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

w w w . u t r a d e . c o m . m y 1

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



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



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



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


Support : RM0.56

Stop-loss : RM0.555



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.


months.



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


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.


months.



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)



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)



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)



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)



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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United States of America (“U.S.”)

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