Quick Rebound In Store

• The FBM KLCI (-0.6%) resume trading on a weak manner yesterday as sentiments were rattled by fresh concerns over the Sino-U.S. trade spat. The lower liners – the FBM Small (-0.2%), FBM Fledgling (- 0.4%) and FBM ACE (-0.5%) all ended in the red, while the Industrial sector (+0.4%) was the sole winner among its peers.

• Market breadth turned negative as advancers outstripped decliners on a ratio of 611-to-272 stocks. Traded volumes sank 33.4% with 1.79 bln shares exchanging hands as investors opt to distance themselves from the volatile market condition.

• Key decliners on the local bourse were Hong Leong Financial Group (-26.0 sen), IHH (-23.0 sen), CIMB (-19.0 sen), Maybank (-16.0 sen) and RHB Bank (-13.0 sen). On the broader market, consumer products stocks like Dutch Lady (- RM1.00), BAT (-34.0 sen), Padini (-31.0 sen) and Heineken (-24.0 sen) retreated, while United Plantations finished 28.0 sen lower.

• Notable advancers on the broader market include MI Equipment (+22.0 sen), Versatile Creative (+18.0 sen), Selangor Properties (+16.0 sen), Teck Guan Perdana (+14.0 sen) and Aeon Credit (+10.0 sen). Meanwhile, Petronas Gas (+26.0 sen), Nestle (+20.0 sen), MISC (+8.0 sen), Malaysia Airport Holdings (+7.0 sen) and Hartalega (+6.0 sen) led the FBM KLCI winners list.

• Asian benchmark indices rebounded from their previous session selloff as the Nikkei jumped 1.4% on expectation that Prime Minister Shinzo Abe will remain in power of the Liberal Democratic Party. The Shanghai Composite (+1.8%) recovered all its intraday losses after announcing new tariffs on American goods worth $60.0 bln, while the Hang Seng Index (+0.7%) re-claimed the 27,000 psychological level. ASEAN stockmarkets, however, closed mostly lower yesterday.

• U.S. stockmarkets rebounded, shrugging off the escalating trade tension between U.S. and China as the Dow rose 0.7%, boosted by the recovery in technology stocks. On the broader market, the S&P 500 (+0.5%) closed marginally above the 2,900 psychological level, while the Nasdaq added 0.8%.

• Earlier, major European indices ended higher as the CAC and DAX chalked up 0.3% and 0.5% gains respectively after European Central Bank President Mario Draghi urged banks in the Eurozone to reduce non-performing loan to boost lending and improve profitability. The FTSE, however, finished 0.03% lower after enduring a choppy trading session.

The Day Ahead

• Expectedly, concerns over the escalating trade dispute between the U.S. and China sent stocks on Bursa Malaysia lower in a low trading volume environment as most market participants remained were sidelined by the cautious market environment.

• However, the above issue may have calmed down slightly and this may help Malaysian stocks to stage a quick rebound over the near term - in tandem with the positive stock movements of key global indices overnight. This could allow the key index to retest the 1,800 points level, but the still cautious market undertone could curtail the upsides to the above level. Thereafter, the next resistance is at the 1,805-1,810 levels. Meanwhile, the supports remain at 1,790 and 1,780 respectively.

• We also think the lower liners and broader market shares could bounce back amid the calmer market conditions with many stocks continuing to recover from their recent bout of oversold.

COMPANY BRIEF

• FGV Holdings Bhd‘s Group President and Chief Executive Officer (CEO) Datuk Zakaria Arshad has resigned after being sent on compulsory leave on 13th September 2018. Moving forward, the forensic investigation into several past investments and acquisitions will continue despite the suspension and subsequent resignation of Datuk Zakaria. The probe is expected to be concluded by end-2018. (The Star Online)

• Separately, Datuk Zakaria has also resigned as Non-Independent and NonExecutive Director of MSM Malaysia Holdings Bhd. (The Edge Daily)

