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Friday, July 8, 2016

Weekly Wrap of KLCI And Forecast for Week Ahead

Overall week it was observed low volume in the market as we had only two and a half trading days. As we had two festive days in the week traders avoided to enter the market and hold positions. Week constituted one bullish and 2 bearish days. Market ended with a closing of 1644 and in the red.
Forecast for week ahead:
After one bullish closing we had two bearish closing days in the entire week, we observed a bullish candle on the last trading day. In the final session of the week market closed at the level of 1644. Volume has been on the lower side throughout the week because of the two festive days. In the coming market is expected to make a rounding bottom pattern and if it completes the pattern , it is expected to test the resistance level of 1663 and if it breaches this level it is expected to go up and test the second level of 1675. On the other side if it breached the support level of 1637 it is expected to go further down to the level of 1617.
Sup 1
Sup 2
Sup 3
Res 1
Res 2
Res 3
1637
1617
1600
1663
1675
1688

Technical indicators:
RSI for this week is 45.524 with CCI at -43.181 Besides, difference line of MACD -11.723.
Counter-Specific News:
  • AmInvestment Bank Bhd bagged the “Project Finance House of the Year” and “Best Transport Deal” awards for the second consecutive year at The Asset Triple A Asia Infrastructure Awards 2016.
  • Maybank IB Research said the potential sale of Hong Leong Assurance (HLA) and Hong Leong MSIG Takaful (HLMT) could raise about RM3.2 billion for Hong Leong Financial Group (HLFG), said.
  • Mah Sing Group Bhd will be launching the final tower of Lakeville Residence here on July 16 and 17, which will bring the RM1.5 billion development to its targeted completion by 2020.
  • Tropicana Corp Bhd’s disposal of land in Gelang Patah will reduce the group’s exposure in Johor and lock in a net gain of RM55.5 million, said Affin Hwang Capital.
Global factors and World Indices:
  • Hong Kong stocks fell on Friday, tracking losses in Shanghai shares, on fears of further weakness in the yuan and worries that Britain's decision to leave the European Union could destabilise one of China's biggest export markets. Hang Seng Index fell 0.7 per cent to 20,564.17 points.
  • Tokyo stocks closed in the red Friday, their fourth straight loss as an early rally fizzled. Nikkei 225 index slumped 1.11 per cent, or 169.26 points, to end at 15,106.98.
  • Asian markets fell Friday morning, at the end to a volatile week dominated by the fallout from Britain's European Union exit, with investors now turning their attention to the release of US jobs data.
  • The US dollar gained on the euro but slipped against the yen Thursday as investors waited to see if the coming US June jobs report shows a rebound from May's sharp downturn.
  • Oil prices dived Thursday after US inventories fell less than expected last week, adding to market concerns about abundant global supplies.
  • Crude tumbled US$2.29 to US$45.14 a barrel, its lowest price in nearly two months.
  • Brent finished at US$46.40 a barrel, down a hefty US$2.40 from Wednesday's settlement.
  • Gold headed for the longest run of weekly gains in two years, bolstered by the uncertainty surrounding the UK's vote to leave the European Union, with investors turning their attention to a monthly US jobs report.

Wednesday, July 6, 2016

Malaysia Market: Companies That May Be In Focus On Friday

Based on corporate announcements and news flow today, companies that may be in focus on Friday (July 8) could include: Bertam, Guocoland, TH Heavy, Melewar, Halex, Goldis and ML Global. 


