Conditions Still Morbid, Limited Upsides

• The FBM KLCI (-0.5%) was downbeat alongside the mostly negative performance across its regional peers after lingering in the negative territory for the entire trading session last Friday. Consequently, the key index recorded its third straight weekly decline, falling 0.6% W.o.W. The lower liners – the FBM Small Cap (-0.2%), FBM Fledging (-0.1%) and FBM ACE (-0.5%), all fell, while the broader market were mostly in the red.

• Market breadth stayed negative as losers outpaced winners on a ratio of 513-to-367 stocks, while 384 stocks traded unchanged. Traded volume dipped 7.4% to 2.56 bln as investors turn cautious.

• Nestle (-30.0 sen) and KLK (-26.0 sen) topped the local bourse decliners list, followed by banking giants like Public Bank (-26.0 sen), Hong Leong Financial Group (-14.0 sen) and Hong Leong Bank (-14.0 sen). Notable decliners on the broader market were BAT (-RM3.40), United Plantations (-44.0 sen), Ajinomoto (-34.0 sen), Heineken (-18.0 sen) and Gamuda (-15.0 sen).

• G3 Global (+39.0 sen) anchored the broader market winners list, followed by MSM (+21.0 sen), Allianz (+20.0 sen), Manulife (+13.0 sen) and Warisan TC Holdings (+12.0 sen). Meanwhile, Genting Malaysia (+23.0 sen) and Genting (+16.0 sen) were the only winners on the key index after resolving its dispute with Twentieth Century Fox and The Walt Disney Company.

• Asia benchmark indices edged mostly lower last Friday amid the expectations over the less dovish central bank stance on interest rate cuts. The Nikkei fell 0.5%, while the Hang Seng Index declined 0.7%. The Shanghai Composite, however, rose 0.2% after recovering all its intraday losses. ASEAN stockmarkets, meanwhile, closed mostly lower last Friday.

• U.S. stockmarkets rebounded as the Dow gained 0.2%, boosted by a series of stronger-than-expected corporate earnings from technology giants like Alphabet Inc. and Twitter Inc. Meanwhile, both the S&P 500 (+0.7%) and Nasdaq (+1.1%) finished at fresh record high levels, boosted by gains in technology shares

• Earlier, European benchmark indices – the FTSE (+0.8%), CAC (+0.6%) and DAX (+0.5%) all advanced after the European Central Bank kept interest rate unchanged and signals for potential rate cut. The weaker Euro Currency against the Greenback also contributed to the positive market sentiment.

THE DAY AHEAD

• The key index stocks returned to the soft side last Friday to tip it below the 1,650 level as profit taking activities took precedent. Although market conditions remain insipid at the start of the week, there could be bouts of support on the key index stocks to start the week, in tandem with the positive close on many key global indices last Friday.

• Although we think that there could be support on some of the key index constituents, we think that the upsides could be muted due to the lack of noteworthy leads. As a consequence, the broad market sentiments are still on the cautious side and this will likely keep conditions on Bursa Malaysia on the subdued side for longer. Above the 1,650 level, the other resistance is at the 1,660 level. The supports, meanwhile, are at 1,643 and 1,640 respectively.

• The lower liners were also sent lower on profit taking activities last Friday as they continue to undergo a consolidation spell after a bout of overbought. We see the process continuing and this will leave the FBM Small Cap, FBM ACE and FBM Fledgling indices to drift for longer.

COMPANY BRIEF

• AHB Holdings Bhd is planning to raise RM9.9 mln from two private placements including 10% of the group’s share capital of 176.0 mln shares and another 30.0% of the share capital, in order to fund its working capital, capex, marketing expenses and defray costs.

• The 10.0% private placement is expected to raise about RM2.5 mln and the 30.0% private placement could raise RM7.4 mln and is based on an indicative placement price of 14.0 sen a share. (The Edge Daily)

• Tan Chong Motor Holdings Bhd’s Vietnamese unit has inked a Memorandum of Understanding (MoU) with Chinese company, SAIC Motor Corp Ltd to assemble, sell, and distribute complete knockdown (CKD) vehicles and import and sell selected complete builtup (CBU) vehicles of SAIC’s stable of brands. (The Edge Daily)

• FGV Holdings Bhd has clarified that discussions are still at the preliminary stage for the sale of its 51.0% strategic stake in sugar refiner MSM Malaysia Holdings Bhd. The group added that is working on its transformation plan, which includes a review of all underperforming and non-performing businesses, especially its legacy investments. (The Edge Daily)

• Boustead Plantations Bhd’s Non Executive Chairman, Tan Sri Panglima Mohd Ghazali Che Mat is to be replaced by Datuk Syed Tamim Ansari Syed, effective 1st August 2019. At the same time Independent and Non-Executive Director, Dr Raja Abdul Malek Raja Jallaludin will be retiring from his position.

• Concurrently, Mohd Ghazali will also be retiring as Chairman and NonIndependent Non-Executive Director of Boustead Holdings Bhd. NonIndependent and Non-Executive Director Datuk Azzat Kamauludin and Independent Non-Executive Director Datuk Francis Tan Leh Kiah will also be retiring. (The Star Online)

• Boustead Holdings Chief Operating Officer (COO) Fahmy Ismail has resigned from his Non-Independent and NonExecutive directorship at Pharmaniaga Bhd, effective 31st July 2019. (The Star Online)

• Kejuruteraan Asastera Bhd (KAB) expects revenue to grow in 2019 as it plans to include mechanical engineering and energy efficiency (EE) solutions as new revenue streams. The group is also planning to expand its operations beyond the Klang Valley such as in Johor, Penang and Melaka.

• In addition, the group is looking to enter the EE solutions market and is currently in talks with a company that operates a chain of food and beverage outlets. (The Edge Daily)

• Hibiscus Petroleum Bhd’s listed Australian associate company, 3D Oil Ltd has been awarded a permit in the offshore Gippsland Basin by the National Offshore Petroleum Titles Administrator. The 1,006 sq.km. site is located in the southern side of the Gippsland Basin, adjacent to the Kingfish oilfield. (The Star Online)

• Westports Holdings Bhd’s 2Q2019 net profit surged 36.5% Y.o.Y to RM166.3 mln, from RM121.8 mln in the previos corresponding year, on the back of the 15.3% Y.o.Y growth in revenue to RM454.5 mln, from RM394.0 mln a year ago. (The Star Online)

• PN-17 company Asia Media Group Bhd’s shareholders have voted to remove five directors, including CEO Datuk Wong Shee Kai in an extraordinary meeting (EGM).

• Non-independent and Non-Executive Director Chow Zee Neng, NonIndependent Executive Director Ong Kar Kian, Independent and Non-Executive Director Paul Jong Jun Hian and Independent and Non-Executive Director Ong Chooi Lee were also removed. (The Edge Daily)

Source: Mplus Research - 29 Jul 2019