• Ideal Jacobs (M) Corp Bhd has secured a RM71.0 mln contract to build 301 singlestorey link houses in Sabah under the 1Malaysia Civil Servants Housing Programme (PP1AM) as the project’s main contractor. The project, which is located in Kampung Melinsung, Beringgis, Papar, Kota Kinabalu was awarded by Pemajuan Ilham Enterprise Sdn Bhd and will run for 24 months from the date of site possession. (The Edge Daily)

• Berjaya Food Bhd (BFood) saw its 1QFY19 net profit rise 16.9% Y.o.Y to RM6.2 mln, from RM5.3 mln last year, on higher profit contributions from Starbucks' operations in tandem with the higher revenue achieved. The improvement in quarterly earnings was also due to the sale of its loss-making KRR operations in Indonesia in FY18.

• Quarterly revenue also came in 4.5% Y.o.Y higher at RM161.4 mln vs. RM154.4 mln in 1QFY18 and the group has declared a first interim dividend of 1.0 sen per share for FY19, payable on 26th October 2018. (The Edge Daily)

• Vizione Holdings Bhd has secured a contract worth RM89.9 mln from PBA Holdings Bhd to build submarine pipelines from Butterworth to the Macallum area on Penang Island. The group has accepted the Letter of Award (LoA) from PBA to undertake the works, which fall under Package 3, for 21 months. (The Star Online)

• WCT Holdings Bhd was awarded a RM1.77 bln contract to build the proposed Pavilion Damansara Heights commercial development along Jalan Damanlela, from Impian Ekspresi Sdn Bhd. The contract includes the completion of nine blocks of office towers and three blocks of service apartments on a podium block and is expected to commence this month for a period of 38 months. (The Star Online)

• Damansara Realty Bhd (DBhd) is planning to dispose its car park management business in Singapore,as part of the group’s strategy to focus on expanding markets in order to strengthen its integrated facilities management business segment and maximise the group's value generation.

• The group has entered into a shares sale agreement with Selvakumar Baalu for the disposal of 140,000 shares or a 70.0% equity stake in loss-making Metro Parking (Singapore) Pte Ltd (MPS) for S$100,000 (RM302,400). (The Edge Daily)

• YFG Bhd has bagged a RM30.0 mln contract to construct apartments and terraced houses in Butterworth from Atta Global Group Bhd. The 24-month project, which encompassed 112 units of apartment units and eight units of threestorey terrace houses, slated to commence on 1st October 2018. (The Edge Daily)

• Telekom Malaysia Bhd (TM) is opening up its unifi 100Mbps plan to new unifi home customers. Priced at RM129 per month, the plan provides unlimited usage, access to unifi PlayTV packages for everywhere, anytime entertainment, as well as free 600 minutes of voice calls. The move follows the upgrading of existing unifi home customers to higher broadband speeds on 12th July 2018. (The Star Online)

• Superlon Holdings Bhd expects its FY19 revenue growth to rise at a faster rate of 10.0%, mainly driven by growing production capacity at its new factory in Vietnam and increasing sales volume. To recap, the group’s performance was negatively impacted last year due to forex fluctuations. Moving forward, the group is hopeful on achieving a 10.0% growth in FY19 top line in U.S. Dollar terms.

• For the full FY18, however, its net profit fell 48.3% Y.o.Y to RM12.2 mln, due mainly to an unfavourable foreign exchange rate and higher raw material prices, despite a marginal growth in revenue (+2.9% Y.o.Y) to RM109.4 mln, from RM106.3 mln. (The Edge Daily)

• MMAG Holdings Bhd has acquired a 26.4% equity stake in listed software solutions provider, PanPages Bhd for RM10.3 mln, in-order to leverage on PanPages' business search platform or database and to tap into the customers’ database by offering its courier and logistics services to all its existing customers. The consideration of 14.6 sen per PanPages share represents a 35.0% discount from the closing price of 22.5 sen on 14th September 2018 and a 44.0% discount from the average one-year closing price of PanPages of 26.0 sen. (The Edge Daily)  

Source: Mplus Research - 19 Sept 2018