Bertam Alliance Bhd is selling two parcels of freehold land at Batu 9, Cheras, with a collective land size of 47,930 sq m (11.8 acres) to a unit of Guocoland (Malaysia) Bhd, for RM128 million.
Bertam announced to Bursa Malaysia today that it expects to recognise a RM79.84 million disposal gain arising from the land deal.
The sale was effected through Bertam's unit MV Properties Sdn Bhd, which inked a sale and purchase agreement with Tujuan Optima Sdn Bhd, Guocoland's subsidiary.
The land's audited net book value (NBV) was RM42.96 million as at Dec 31, 2015 (FY15). It was valued at RM125.11 million, as appraised by independent valuer DTZ Nawawi Tie Leung Property Consultants Sdn Bhd, on March 19, 2016.
The proceeds will be utilised for borrowings repayments and working capital. Upon that, the group should have zero gearing and enjoy an interest cost savings of about RM7.3 million a year based on the effective rate of 6% to 8.6% per annum.
The company has accumulated losses of RM38.51 million, while total borrowings stood at RM103.87 million as at Dec 31, 2015 (FY15).
Meanwhile, Guocoland intends to fund the deal fully by cash via internally generated funds and/or bank borrowings.
Guocoland does not need to seek approval from its shareholders for the land purchase. But Bertam need shareholders' approval for the sale.
TH Heavy Engineering Bhd (THHE) was slapped with two winding-up petitions from its creditors for a collective sum of US$8.88 million (RM35.6 million) in relation to the supply of equipment and work done at the floating production, storage and offloading (FPSO) Layang project.
In separate bourse filings today, THHE said the first petition was by MIB Orwell Offshore Ltd and was presented on June 30 to the Kuala Lumpur (KL) High Court. A copy of the petition was served to THHE on July 4.
It said the petitioner is claiming US$7.61 million for the supply of equipment and machinery for the FPSO Layang project, and the case management for the petition has been fixed on July 20.
The second petition is by MIB Italiana SPA and was presented to the KL High Court on July 1; a copy of it was also served to THHE on July 4.
THHE said the second petitioner is claiming US$1.27 million for the supply and installation of quick release hook and mooring hawser for the same project. Case management for this petition has been set on July 15.
THHE said it has sought necessary legal advice on both matters with a view of defeating the petitions altogether, adding that the petitions would not have any additional financial and operational impact on the group.
Melewar Industrial Group Bhd has decided to drop its appeal against MyCC's finding that Megasteel Sdn Bhd did not abuse its dominant position or practise anti-competition margin squeeze in the cold rolled coil market.
Megasteel's lawyers have been informed today that Melewar had, on June 21, withdrawn the appeal with no objection from MyCC, which stands for the Malaysian Competition Commission, according to a bourse filing by Melewar's parent company, Lion Corp Bhd.
Lion Corp, which owns 79.89% of Megasteel, said following Melewar's withdrawal, the case against Megasteel is now 'closed' and that MyCC's finding of non-infringement of the Competition Act 2010 by Megasteel is 'final'.
Halex Holdings Bhd's executive director and chief executing officer (CEO) Chan Yee Keen has decided not to renew his employment contract upon expiry of the contract on Sept 30.
According to its filing with Bursa Malaysia today, Halex said Chan, 45, had informed that he would like to pursue his own personal interests after fulfilling his contract with the company.
He was appointed as the group's executive director and CEO on Oct 1, 2015.
"The board meanwhile would be taking steps to engage a replacement and an appropriate announcement would be made in due course," it said.
Goldis Bhd has declared a first interim dividend of two sen per share for the financial year ending Dec 31, 2016, to be paid out on Aug 12.
The company announced to Bursa Malaysia that the ex-date for the dividend will be on July 22.
"Holders of Redeemable Convertible Cumulative Preference Shares (RCPS) are reminded to lodge with the registrar of the company, Tricor Investor & Issuing House Services Sdn Bhd, their conversion forms by 5pm on or before July 14, 2016, in order to be entitled to the first interim dividend," the filing read.
ML Global Bhd has redesignated its non-independent director Tan Sri Lim Hock San as its managing director (MD), replacing Beh Hang Kong who was redesignated as executive director, effective today.
The boardroom changes came after LBS Bina Group Bhd, an entity controlled by Lim, gained control of ML Global with an equity stake of 50.92%.
Beh has been MD at ML Global since Jan 16, 2008. He has been appointed as executive director at Yong Tai Bhd since Jan 15, 2016.
Meanwhile, ML Global also redesignated its non-independent director Datuk Wira Lim Hock Guan as its executive director.

Thursday, June 30, 2016

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Saturday, June 18, 2016

Malaysia Inflation Rate at 13-Month Low

Consumer prices in Malaysia rose 2.0 percent year-on-year in May of 2016, compared to a 2.1 percent gain in April and matching market estimates. It was the lowest inflation figure since April 2015 as prices of food and housing & utilities eased while cost of transport fell further.
Year-on-year, prices moderated for: food & non-alcoholic beverages (+4.1 percent in May from +4.2 percent in April); housing, water, electricity, gas & other fuels (+2.2 percent from +2.6 percent); furnishing, household equipment & routine maintenance (+2.2 percent from +2.6 percent); health (+2.0 percent from +2.2 percent); recreation services & culture (+1.5 percent from +1.6 percent), restaurants & hotels (+2.5 percent from +2.7 percent) and miscellaneous goods & services (+2.5 percent from +2.6 percent). Price rose at a faster pace for: alcoholic beverages & tobacco (+22.1 percent from +20.1 percent) and education (+2.2 percent from +2.1 percent). In contrast, cost declined for clothing & footwear (-0.9 percent from -0.7 percent), transport (-5.6 percent from -5.5 percent) and communication (-2.2 percent from -2.1 percent).
CalendarGMTReferenceActualPreviousConsensusForecast
2016-04-204:00 AMMar2.60%4.20%3.60%3.70%
2016-05-204:00 AMApr2.10%2.60%2.20%2.20%
2016-06-154:00 AMMay2.00%2.10%2%2.20%
2016-07-204:00 AMJun
2%
2.30%
2016-08-244:00 AMJul


