

• Bermaz Auto Bhd's 1QFY18 sank 50.8% Y.o.Y to RM20.2 mln as revenue fell on lower sales volume, profit margins and contributions from Mazda Malaysia. Revenue for the quarter slipped 20.7% Y.o.Y to RM391.2 mln. A dividend of 1.5 sen per share was declared. (The Star Online)

• George Kent (M) Bhd has bagged a contract to deliver water meters to Hong Kong’s Water Supplies Department (WSD) for the second time. Under the US$6.9 mln (RM28.7 mln) contract, the company would supply 650,000 DN15 Brass PSM-T water meters to WSD in 24 shipments within two years.

• George Kent secured its first contract to supply water meters to WSD back in 2015. That US$7.2 mln deal involved the supply of 600,000 meters. The latest contract would be the largest single order it had ever clinched from a single source in its metering business history. (The Star Online)

• Cypark Resources Bhd has secured a RM17.0 mln contract for the closure and restoration of a landfill in Negeri Sembilan. The contract was awarded by the National Solid Waste Management Department, an agency under the Urban Wellbeing, Housing and Local Government Ministry. The contract is expected to be completed in November 2018. (The Edge Daily) ? Ibraco Bhd has proposed to buy four parcels of vacant freehold land in Petaling Jaya, Selangor, measuring a total of 15,811.2 sq.m. for RM37.4 mln. The said land is acquired at around RM220 psf.

• The land acquisition move, which marked its second venture in West Malaysia, was formalised after Ibraco inked sales and purchase agreements with two firms: Milan Sanctuary Sdn Bhd and Jurapat Sdn Bhd. The lands, which are fronting the New Pantai Expressway, had received a development order from the local authority for a mixed commercial development. (The Edge Daily)

• AirAsia Bhd has reported that Philippines AirAsia has postponed its planned US$200.0 mln (about RM840.0 mln) Initial Public Offering (IPO) to 2018 to further expand Philippines AirAsia's business. Back in June 2017, AirAsia Group Chief Executive Officer, Tan Sri Tony Fernandes has announced that Philippines AirAsia had originally scheduled its IPO in 2H2017. (The Edge Daily)  

Source: Mplus Research - 12 Sept 2017