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R e t a i l M a r k e t M o n i t o r Tuesday, 27 September 2016 · 2016/9/29 · R e t a i l M a...
Transcript of R e t a i l M a r k e t M o n i t o r Tuesday, 27 September 2016 · 2016/9/29 · R e t a i l M a...
R e t a i l M a r k e t M o n i t o r Tu esday , 27 Sep te mbe r 20 1 6
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M A L A Y S I A
MARKET NEWS
The FBMKLCI slid 1.49pt to close at 1,669.50 yesterday. Meanwhile, Asian stocks fell the
most in two weeks as Chinese shares slumped before a week-long holiday and amid
uncertainty over whether OPEC will be able to curb output that has pushed down oil
prices. The MSCI Asia Pacific Index dropped 0.9% to 140.68. The FBMKLCI’s top gainers
were Hong Leong Bank (+2.2%), CIMB Group Holdings (+1.9%) and Public Bank (+1.2%)
while the top losers were Genting Malaysia (-2.6%), Axiata Group (-2.5%) and
SapuraKencana Petroleum (-1.9%). In the broader market, losers outpaced gainers 484
to 324 with 372 counters unchanged. Turnover was at 1.64b with shares valued at
RM1.57b.
From the technical perspective, the FBMKLCI remained steady within the prior expected
range of 1,660-1,674. As both the DMI and MACD are still on the bearish crossover, we
believe the consolidation is not yet over as selling pressure is still visible. As such, further
consolidation can be expected while violation above the 1,674 level could kick-start an
upward climb in the foreseeable future. Support and resistance levels are still maintained
as follows:
Support: 1,648, 1,640
Resistance: 1,692, 1,700
On Monday, US stocks closed lower as worries about Germany’s Deutsche Bank weighed
on the financial sector while the upcoming US presidential debate also contributed to
jittery sentiment. The DJIA fell 166.62pt, or 0.91%, to settle at 18,094.83 while the
S&P500 edged lower by 18.59pt, or 0.86% to 2,146.10. US-produced crude rose nearly
3% to US$45.67, as traders look ahead to a key meeting in Algiers where OPEC
members are again discussing whether to cap production in some fashion. Meanwhile,
US government bonds finished higher, with the yield on the 10-year Treasury dipping to
1.586%. Falling stocks outnumbered advancing ones on the NYSE by 2,244 to 919, and
84 ended unchanged.
WHAT’S IN THE PACK
2017 Budget Preview: Still
Inspired by Infra Spending We expect a market-neutral and flattish
‘election’ Budget 2017 to be tabled on 21
Oct 16. The budget’s continuing focus on
infrastructure spending benefits the
construction and building material
companies.
Scientex (SCI MK/BUY/RM6.30/Target: RM7.40)
4QFY16: Results in line with
expectations; excluding one-off items,
manufacturing and property core EBIT
rise 6.5% yoy and 18.7% yoy
respectively.
Emico Holdings (EMI MK) Technical BUY on breakout with +27.5%
potential return
BUY on breakout with a target price of
RM0.325 and stop-loss at RM0.215. Based
on the daily chart, EMI is making a pullback
from the recent high and has established
support at RM0.22.
Fibon (FIBON MK) Technical BUY on breakout with +30.7%
potential return
BUY on breakout with a target price of
RM0.83 and stop-loss at RM0.555. Based
on the daily chart, FIBON tried to penetrate
the breakout level of RM0.635 and
managed to close above BBI line on
yesterday’s movement.
Suria Capital Holdings (SURIA
MK) Technical BUY with +15.1% potential return
BUY with a target price of RM2.39 and
stop-loss at RM1.89. Yesterday’s gain can
be considered a significant breakthrough
as the breakout has placed the share price
in new territory.
