• The FBM KLCI (+0.4%) notched two consecutive sessions of gains, driven by the bullish sentiment spilled over from Wall Street last night. The FBM ACE (+0.7%), the FBM Fledgling (+0.4%) and the FBM Small Cap (+0.3%) also advanced, while the majority of the broader market constituents finished higher, with the exception of the Technology (-0.9%) and the Properties (- 0.3%) subsectors.

• Market breadth stayed upbeat as gainers overtook losers on a ratio of 488-to-395 stocks. Traded volume also jumped 34.2% to 3.66 bln shares, boosted by renewed foreign inflows and strong buying-interest in ACE counters like MQ Technology (+3.5 sen).

• Blue-chip gainers include Petronas Gas (+64.0 sen), BAT (+22.0 sen), Hong Leong Financial Group (+18.0), IHH Healthcare (+14.0 sen) and MISC (+9.0 sen). Meanwhile, consumer products giants like Nestle (+58.0 sen), Ajinomoto (+30.0 sen) and F&N (+18.0 sen) propped the broader market higher, followed by Panasonic Manufacturing (+30.0 sen) and PMB Technology (+29.0 sen).

• On the opposite side of the trade, Malaysian Pacific Industries (-40.0 sen), Perusahaan Sadur Timah Malaysia (-27.0 sen), Bursa Malaysia (-16.0 sen), Pentamaster (-14.0 sen) and Hengyuan Refining (-12.0 sen) declined. Only three major stocks bucked the general positive trend on Bursa Malaysia, namely Petronas Chemicals (-2.0 sen), Telekom Malaysia (-2.0 sen) and Sime Darby (-1.0 sen).

• Japanese stockmarkets extended its twoday rally as exporters like Honda and Nintendo propped the Nikkei (+1.2%) higher amid a weaker Yen. The Shanghai Composite (+0.1%) and the Hang Seng Index (+0.1%) also closed higher, albeit with marginal gains. ASEAN stockmarkets finished on an upbeat note on Tuesday’s close.

• Major U.S. benchmark indices closed at fresh record highs again, driven by gains in major banks and easing concerns over the impact of Hurricane Irma, albeit being slightly capped by the weakness in Apple Inc. The Dow (+0.3%) ended slightly above the 22,118.0 psychologically mark, while both the S&P 500 and the Nasdaq hit a new high after adding 0.3% each.

• Earlier, European bourses closed higher for the fifth consecutive session, boosted by the rally in banking stocks amid higher bond yields. The FTSE (-0.1%), however, bucked the general positive market sentiment to finish lower, dragged down by a stronger Pound ahead of the British inflation data. The DAX and the CAC, meanwhile, added 0.4% and 0.6% respectively.

The Day Ahead

• We continue to see stocks on Bursa Malaysia heading higher over the near term as the more positive global market environment will draw-in more short-term players back into the market. As it is, the key index has breached the 1,780 level and is already near the 1,790 level, which should be cleared with relative ease over the near term.

• Beyond that, the 1,800 could be retested, but we think it will be difficult to breach as valuations is reaching expensive levels and the market is likely to become increasingly overbought – prompting a consolidation spell. Therefore, we continue to see the 1,800 level serving as a major hurdle for the FBM KLCI to clear.

• In the meantime, trading activities on the lower liners and broader market shares are also expected to remain elevated amid the calmer market conditions that would entice more retail players to take up short-term trading positions and to sustain market breadth at a high level.

Company Briefs

• Willowglen MSC Bhd has received a Mandatory Takeover Offer (MTO) from New Advent Sdn Bhd, a company owned by the family of Willowglen Group’s Managing Director, Wong Ah Chiew at 80 sen per share. The cash offer is 40% below the previous day’s closing price of RM1.34.

• New Advent is making the takeover offer for shares representing about 45.0% of the company’s issued shares (excluding treasury shares) not already held by the offeror and its persons acting in concert (PACs). That means the Wong family will have to fork out RM87.6 mln for the rest of the shares they do not own, totalling 109.5 mln shares.

• This comes after New Advent signed a share sale agreement to acquire 22.9% of Willowglen’s issued share capital for RM44.6 mln or 80 sen per share. Postacquisition, the total shareholdings of New Advent and PACs will increase from 32.1% to 55.0%. (The Star Online)

• A joint venture between Enra Group Bhd and Australia's Icon Engineering has secured a technology licence from Petroliam Nasional Bhd (Petronas). The licence would enable the JV to provide low-cost solutions to the upstream O&G industry within and outside Malaysia.

• The proposed JV is in line with Enra's expansion plan on leveraging on the opportunities in niche and/or cost effective solutions for the oil and gas industry. (The Star Online)

• IOI Corporation Bhd has sold its 70.0% controlling stake in specialty edible-oils provider, IOI Loders Croklaan to New York-listed Bunge Ltd for US$951.4 mln. The plantation giant has reported that the disposal is part of its internal restructuring exercise. (The Edge Daily)

• Boustead Holdings Bhd has issued its first Islamic Medium Term Notes valued at RM500.0 mln under a Sukuk programme with a nominal value of up to RM2.00 bln. The proceeds will be used to refinance existing borrowings and financing. The Sukuk programme will have a tenure of 10 years. (The Edge Daily)

• DBE Gurney Resources Bhd is considering selling three poultry products — leg meat yakitori, gizzard yakitori and tail yakitori, sourced from Japan-based GDJ Co Ltd to generate potential sales of around RM10.0 mln.

• DBE Gurney’s plan to source the three Yakitori products was formalised after it inked a Memorandum of Understanding with GDJ on 12th September 2017, a trading firm controlled by its Director, Toshikuni Nozawa. (The Edge Daily)  

Source: Mplus Research - 13 Sept 2017