FBMKLCI
1707.11pts +2.08pts
(+0.12%) Volume 2.386b Value RM 2.191b
1) The KLCI clawed
back early losses (-10pts low) to close 2pts above overnight ahead of the
widely anticipated national budget 2016 on Friday. Regional bourses were mostly
mixed, as the NIKKEI +1.91% outperformed the rest while the SHCOMP -3.06% led
in losses. Others were mostly flat, HSCEI -0.37%, ASX +0.24%, STI +0.22%. TECH
sector +2.65% outperformed, as INARI +5.7%, UNISEM +4.60%, KESM +16.43%,
GTRONIC +1.29% gained for a 2nd day as the Ringgit (RM4.28) continue to weaken
against the greenback. Market breadth was positive as gainers led losers by 537
: 310. Futures closed at 1708pts (1pt discount).
2) Heavyweights : CIMB +1.36% RM4.97, GENTING +1.95%
RM7.32, IHH +1.71% RM6.52, GENM +1.63% RM4.35, KLK +1.23% RM22.88, TENAGA
-0.62% RM12.74, SIME- 0.92% RM8.58, AXIATA -0.47% RM6.35.
3) DBT : KNM 64.245mil @ RM0.554 (3.27% PUC), ECOWLD
47.68mil @ RM1.35 (2.01% PUC @ 5.6% PUC), BIOHLDG 9mil @ RM0.29 (1.94% PUC).
4) Situational:-
ZELAN 7.54%
RM0.285 - Zelan said its wholly-owned subsidiary, Zelan Construction Sdn Bhd
will undertake the sub-contract works with Icop Construction (M) Sdn Bhd on a
joint venture basis through an entity to be incorporated. Both companies
yesterday accepted the LOA for the sub-contract works from MMC-Sumitomo
Consortium. The sub-contract works involve the construction and completion of
16.6km of pipe jacking in various sizes and 164 shafts for jacking and
receiving pit in various sizes and depths for the sewerage conveyance system
for Zone 7A and 7B of the Langat project. The date for completion for the whole
of the sub-contract works is 26 months from the date for possession of the site
to be notified by the contractor. Zelan is a 39.25%-owned unit of MMC Corp Bhd
and therefore, the sub-contract is considered a related party transaction.
5) ALAM : announced that its wholly-owned subsidiary,
Alam Maritim (M) Sdn Bhd, had recently received a Letter of Award from Petronas
Floating LNG 1 (L) Ltd ("PFLL"), a wholly-owned subsidiary of
Petroliam Nasional Berhad for a Subcontract work of PFLL Subcontract No.
4120000023. The work is for the floating liquefied natural gas (FLNG) offshore
works of final positioning and mooring system hook-up including flexible riser
installation, pre-commissioning and commissioning of pipeline, pipe-line ends
terminal and riser from KAKG to FLNG (Package No. 2) for PETRONAS Floating
LNG-1 Project with the award value of RM53.5m. The duration for the Subcontract
works is effectively from 15 June 2015 until 30 April 2016 ; +ve, the
Subcontract is expected to contribute positively to the earnings and net
tangible assets of ALAM for the financial year ending 31 December 2015 and
beyond. The risks associated with the
contracts are mainly operational risks such as accidents and unexpected
breakdown of vessels and delays due to human, mechanical and logistic factors
as well as weather condition. However, management recently guided that the OSV
market remains in a lull, where contract awards have been slow against the
backdrop of a slowdown in upstream activities. Alam is also looking into
participating more in the Middle East market where activity appears to be more
robust. Petronas Carigali has yet to have any call-out for vessels for its umbrella
contract. The contract values on these are not fixed and will depend on the
actual number of days the vessels are on hire, based on a call-out basis.
6) Market : Indicators suggest that the market could see
further retracement in the near term. We view that the local bourse could
experience some nervousness ahead of the Budget announcement. Short term
trading range maintained at 1680-1720 points.