FBMKLC I CHART
Source: Bursa Station
KEY IND ICES
Prev Close Chg (%)
YTD (%)
DJIA 18,094.83 (0.91) 3.84 S&P 500 2,146.10 (0.86) 5.00 FTSE 100 6,818.04 (1.32) 9.22 CSI 300 3,220.28 (1.69) (13.69) FSSTI 2,849.94 (0.25) (1.14) HSCEI 9,629.35 (1.70) (0.33) HSI 23,317.92 (1.56) 6.40 JCI 5,352.14 (0.68) 16.53 KLCI 1,669.50 (0.09) (1.36) KOSPI 2,047.11 (0.34) 4.37 Nikkei 225 16,544.56 (1.25) (13.08) SET 1,490.14 (0.18) 15.69 TWSE 9,194.52 (0.97) 10.27 BDI 934.00 (0.74) 95.40 CPO (RM/mt) 2,715.00 1.46 9.26 Nymex Crude (US$/bbl) 45.69 (0.52) 5.42
TOP VOLUME
Stock Price (RM)
Chg (%)
Vol (‘000)
Hiap Teck Venture Bhd
0.34 11.67 63,609
Perisai Petroleum Teknologi Bh
0.15 30.43 41,590
Vivocom International Holdings
0.21 5.00 34,822 Kinsteel Bhd 0.07 27.27 34,615
Malaysia Steel Works Kl Bhd
1.00 11.73 31,929
TOP GA INERS
Stock Price (RM)
Chg (%)
Vol (‘000)
Sino Hua-An International Bhd
0.04 40.00
14,618
Hb Global Ltd 0.06 37.50
37 Perisai Petroleum Teknologi Bh
0.15 30.43
41,590
Kinsteel Bhd 0.07 27.27
34,615 Fcw Holdings Bhd 1.25 26.2
6 169
TOP LOSERS
Stock Price (RM)
Chg (%)
Vol (‘000)
Mnc Wireless Bhd 0.15 (14.29) 15,352.2 Sc Estate Builder Bhd 0.04 (11.11) 5,524.1
Dbe Gurney Resources Bhd
0.04 (11.11) 926.0 Kuantan Flour Mills Bhd
0.05 (9.09) 21.1
Luster Industries Bhd 0.06 (7.69) 54.0 Source: Bloomberg
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M A L A Y S I A
TRADERS’ CORNER
Emico Holdings (EMI MK) Technical BUY on breakout with +27.5%
potential return
Last price: RM0.235
Target price : RM0.295, RM0.325
Support : RM0.22
Stop-loss : RM0.215
BUY on breakout with a target price of
RM0.325 and stop-loss at RM0.215. Based
on the daily chart, EMI is making a pullback
from the recent high and has established
support at RM0.22. We expect the share
price to continue the upwards movement
once it manages to break the breakout
level of RM0.255. This is supported by an
uptick in the RSI and a bullish crossover in
the MACD. We peg our targets at RM0.295
and RM0.325 in the near term.
Expected time frame: 2 weeks to 2
months.
Fibon (FIBON MK) Technical BUY on breakout with +30.7%
potential return
Last price : RM0.62
Target price : RM0.775, RM0.83
Support : RM0.56
Stop-loss : RM0.555
BUY on breakout with a target price of
RM0.83 and stop-loss at RM0.555. Based
on the daily chart, FIBON tried to penetrate
the breakout level of RM0.635 and
managed to close above BBI line on
yesterday’s movement. Growing
momentum as shown by an uptick in RSI
should lift the share price higher. Moreover,
positive readings from DMI indicators,
which are used to gauge trend strength,
have given an indication of a stronger
upward move from here onwards. As such,
we expect FIBON will continue the upwards
movement to the previous high of RM0.835
if it manages to penetrate the breakout
level of RM0.635.
Expected time frame: 2 weeks to 2
months.
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M A L A Y S I A
TRADERS’ CORNER
Suria Capital Holdings
(SURIA MK) Technical BUY with +15.1% potential return
Last price : RM2.05
Target price : RM2.27, RM2.36
Support : RM1.91
Stop-loss : RM1.89
BUY with a target price of RM2.36 and
stop-loss at RM1.89. Yesterday’s gain can
be considered a significant breakthrough as
the breakout has placed the share price in
new territory. Backed by a surging trading
volume and positive momentum, there
should be an upward follow-through from
here onwards. Furthermore, an uptick in
RSI and bullish crossover in DMI and
MACD imply a stronger upward move
ahead. We peg our targets at RM2.27 and
RM2.36 in the near term.
Expected time frame: 2 weeks to 2
months.
