More Of The Same Indifferent Trend

• The FBM KLCI finished with minor losses, weighed down by selling-pressure in selected heavyweights and thin trading volume ahead of the Hari Raya holiday. On a weekly basis, the Main Board also fell 0.9% W.o.W to 1,761.8 points. All the lower liners, however, rallied – led by the FBM Ace (+1.6%). The broader were mostly splashed in red, with the exception of the Consumer Products, Trading/Services, Plantations and Mining subsectors.

• Market breadth was slightly negative as losers edged winners by 11 stocks, while traded volumes narrowed by 23.6% to 1.62 bln shares as the market closed in the afternoon session on Hari Raya eve.

• Genting-affiliated stocks like Genting Malaysia (-14.0 sen) and Genting (-9.0 sen) dragged the key-index lower, together with Petronas Gas (-56.0 sen), KLCC (12.0 sen) and CIMB Bank (-11.0sen). Broader market decliners were BAT (-RM1.60), Aeon Credit (-24.0 sen), Ajinomoto (-22.0 sen), Hartalega (-22.0 sen) and Rapid Synergy (-16.0 sen) Pharmaniaga fell 14.0 sen on concerns over its position as the sole concession supplier of medical supplies and medicines to the Ministry of Health.
• On the winning team, broader market gainers were Supermax (+19.0 sen), Focus Lumber (+18.0 sen), Apollo Food Holdings (+16.0 sen), Bursa Malaysia (+16.0 sen) and UMS Holdings (+15.0 sen). Main Board chart-toppers, meanwhile, include Nestle (+RM3.10), Petronas Dagangan (+88.0 sen), Hap Seng Consolidated (+13.0 sen), IOI Corporation (+10.0 sen) and RHB Bank (+10.0 sen).
• Asian equities ended mixed last Friday as Washington prepares to unveil its revised tariffs on US$50.0 bln worth of Chinese imports. The Nikkei (+0.5%) rebounded, lifted by bargain-hunting activities after falling sharply in the previous session. The Shanghai Composite and the Hang Seng Index, however, extended its losses on rising trade conflicts, closing lower by 0.7% and 0.4% respectively. ASEAN stockmarkets also finished on a downward bias.

• Wall Street retreated amid fears of an allout trade war after U.S. unveiled its tariffs on China, with promises of retaliation by the latter. The Dow eased 0.3%, dragged down by the weakness in industrial stocks. On the broader market, the S&P 500 and Nasdaq (-0.1%) followed suit, ending lower by 0.1% and 0.2% respectively.

• Earlier, European equities was downward pressured, following the European Central Bank’s decision to pare its stimulus program this year, although potential rate hikes were delayed until 3Q2019. The FTSE (-1.7%) declined, weighed down by losses in mining giants. Meanwhile, the CAC (-0.5%) and the DAX (-0.7%) also suffered losses amid escalating trade tensions and weakness in banking stocks.

The Day Ahead

• Once again, the FBM KLCI managed to claw back most of its intraday losses as local institutions provided the cushion against the escalating foreign selldown last Thursday. The near term outlook is still very much the same with the uncertain environment continuing to permeate the market. In addition, there is heighten wariness over the escalation of a U.S.-China trade war after the former pegged tariffs on US$50 bln worth of imports while the latter is promising to retaliate.  Notwithstanding the continuing market uncertainties, we expect local funds to continue providing support against the foreign selldown which has topped more than RM5.0 bln since the 9th May General Election. We see the sustained support allowing the key index to linger around the 1,750-1,760 levels over the near term.

• Similarly, the broader market environment is also likely to remain subdued amid with few positive leads to pique investor interest. Therefore, we expect the lower liners to remain on a drifting mode at the start of the week.

Company Briefs

• Yinson Holdings Bhd is to enter into exclusive negotiations for the potential supply and charter of a floating production storage and offloading (FPSO) unit to process hydrocarbons on the Anyala & Madu fields located offshore Nigeria. Yinson entered into a heads of terms with Yinson Operations & Production West Africa Ltd and First Exploration & Petroleum Development Co Ltd (First E&P) to facilitate the exclusive negotiations between the parties.

• First E&P owns 40.0% of the rights to the fields with the remainder being held by Nigerian National Petroleum Corp on an unincorporated joint-venture basis. This will be Yinson’s second FPSO project in Nigeria after FPSO Adoon, currently deployed in the Antan field that is likely to be extended following the firm period expiry in October 2018, given the field’s good production profile. (The Star Online)

• Sime Darby Plantation Bhd has been added to the Dow Jones Islamic Market Malaysia Titans 25 Index with effect from 14th June 2018. Following the inclusion of Sime Plantation, construction and property company Gamuda Bhd was removed from the index. The second quarter weightings were based on the closing prices as at 8th June 2018. (The Star Online)

• Berjaya Corp Bhd’s (BCorp) CEO, Datuk Seri Robin Tan Yeong Ching is set to emerge as a substantial shareholder in tech solutions company, Iris Corp Bhd upon the completion of a proposed issuance and allotment of new shares in the company.

• The aggregate consideration for the proposed share issuance at RM59.3 mln would be satisfied in cash. Under the proposed share issuance, Tan was expected to subscribe 247.2 mln shares, representing 8.3% of the enlarged share capital in Iris. (The Star Online)

• Datasonic Group Bhd will relook at its initial expectation of surpassing RM100.0 mln in its net profit for the financial year ending 31st March 2019 after the change of government. Managing Director Datuk Abu Hanifah Noordin, however, remains optimistic that Datasonic's offerings will remain appealing to the new government. (The Edge Daily)

• Nexgram Holdings Bhd has disposed of its entire equity interest in six subsidiaries in an effort to streamline its business activities with the intention to focus on property development. This includes Nextnation Network Sdn Bhd, Dubaitech Marketing Sdn Bhd, Tech Bonanza Sdn Bhd, Taffu Media Sdn Bhd and Divamas Promotions Sdn Bhd for a total of RM1,000.

• The group also announced in a separate filing that it has disposed of Kontrek Anugerah, its subsidiary that provides machinery and equipment related to property development, for RM100. All the companies were sold to an individual, Muthukaruppan Sinnathamby. (The Edge Daily)

• JMR Conglomeration Bhd's largest shareholder, JMR Consolidated Holdings Sdn Bhd, has disposed 14.5 mln shares or an 11.4% stake in the group to Mayapada Capital Sdn Bhd.

• Its shareholding in JMR Conglomeration now stands at 12.6 mln shares or 9.9%. JMR Consolidated, which held about 63.4 mln shares or a 50.0% stake in JMR Conglomeration as at 30th June 2017, has been trimming its stake since December 2017. (The Edge Daily)

• My EG Services Bhd bought back 11.0 mln shares for RM7.9 mln between 4th June 2018 and 5th June 2018. The electronic government services specialist has reported that the minimum price for each share purchased was 69 sen, while the maximum price was 73 sen. (The Edge Daily)

Source: Mplus Research - 18 Jun 2018