Still Rebounding

• Tracking the gains on Wall Street overnight, the FBM KLCI recovered all its intraday losses before closing 0.4% higher yesterday. Similarly, bargain hunting activities on beaten down stocks sent the lower liners – the FBM Small (+0.7%), FBM Fledgling (+0.3%) and FBM ACE (+0.9%) all closed higher, while broader market closed mixed.

• Market breadth turned slightly positive as advancers edged decliners on a ratio of 474-to-404 stocks. Traded volumes rose 6.6% to 2.38 bln shares amid the rotational play among the lower liners.

• Anchoring the advancers on the local bourse were CIMB (+19.0 sen), Axiata (+12.0 sen), Nestle (+10.0 sen), Hap Seng (+9.0 sen) and Maybank (+8.0 sen). Significant gainers on the broader market include United Plantations (+RM1.20), Ajinomoto (+84.0 sen), Panasonic (+24.0 sen) and Dutch Lady (+14.0 sen). MagniTech Industries added 14.0 sen after delivering strong quarterly results.

• In contrast, breweries like Carlsberg (- 50.0 sen) and Heineken (-40.0 sen) topped the broader market decliners list, followed by PLS Plantations (-30.0 sen), BAT (-26.0 sen) and UMW Holdings (-16.0 sen). Meanwhile, Malaysia Airport Holdings (-21.0 sen), IHH (-10.0 sen), Hartalega (-6.0 sen), Hong Leong Financial Group (-6.0 sen) and Petronas Gas (-6.0 sen) topped the key index decliners list.

• Asian benchmark indices staged a sharp rebound, recovering all their previous session’s losses on trade optimism between U.S. and China. The Nikkei (+1.0%) was boosted by the strongerthan-expected machinery orders data. The Shanghai Composite rose 1.2%, while the Hang Seng Index (+2.5%) rose above the 27,000 psychological level. ASEAN stockmarkets, meanwhile, closed mostly positive yesterday.

• Wall Street extended its gains overnight, boosted by the sharp recovery in technology shares whilst the rally in the Greenback cooled. The Dow added 0.6%, while the S&P 500 (+0.5%) re-captured the 2,900 psychological level. The Nasdaq, meanwhile added 0.8% to close above the 8,000 psychological level.

• However, European equities closed mostly lower as the FTSE fell 0.4% after the Bank of England kept its benchmark interest rate unchanged, strengthening the British Pound against the Greenback. The CAC fell 0.1%, dragged down by the eleventh hour selling pressure, but the DAX finished 0.2% after lingering in the positive territory for the entire trading session.

The Day Ahead

• Expectedly, the Malaysian stockmarket rebounded yesterday, but not before further selling in the morning session sent the key index lower. Going into the final day of the week, we see further upsides amid the improved global market sentiments that should extend to Malaysian stocks.

• Nevertheless, the potential gains could still be measured amid the still largely cautious market undertone that is curtailing market participation. At the same time, domestic leads are still far and in-between to sustain the market’s buildup. Therefore, we see the 1,800 points level remaining the main hurdle for now, which is followed by the 1,810 level. On the downside, there is support at 1,790 and 1,780 respectively.
• We also see the lower liners and broader market shares still making headway as they continue to recover from their bout of oversold. However, we also think the upsides could be countered by bouts of quick profit taking as well as selling into strength activities ahead of the long weekend.

COMPANY BRIEF

• Westports Holdings Bhd is planning to buy a parcel of land below sea, measuring 154.2 ha, off Pulau Indah in Selangor from Perbadanan Kemajuan Negeri Selangor (PKNS) for RM116.2 mln cash.

• The land will be used to expand the container terminals as the current preliminary port design for Container Terminal 10 to Container Terminal 19 requires additional land acreage to accommodate new wharf and container yard space to facilitate the effective operations of the new container terminals. (The Edge Daily)

• Bermaz Auto Bhd (BAuto) saw its 1QFY19 net profit surge 2.5x to RM50.3 mln, from RM20.2 mln a year ago, mainly due to higher revenue and improved gross profit margin from the domestic operations, and higher share of profit contribution from its associate, Mazda Malaysia Sdn Bhd (MMSB). Revenue for the quarter was also 24.1% Y.o.Y higher to RM485.4 mln, from RM391.2 mln last year. The group has declared a first interim dividend of 2.5 sen per share, payable on 26th October, 2018. (The Star Online)

• YLTC Sdn Bhd, a joint-venture (JV) company between Yee Lee Corp Bhd and Tasco Bhd, was awarded a contract from Shell Malaysia Trading Sdn Bhd to provide supply chain services for Shell convenience retail outlets in Peninsula Malaysia. Both parties inked a three-year purchase contract, which is valid between 1st October,2018 and 30th September, 2021. Shell also has the right to extend the contract for a further period of two years, up to 30th September 2023. (The Edge Daily)

• SMTrack Bhd has dropped its plans to jointly implement the vessel fuel intelligent tracking system with VFTech Sdn Bhd. Both parties signed a termination agreement to mutually terminate the collaboration agreement dated 29th January 2018. (The Edge Daily)

• Panpages Bhd has announced the resignation of its Group Executive Director and Chief Executive Officer Fong Wai Leong, as well as its Independent and Non-Executive Director Wong Mun Wai, just hours after Panpages’s shareholders voted not to re-elect the group’s Chairman and an Executive Director, YM Tengku Farith Tengku Ahmad Rithauddeen. (The Edge Daily)

• Axiata Group Bhd’s 66.4%-owned Indonesian listed outfit, PT XL Axiata Tbk, has proposed to raise up to five trillion rupiah (RM1.5 bln) through the establishment of a shelf bond and sukuk ijarah programme. The programme includes five series with each principal amount of up to one trillion rupiah, which will be issued via shelf registration public offering through bookbuilding process and have been assigned a rating of AAA (idn) by PT Fitch Ratings Indonesia. (The Edge Daily)

• CAB Cakaran Corp Bhd’s 51.0%-owned subsidiary Tong Huat Poultry Processing Pte Ltd has been fined S$3.6 mln (RM10.8 mln) for infringing the competition law in Singapore between 2007 and 2014.

• However, the group will be fully indemnified for the amount by Tong Huat’s previous shareholders as the group only bought into the subsidiary in 2015. (The Edge Daily)

• FGV Holdings Bhd has suspended its Group President and CEO Datuk Zakaria Arshad with immediate effect after issuing a notice of inquiry to the latter, following the conclusion of internal investigations into 10 critical issues.

• In the interim, the special board committee comprising four FGV directors, namely its Chairman Datuk Wira Azhar Abdul Hamid, Datuk Dr Salmiah Ahmad, Dr Mohamed Nazeeb P. Alithambi and Datin Hoi Lai Ping will take over the responsibilities of the CEO. (The Star Online)

• Binasat Communications Bhd has appointed Tan Sri Cham Hak Lim as independent and non-executive Chairman of the group, replacing Tan Sri Ahmad Fuad Ismail, who has resigned due to personal reasons. (The Edge Daily)

• Parkson Holdings Bhd is selling its 70.0% equity stake in its wholly-owned hire purchase unit, Parkson Credit Holdings Sdn Bhd, to Hong Kong-listed subsidiary Parkson Retail Group Ltd for RM49.0 mln. Parkson Holdings also holds a 55.0% stake in Parkson Retail. (The Edge Daily)

• Dataprep Holdings Bhd expects to return to profitability by FY19-FY20 following its decision to venture into e-wallet services, mobile apps and system integration. (The Edge Daily)  

Source: Mplus Research - 14 Sept 2018