Mid-day Market Update on Budget Day 2018

Share prices on Bursa Malaysia staged a rally today in anticipation of positive perks to be announced by Prime Minister Datuk Seri Najib Tun Razak when he tables the Budget 2018 later today. 

Dealers said market sentiment picked up today. However, they said it remained to be seen if the gains can be sustained following the Budget 2018 announcement. Historically, the FBM KLCI tends to climb ahead of budget announcements. 

At midday, FBM KLCI closed 10.47 points, or 0.6% higher at 1,747.27 points. The index opened  4.54 points better at 1,741.34. 

In the broader market, there were 420 stocks advancing against 290 stocks declining while 400 counters unchanged. About 1.58 billion shares, valued at RM1.12bil, changed hands.

Hong Leong Investment Bank Research said investors were still adopting a wait-and-see mode ahead of Budget 2018. 

“In the US, the focus would now shift to corporate tax reform details that may be unveiling soon as this should enhance the earnings in the future. Nevertheless, we think the Dow may experience a short term pullback amid overbought signals and the upside is likely to be capped around 23,500.

“Still, for the local bourse, stocks are likely to stay cautious ahead of Budget 2018. However, should there be any positive announcements in Budget 2018, we may expect short term recovery of key index towards 1,740-1,750. Also, oil and gas stocks could stay focus amid stronger Brent prices above US$59,” it said. 

The top three index movers were Tenaga Nasional Bhd (TNB), Sime Darby Bhd and Axiata Group Bhd. 

Heavyweight TNB, with a 7.68% weighting in the KLCI, was up 4.74%, or 68 sen, to RM15.02. The counter hit an all-time high earlier after climbing 94 sen jumped 94 sen, or 6.69% to RM15.30 as investors focused on a record dividend of RM3.5bil and ignored a marginally lower earnings in its latest quarterly report. 

Among the gainers were Nestle, which rose 30 sen to RM86.90, Mercury gained 26 sen to RM2.15 and Poly Glass climbed 20.5 sen to 59 sen. 

The top loser on Bursa Malaysia included British American Tobacco that fell 22 sen to RM40.56. Tasek lost 10 sen to RM12.60 while Genting Bhd fell nine sen to RM9.24.

Meanwhile, ringgit depreciated 0.19% to 4.2425 against the US dollar.

Overnight, most US stocks climbed amid a raft of robust earnings reports, speculation about the Federal Reserve’s next leader and congressional action on taxes. The Dow Jones Industrial Average rose 71.61 points, or 0.31 percent, to 23,401.07.

Regional stocks finished largely higher at midday, tracking gains on Wall Street.  Japan’s Nikkei rose 0.9% to 21,937.82 points by midmorning, after hitting as high as 21,968.75, its strongest level since mid-1996. South Korea’s Kospi rose 0.6% at 2,495.41 points while the S&P/ASX 200 index rose 5.4 points, or 0.1% to 5,921.7.

Hong Kong’s Hang Seng Index gained 0.84% to 28,438.43 points while Shanghai Composite index rose 0.28% to 3,417.12 points.

Source: http://www.thestar.com.my/business/business-news/2017/10/27/blue-chips-spur-market-rally

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Bursa Malaysia Market Updates

Bursa Malaysia followed the key Asian markets higher early Friday, rising on the wave of optimism on Wall Street.
At 9.45am, the FBM KLCI was up 2.53 points or 0.14% to 1,761.62. Turnover was 558 million shares valued at RM227.08mil. There were 266 gainers, 170 losers and 313 counters unchanged.

Asian stocks rose after optimism over US tax reform plans lifted Wall Street shares to new highs, while the dollar hovered near a seven-week peak following additional indications of solid economic growth, Reuters reported.

MSCI's broadest index of Asia-Pacific shares outside Japan edged up 0.1%, poised for a 1.4% gain on the week. Japan's Nikkei climbed 0.3%, Australian stocks rose 0.7% and South Korea's KOSPI advanced 0.9%.At Bursa, BAT was up 48 sen to RM43.18, Sunway-WB 30 sen to 30.5 sen, Aeon Credit 20 sen to RM13 and Petron 12 sen to RM11.30.

KL Kepong rose 20 sen to RM24.98, Petronas Dagangan 14 sen to RM24.40 and Genting Plantations 12 sen to RM10.56 with just 100 shares done for each counter.

MRCB ordinary rights shares advanced 0.5 sen to 10 sen with 47.92 million units done. It was listed at 11 sen each.

Kossan fell 12 sen to RM6.80 while Hartalega lost four sen to RM6.84.
UEM Edgenta and Ajinomoto were down six sen to RM2.63 and RM19.96 while Tenaga fell four sen to RM14.20.