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M A L A Y S I A
CORPORATE NEWS
Bina Puri Holdings: Secures RM18m contract. Bina Puri
Holdings Bhd has secured a contract worth RM18m from Punj Lloyd Sdn Bhd for the
execution of package- building plant and non-plant (Part-A) for Package 22 at the Refinery
and Petrochemical Integrated Development (RAPID) Project. In a statement, Bina Puri said
its wholly owned subsidiary, Bina Puri Sdn Bhd had accepted another Letter of Award from
Punj Lloyd. It said the work shall be completed within 11 months with the scope of work
includes of civil, structural and architectural works for buildings (i.e. sub-station, field
auxiliary room and operator shelter building), pump stations and foundation of vessel and
packages. To date, the total project secured for year 2016 is worth RM841m. (Source: The
Star)
CLIQ Energy: Best Oracle makes last-ditch effort to stop
CLIQ’s liquidation. CLIQ Energy Bhd’s biggest shareholder Best Oracle Sdn Bhd
applied on Monday to hold an EGM to stop CLIQ from being liquidated, the same day that
the High Court ruled in favour of winding up the special purpose acquisition company. In a
filing with Bursa Malaysia, CLIQ said its board of directors (represented by independent
directors) received on Monday morning a requisition letter from Best Oracle, Kandiah
Subramaniam and Mohd Adam Mohd Said calling for a general meeting to consider these
resolutions: * CLIQ directors be directed to use all endeavour to seek an extension of time
from the Securities Commission to complete a qualifying acquisition (QA), and * As a result
of the above, CLIQ not be dissolved and/or wound up and/or liquidated pending the
completion of the QA. (Source: The Star)
Damansara Realty: Partners with Johor catering firm to
undertake RM124m Rapid job. Damansara Realty Bhd said yesterday that
it has formed a joint venture with a Johor catering company to undertake the RM124m
facilities management and catering services job it secured from Petronas Refinery and
Petrochemical Corp Sdn Bhd last month. In a bourse filing yesterday, Damansara Realty
said its wholly-owned subsidiary TMR Urusharta (M) Sdn Bhd has formed a joint venture
company (JVCo) with LC Catering Sdn Bhd to undertake the job at Petroliam Nasional
Bhd's (Petronas) RM60b Refinery and Petrochemical Integrated Development (Rapid) in
Pengerang, Johor. The JVCo — TMR LC Services Sdn Bhd — is 70% owned by TMR
Urusharta and 30% by LC Catering, said Damansara Realty. It will operate and maintain
the temporary executive village and management office at Rapid, which is slated to be the
largest integrated refinery and petrochemical hub in the region. It will provide general
cleaning, pest control, landscaping and other services to Petronas' temporary executive
village and management office from 1 Nov 16. The contract, to be completed over some 38
months, is expected to positively impact Damansara Realty's revenue from its financial
year ending 31 Dec 16 (FY16) till FY19. (Source: The Edge)
DRB-Hicom: DRB-Hicom says The Verge’s current buyer
will assume outstanding loan. DRB-Hicom Bhd has denied it is selling its
Singapore property, The Verge, to Columba Holdings Pte Ltd at 40% below the price of an
earlier aborted deal, saying that the indicative price of the cancelled transaction had not
been adjusted to factor in an outstanding loan facility. In a statement on Monday, the
conglomerate said the indicative price of S$317m (RM961.7m) under the aborted sale to
Evolutyon Real Estate Investment Holding Pte Ltd was prior to the “agreed adjustments”
which substantially comprised the redemption of Corwin Holding Pte Ltd’s outstanding loan
facility totalling S$85.52m (RM259.5m). However, under the current transaction announced
on 22 Sept, the said loan facility would remain in Corwin, which is the owner of the 6-storey
shopping mall with an adjacent 8-storey commercial building collectivel known as The
Verge. “In this regard, the appropriate comparison should be drawn from net sale proceeds
(which appear in Section 8: utilisation of proceeds from proposed disposal in our respective
Bursa announcements dated 21 Dec 15 and 22 Sept 16), which is S$210.08m
(RM637.3m) against S$189.75m (RM575.3m), a lower difference of 9.67%,” said DRB-
Hicom group managing director Datuk Seri Syed Faisal Albar. (Source: The Star)
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M A L A Y S I A
KNM Group: Issue RM330m Thai bonds. KNM Group Bhd has
proposed to issue bonds in Thailand to raise up to US$80m (RM330.2m) equivalent in baht
to finance its bio-ethanol business in that country. In its filing with Bursa Malaysia, the
process equipment manufacturer and energy group said the proposed Thai bonds had
been assigned a credit rating of AAA/Stable by TRIS Rating Co Ltd by virtue of the debt
papers being guaranteed by Asian Development Bank’s trust fund Credit Guarantee and
Investment Facility. “Proceeds from the proposed Thai bonds will be utilised by KNM to
provide a foreign currency lending to IEL (Impress Ethanol Co Ltd), which will in turn use
the proposed Thai bond proceeds for the purposes of financing future expansion and
working capital expenses for its bio-ethanol plants,” the group said. KNM has an indirect
stake of 72% in IEL, which is currently constructing its phase one bio-ethanol plant, with a
daily production capacity of 200,000 litres of ethanol. Construction of Phase 2 of the bio-
ethanol plant for an additional 200,000 litres of ethanol per day is expected to begin by the
first half of 2017. According to KNM, the proposed Thai bonds are expected to be fully
issued by Dec 2016, with the estimated total costs at RM1.1m to be realised in 4Q16.