2.60%
2016-09-214:00 AMAug


2.40%

Among food & non-alcoholic beverages, customers had to pay more for: food (+4.2 percent in May from +4.4 percent in April); food at home (+4.6 percent from +4.6 percent); rice, bread & other cereals (+0.9 percent from +0.9 percent); meat (+0.3 percent from +0.5 percent); fish & seafood (+6.6 percent from +8.4 percent); milk & eggs (+1.1 percent from +0.1 percent), oils & fats (+0.4 percent from +0.4 percent), fruits (+6.1 percent from +7.3 percent); vegetables (+15.3 percent from +12.5 percent); sugar, jam, honey, chocolate & confectionary (+1.8 percent from +2.1 percent); food products (+5.3 percent from +4.9 percent) and food away from home (+3.6 percent from +3.9 percent) and coffee, tea, cocoa & non-alcoholic beverages (+0.6 percent from +1.0 percent). 


ForecastActualQ2/16Q3/16Q4/16Q1/172020Unit
Inflation Rate22.33.13.33.43.47percent

Core consumer prices rose by 2.1 percent year-on-year in May, slowing from 2.3 percent in the preceding month.

On a monthly basis, consumer prices rose 0.3 percent, after gaining 0.4 percent in April. Upward prices pressure came from:  food & non-alcoholic beverages (+0.3 percent), alcoholic beverages & tobacco (+0.1 percent), housing, water, electricity, gas & other fuels (+0.5 percent), health (+0.1 percent), recreation services & culture (+0.1 percent), restaurants & hotels (+0.2 percent) and miscellaneous goods & services (+0.2 percent). In contrast, prices declined by 0.1 percent for clothing & footwear. Prices remained unchanged for: furnisshing, household equipment & routine maintenance, transport, communication and education.
Source: http://www.tradingeconomics.com

Tuesday, May 24, 2016

Market forecast for KLCI 25 May

The FBM KLCI closed in the red at the level of 1625, leaving the entire body within the limits of the previous days candle. In-spite of the bearish performance of the index, select counters did perform today giving the traders a chance to go bargain hunting. Upper ceiling for tomorrow would be around1634 and a lower level would be at 1621. We do expect counters that gave breakouts today supported by volume to sustain their up-trend and go higher. Stocks to sell tomorrow
KLCI COUNTER SPECIFIC NEWS :
  • Felda Global Ventures Holdings Bhd slipped into the red in its first quarter ended March 31, 2016 (1QFY16) with a net loss of RM65.54 million, compared with a net profit of RM3.58 million a year ago, primarily on lower crude palm oil (CPO) production in its palm upstream segment.
  • Hong Leong Financial Group Bhd reported a 13% drop in its third quarter net profit from a year earlier as net interest and non-interest income declined.
  • Affin Holdings Bhd net profit in its first quarter of the fiscal year ending Dec 31, 2016 (1QFY16) surged by 284.13% to RM115.57 million, from the previous corresponding quarter’s RM30.09 million, owing mainly to lower allowance from loan impairment and higher loan recoveries.
  • Hong Leong Financial's 3Q net profit down 13% on year at RM315m.
  • Felda Global's 1Q net loss at RM66m vs RM4m net profit a year earlier.
  • Dayang Enterprise Holdings Bhd, which is keen to maintain the listing status of its subsidiary, Perdana Petroleum Bhd, will divest at least 25% of the group's total stake.
  • KUB Malaysia Bhd business realignment strategy to further enhance its operations has already yielded positive results over its past full financial year.
GLOBAL FACTORS AND WORLD INDICES:
  • Asian stock markets fell in thin trading today, as oil prices deflated energy shares, while Singapore said it was kicking out a Swiss bank linked to Malaysia's 1MDB.
  • Hong Kong shares finished up today despite a fall in mainland indexes.The Hang Seng index rose 0.1 per cent, to 19,830.43, while the China Enterprises Index was flat at 8,306.56 points.
  • China stocks closed lower today as resources firms were hit by slumping commodity prices amid worries over China's economic health.
  • European shares slipped lower today, as the prospect of a possible US interest rate increase in coming weeks knocked back global stock markets.The pan-European FTSEurofirst 300 and STOXX 600 indexes both fell 0.5 per cent in early session trading.
  • Tokyo shares slipped for a second straight session today as lower oil prices hurt sentiment, with investors now eyeing a G7 leaders' summit in Japan this week.
  • Australian shares were down for a second day in subdued trade today, as falling oil prices pressured energy firms although miners proved resilient to more weakness in iron ore.
  • Gold held a four-day decline as more Federal Reserve officials weighed in with comments that supported the case for higher borrowing costs, strengthening the outlook for the dollar and denting the metal's allure.
  • Oil prices fell in thin trade today as the US dollar strengthened, but losses were curbed by a likely draw down in U.S. crude and gasoline stockpiles.

 
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