Renewed buying interest has emerged in E.A. Technique (M) Bhd, according to AllianceDBS Research.

EA Technique, which owns and operates marine vessels in Malaysia, saw its shares gained one sen, or 2.02% to 50.5 with more than 1.48 million shares traded.

AllianceDBS said EA Technique had on crossed over the 50 sen hurdle to reach an intraday high of 50.5 sen before settling at 49.5 sen on Thursday.

It added that a crossover of the 50 sen hurdle again would likely see Eatech trading upward with the next upside target pegged between 56 sen and 60 sen.

The research house said risk taking traders could establish a buying position at 48 sen on a small pullback.

“Once a buying position is established, a stop loss at 47 sen level must be placed for risk capital protection, and this 47 sen is to be followed by a trailing stop loss strategy.

“If you are prepared to take a trading loss risk of RM10 (excluding brokerage) for RM80 – RM120 potential profit, you may acquire 1,000 shares with a capital amount of RM480 assuming buying order is filled at 48 sen,” AllianceDBS said.

Shares in Sunway Construction Group Bhd (SunCon) were boosted in early trading on Friday after securing a RM2.18bil contract for LRT 3 project.

The counter gained five sen, or 2.17 to RM2.35 with more than 1.4 million shares unchanged hands. Its shares have risen more than 38% year-to-date.

SunCon has secured a contract worth RM2.18bil in connection with the LRT 3 project (Bandar Utama, Petaling Jaya  to Johan Setia, Klang) from Prasarana Malaysia Bhd.

The latest contract has boosted SunCon's year-to-date job wins to RM3.75bil and outstanding construction order book to RM6.5bil.

With the award, SunCon has now exceeded its target orderbook replenishment of RM2bil, the company said.

AmInvestment Bank Research has raised its FY17-19F forecasts on SunCon by 0.4%, 2% and 3% respectively.

It has also increased its fair value to RM2.65 from RM2.60 and maintain its “buy” call.

“Our fair value is based on 15x revised FY18F EPS, in line with our benchmark forward PE of 14-16x for large-cap listed construction companies,” the research house said.

“We continue to like SunCon for its good earnings visibility underpinned by a sizeable outstanding order book which will keep it busy for the next 2-3 years, its strong prospects for new job wins underpinned by various mega infrastructure projects, particularly the rail-related ones, in the market and its proven track record with various blue-chip clients in the market,” AmInvestment said.

Kenanga Investment Bank Research is retaining its outperform call for steel products manufacturer United U-Li Corporation but with a lower target price of RM4.95 from RM5.60 previously.
It said on Friday while its earnings assumptions remain unchanged (FY19E EPS of 35.2 sen), it believes the shift in market preference to upstream steel counters could dampen trading sentiments for the stock. 

“This is further seen in the lower trailing forward price earnings ratio (PER) during the year which lingered at its average rate. Hence, we tone down our valuation assumptions from 16.0 times PER (+ one standard deviation over the five-year mean) to 14.0 times (+0.5 standard deviation over the five-year mean). 

“Nonetheless, we still like the stock and view its valuation as undemanding given its: (i) leading market position, (ii) strong expected growth prospect (two-year forward compounded annual growth rate (CAGR) of 28%), (iii) expanding margins, and (iv) net cash position,” it said.

Source: http://www.thestar.com.my

Bursa Malaysia: KLSE Market Updates

After snapping 10 straight days of losses on Tuesday, Bursa Malaysia seemed unsettled early Wednesday as investors awaited fresh positive catalysts to spur more buying interest.

At 9.41am, the FBM KLCI was down 0.4 of a point to 1,759.278. Turnover was 342.80 million shares valued at RM152.76mil. There were 207 gainers, 172 losers and 263 counters unchanged.
The ringgit rose 0.27% to 4.226 from the previous close of 4.2375 as he US dollar stepped back from a 1 1/2-month high against a basket of currencies on Wednesday.
Malaysia, and to a lesser degree Indonesia, Thailand and the Philippines, remain more exposed to exchange rate risk than other developing economies in East Asia and the Pacific as global financial conditions tighten, the World Bank said.
Companies and banks in these countries have sizable external debt, although foreign exchange reserves currently appear adequate, the Washington-based multilateral lender said in a report on Wednesday.

Here are other key details of the report:

• Monetary authorities need to be prepared to tighten their policy stance if capital outflows prompt currency weakness
• In the case of depreciation pressures in China, authorities should allow greater adjustment through relative prices and closely monitor financial sector vulnerabilities as monetary policy further tightens

Pre-election budget almost a certainty for Malaysia

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