(Source: The Star)
Pestech International: Pestech-Fuji JV bags RM89.5m
contract from Sarawak Energy. Pestech International Bhd and Fuji
Electric Asia Pacific Pte Ltd have jointly clinched an RM89.53m contract from Sarawak
Energy Bhd (SEB) to supply and install a 275kV substation. In a filing with Bursa Malaysia,
the integrated electric power technology firm said Pestech-Fuji JV, a non-incorporated
consortium formed by its unit Pestech Sdn Bhd and Fuji Electric Asia Pacific, accepted the
letter of award in relation to SEB’s New Bintulu B substation project on Friday last week.
The project, to begin on 4 Oct, is expected to be completed within 21 months. Pestech did
not say what stakes it and Fuji Electric would hold in the joint venture. “The project will
have no material effect on the revenue and earnings of Pestech for the financial year
ending 30 June 17 but is expected to contribute positively to the future earnings and net
asset per share of the company,” Pestech said. The company said it did not foresee any
exceptional risk other than the normal operational risk associated with the project such as
availability and changes in the price of raw materials. (Source: The Star)
SMRT Holdings: Syed Mohd Muzakir quits as SMRT CEO. SMRT Holdings Bhd's CEO Syed Mohd Muzakir Syed Hussin has quit from his position
with the company after just seven months on the job to pursue a new opportunity. His
resignation took effect from 23 Sept, the company said in a bourse filing yesterday. He was
appointed to the post on 2 Feb, when he took over from SMRT founder Datuk Dr R Palan,
who was redesignated to the role of executive chairman at the time. Muzakir, 42, joined
SMRT on 3 Mar 14, as the CEO of its corporate office. Prior to that, he was attached with
UMW Corporation Sdn Bhd and UEM Group Bhd. He began his career at RHB Bank Bhd,
before pursuing his further education. Upon returning, he joined Uni Asia Insurance Bhd
and later joined Bank Pembangunan Malaysia Bhd until the merger of the bank in 2006,
whereby he was transferred to SME Bank Bhd. According to the group's filing, Muzakir has
more than 15 years of senior management experience in corporate strategies, financial,
business development and managing people. (Source: The Edge)
Sunway Construction Group: Nets three contracts worth
RM209m. Sunway Construction Group Bhd (SunCon) has clinched three contracts
worth RM209.02m from MMC Gamuda KVMRT (PDP SSP) Sdn Bhd and sister company
Sunway Iskandar Sdn Bhd. In a filing with Bursa Malaysia, the company said MMC
Gamuda, the project delivery partner for MRT Sungai Buloh-Serdang-Putrajaya (SSP) line,
gave it a RM52.52m contract for advance works construction of the viaduct guideway
between Kampung Muhibbah and Serdang Raya. These works would be completed by
September next year, SunCon said. The in-house projects from Sunway Iskandar, which is
also owned by SunCon’s parent company Sunway Bhd, are for building a commercial
development in Medini Iskandar Malaysia, Johor (contract value: RM100m) and for building
88 office shop lots, a management office block and other facilities in Medini Zon F24
(contract value: RM56.5mil). (Source: The Star)
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M A L A Y S I A
UEM Edgenta: UEM Edgenta to buy top healthcare
facilities manager for RM565m. UEM Edgenta Bhd is set to become the
country’s biggest facilities management provider servicing the private healthcare and
hospital segments through its proposed acquisition of Asia Integrated Facility Solutions Pte
Ltd for S$185.9m (RM565.2m) in cash. In a filing with Bursa Malaysia, the asset solutions
firm said Asia Integrated Facility Solutions owned indirectly UEMS Pte Ltd, the number one
facilities management firm catering to those segments in the country. Its clients in Malaysia
include Prince Court Medical Centre, Pantai Hospital Kuala Lumpur, Gleneagles Penang
and Assunta Hospital. UEM Edgenta, a core division of UEM Group Bhd (its 69.14%
shareholder), said UEMS was also the leader in the hospital facilities management
segment for public and private hospitals in Taiwan, servicing among others Saint Paul’s
Hospital, National Taiwan University Hospital, Pingtung Christian Hospital and Yuan’s
General Hospital. It holds the number two position for the same segment in Singapore for
the provision of housekeeping and patient management services. Their clients in the
republic include Changi General Hospital, St Luke’s Hospital, Tan Tock Seng Hospital as
well as Sengkang Health @ Alexandra Hospital. (Source: The Star)
Voir Holdings: Voir's unit gets RM24.6m subcontract deal
for PPR project. Voir Holdings Bhd's wholly-owned subsidiary Million Twilight Sdn
Bhd has accepted a subcontract offer to complete 1,000 units of apartments in Kota Bharu
for RM24.62m. The project is under the Programme Perumahan Rakyat and the contract is
slated to start from 1 Oct and be completed by 30 Sept next year. The offer was from Wira
Syukur (M) Sdn Bhd, said Voir in its bourse filing yesterday. It said the job is expected to
contribute positively towards its earnings and net tangible assets during the subcontract's
period. Fashion retailer Voir had, in March, received an unconditional takeover offer from
Vista Lestari Development Sdn Bhd, a company controlled by Datuk Zarul Ahmad Mohd
Zulkifli that is involved in construction and property development. Zarul now controls some
50.71% of Voir via his interest in Vista Lestari. Voir shares were not traded yesterday. It
last settled at 66 sen on 21 Sept, valuing it at RM87.12m. (Source: The Edge)
SECTOR
Banking: BNM governor: Take long-term view on
adjustment of ringgit. Bank Negara Malaysia (BNM) governor Datuk
Muhammad Ibrahim has asserted that the adjustment of the local currency should be
viewed from a long-term perspective and not short-term. He said in the short term, the
exchange rate movement could be a reaction to news headlines and market sentiments,
instead of reflecting the underlying strength of the economy. “What is important, therefore,
is to ensure the availability of ample reserves, maintaining strong economic fundamentals
and managing our exposure to external debt,” he said at the Malaysian Institute of
Economic Research’s 30th anniversary dinner on Monday. Muhammad said global
concerns over monetary policy normalisation by the Federal Reserve continued to impact
the ringgit. He said the ringgit’s volatility since Sep 2014 had exceeded levels in previous
episodes of sharp adjustment such as the European Sovereign Debt Crisis and Taper
Tantrum. “The weak ringgit was further amplified by the misperception about Malaysia’s
reliance on commodities and our position as a net oil exporter,” he said. Meanwhile,
Muhammad said Malaysia needed to reawaken growth, reignite productivity and restore
inclusiveness to secure continued and sustainable progress, as well as navigate current
global landscape. (Source: The Star)
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M A L A Y S I A
ECONOMICS
Budget: Khazanah MD: Budget 2017 to continue pro-
growth, pro-society focus. Khazanah Nasional Bhd sees a continuation of a
pro-growth and pro-society focus in the upcoming Budget 2017. Managing Director Tan
Sri Azman Mokhtar said the budget would also like to be fiscally responsible on the back of
a challenging global economic environment. He added that the country needs to keep the
growth engine going to support its development. “The global conditions are quite
challenging, but I think Malaysia has much strength, with geography being one. “I think we
can build on that and we look forward to playing our part,” he told reporters on the sidelines
of the first day of the Khazanah Megatrends Forum 2016 here
yesterday. Meanwhile, CIMB Group Holdings chairman Datuk Seri Nazir Razak said the
government must show fiscal prudence in the upcoming budget announcement to show
that despite the difficult external conditions, it can achieve a lower fiscal deficit. The
government targets to reduce the fiscal deficit to 3.1% in 2016 and further improve it next
year. (Source: The Star)
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M A L A Y S I A
FROM THE REGIONAL MORNING NOTES...
2017 Budget Preview: Still Inspired by Infra Spending We expect a market-neutral and flattish ‘election’ Budget 2017 to be tabled on 21 Oct 16,
placing emphasis on: high infrastructure spending, selective relaxation for property
purchases, promoting growth areas (eg value-added exports, transportation and logistics),
and relief for the middle income (tax relief) and low income (higher BR1M handouts)
earners. Meanwhile, the FMBKLCI may be swayed by macro events (eg US rate hike);
hence, we maintain our view for a firmer YE.
Scientex: 4QFY16: Looking Forward To The Next Record Year (SCI MK/BUY/RM6.30/Target: RM7.40) Scientex’s 4QFY16 results were within expectations. Excluding one-off items (notably
RM8m start-up costs for new plants), its manufacturing and property segments’ core EBIT
rose 6.5% yoy and 18.7% yoy respectively. Core net profit rose by a bigger 41.8% yoy due
to a lower effective tax rate of 22% (4QFY15: 35%). The new BOPP plant is undergoing
trial production and will take one to two years to fill up the capacity. Maintain BUY and
target price of RM7.40, implying 10.4x 2017F PE.
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M A L A Y S I A
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M A L A Y S I A
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